On Sunday, team boss Toto Wolff claimed Mercedes staff have been "kicked out" of their hotel bookings just days before travelling to the Styrian region.
"Those who work the most and the hardest on the cars will now have to commute 70 kilometres each day," he said.
It turns out that not only does Red Bull own the Austrian GP venue, the energy drink company's mogul Dietrich Mateschitz is also the new owner of the Schloss Gabelhofen, a castle that now operates as a hotel near the Red Bull-Ring.
But Red Bull's F1 director Dr Helmut Marko denies the claim that Red Bull "kicked out" its arch rival Mercedes.
"Mercedes itself made the cancellation," he told APA news agency in Montreal on Sunday.
He is also quoted by the German newspaper Bild: "Mercedes told us suddenly and with no reason. I have the correspondence to prove it.
"We have kicked no one out of our hotel," said Marko.
Marko said the fuss about the hotel story was "unintelligible theatre" on Mercedes' part.
In fact, he said Red Bull has bent over backwards to help Mercedes, after it emerged that Lewis Hamilton's plans to have his motor home in Austria fell through.
"Despite great difficulties, we have given him a room at Steirerschloessl," said Marko, referring to the best hotel near the Red Bull-Ring, "so that he can prepare in the best way possible."
Mercedes team chairman Niki Lauda, however, hit back at Red Bull's account.
"A joke! We have not cancelled our rooms -- why would we do that? Because Mateschitz bought the hotel?
"We would have liked to have stayed there," he insisted.