Austria has launched legislation to outlaw travel websites' practice of preventing hotels from offering rooms at lower prices on their own sites, following similar moves by France and Germany.

So-called parity clauses in contracts between online booking sites and hotels are common in the industry and have led to complaints by rivals and scrutiny by regulators across Europe.

The practice allows online travel agents such as Booking.com, part of US-based Priceline Group, to claim they always offer the cheapest online rates available.

After a weekly cabinet meeting on Tuesday, Vice Chancellor Reinhold Mitterlehner, who is also Austria's economy minister, said the government had submitted to parliament a change in legislation that would ban the practice.

Parliament must now review it after their summer recess.

"At issue is that companies do not have to offer the same price as they currently do on the (online) platform but have the opportunity to make other arrangements," he told a news conference.

Mitterlehner said Austria was following similar moves by France and other countries. Germany's antitrust regulator ordered Booking.com in December to scrap parity clauses.

Booking.com issued a statement on Tuesday defending the practice, saying it increased transparency and comparability, adding that Austria's move threatened those advantages.

"If you want to be sure to get the cheapest hotel price you would be forced to comb through countless home pages to in the end only be able to compare a fraction of the possible offers," Booking.com's managing director for Europe, the Middle East and Africa, Peter Verhoeven, said in the statement.