The Lod District Court has halted the efforts of global hotel booking website Booking.com to evade receiving a petition for a class action filed against it in Israel. The petition alleges that Booking.com acted to suppress competition in hotel services in Israel. Judge Hana Kitsis rejected the company's arguments that since it was based in the Netherlands, Israeli claimants could not serve it with the statement of claim through the company's offices in Israel.
The judge ruled, "A connection exists between Booking.com and Booking Israel at a highly intensive level, indicating a real probability that Booking Israel would have notified Booking.com of the filing of a class action and the request for its approval."
The judge added that in contrast to Booking.com's argument, the existence of this intensive connection could not be eliminated through a provision in the terms for using the Booking.com website stating that the support company in Israel does not constitute an address for the delivery of court documents.
Kitsis also stated that a "same business" test led to the conclusion that Booking Israel was authorized to receive lawsuits in the name of international company Booking.com. "The field of business of Booking.com and Booking Israel is the same. Therefore, since it is found that Booking Israel fits the definition of a representative, it can be served with the statement of claim and the request its approval as a class action.," she wrote.
The ruling is the latest in a recent series of rulings in which courts in Israel approved lawsuits in Israel against international companies, including Booking.com. In this case, the class action itself has not yet been approved; a preliminary stage of delivering the statement of claim to the respondent company is involved. The granting of permission to serve the company in Israel, however, paves the way for a hearing in Israel of a petition for approval of a class action against the global company.
A separate company?
Booking.com is a Dutch company that offers options for booking hotels around the world on its website and app. The service is available in a variety of languages, including Hebrew. A petition for a class action against Booking.com, Expedia, and Hotels.com was filed in January 2018. The petition alleged that these companies had made an agreement in restraint of trade in order to prevent competition in the market for ordering hotels services in Israel.
The statement of claim, filed through Adv. Yossy Haezrachy from the Haezrachy law firm and Adv. Shmulik Cassouto from the Cassouto and Co. law firm, alleges that as a condition for distributing and marketing hotels through the Booking.com, Expedia and Hotels.com websites, hotels were required to undertake not to offer their customers a price lower than that offered by the websites. The statement of claim further alleges that following the agreement in restraint of trade by these companies, competition in the market for booking hotels in Israel was affected, and consumers suffered damage amounting to NIS 111-120 million.
As part of the lawsuit, claimant Nir Ben-Zeev filed a petition for recognition of serving of the claim at the offices of Booking Israel as having been served at Booking.com, because Booking Israel was part of Booking.com. Alternatively, the claimant asked that serving of the document be recognized as legally valid because Booking Israel was the representative of Booking.com, due to the intensive connection between the two companies.
Ben-Zeev argued that the offices of Booking Israel were the offices of Booking.com. He cited Booking.com's website, which listed Booking Israel's Tel Aviv office on a "offices around the world" tab. It was also argued that the social networks showed that Booking.com had employees in Tel Aviv. Profiles from the LinkedIn website were attached to the petition as evidence.
Booking.com opposed the petition, arguing that its residence was in Amsterdam, and that Booking Israel was a separate and unrelated company, whose offices were not those of Booking.com. It was also argued that Booking Israel provided only support services to hotels and guesthouses in Israel having agreements with Booking.com, and that the information appearing on the Booking.com website was a referral to the support company.
Booking.com further argued that Booking Israel was not its representative, and that the intensiveness of the connection" test was not fulfilled because 1) Booking Israel's employees were not in daily contact with Booking.com, and did not report the filing of the class against it to Booking.com or send a copy to Booking.com; 2) Booking Israel gave Booking.com's customers limited service, did not serve as Booking.com's arm, and was not authorized to accept lawsuits in Booking.com's name or to serve as an address for serving lawsuits; 3) Booking Israel did not engage in Booking.com's behalf in conducting the same business or the same work, and did not deal with Booking.com's agreements with hosting locations in Israel.
The judge's ruling sounds another clear warning to international tech companies seeking to evade accountability in the Israeli courts.
Published by Globes, Israel business news - en.globes.co.il - on July 25, 2019
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