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Much ado about nothing? Online platform price parity clauses and the EU Booking.com case

Author

Listed:
  • Andrea Mantovani
  • Claudio Piga
  • Carlo Reggiani

Abstract

Online platforms often impose Price Parity Clauses to prevent sellers from charging lower prices on alternative sales channels. We provide quasi-experimental evidence on the full removal of Price Parity Clauses in France in 2015 and in Italy in 2017 for hotels listed on Booking.com. Our analysis reveals a relatively limited effect in the short run followed by a significant reduction in room prices in the medium run. Moreover, we find that hotels affiliated with chains decreased their prices more than independent hotels, both in the short and medium run. Overall, the policy interventions led to substantive savings for consumers.

Suggested Citation

  • Andrea Mantovani & Claudio Piga & Carlo Reggiani, 2019. "Much ado about nothing? Online platform price parity clauses and the EU Booking.com case," Economics Discussion Paper Series 1909, Economics, The University of Manchester.
    • Handle: RePEc:man:sespap:1909
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    File URL: http://hummedia.manchester.ac.uk/schools/soss/economics/discussionpapers/EDP-1909.pdf
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    References listed on IDEAS

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    More about this item

    JEL classification:

    • D40 - Microeconomics - - Market Structure, Pricing, and Design - - - General
    • K21 - Law and Economics - - Regulation and Business Law - - - Antitrust Law
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • L42 - Industrial Organization - - Antitrust Issues and Policies - - - Vertical Restraints; Resale Price Maintenance; Quantity Discounts
    • L81 - Industrial Organization - - Industry Studies: Services - - - Retail and Wholesale Trade; e-Commerce

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