Federal Council of Switzerland proposes ban on all price parity clauses for accommodation

Official communication by the Swiss government available in German, French and Italian. The proposed ban affects both wide and narrow price parity clauses. It must first be adopted by the Swiss Federal Parliament to become law.

A machine-translated English version of the announcement is available here:

On November 17, 2021, the Federal Council decided to introduce a new provision in the federal law against unfair competition (LCD) in order to prohibit clauses limiting the freedom of pricing in contracts concluded between online booking platforms and accommodation establishments. It also took note of the results of the consultation procedure concerning the modification of the LCD and approved the message as well as the bill.

The aim of the new regulations is to ensure that accommodation establishments can freely set their prices. The planned ban allows them to promote direct sales on their own website and thus strengthen their competitiveness. In a next step, the message and the project will be transmitted to Parliament.

The prohibition of clauses limiting freedom of pricing will be included in a new article (art. 8a P-LCD). This new provision is solely a matter of civil law and does not provide for any criminal sanction. Actors with standing, that is to say mainly accommodation establishments, competitors and the professional and economic associations concerned, will be able to exploit the actions provided for by the LCD. Where collective interests are at stake, ie when the economic interests of many people are affected, the Confederation will also be empowered to bring an action.

By means of the planned modification of the LCD, the Federal Council is implementing motion 16.3902 Bischof ("Prohibit leonine contracts from online booking platforms which the hotel industry bears the brunt of"). This motion calls on the Federal Council to ban price parity clauses in contracts between online booking platforms and accommodation establishments.

The report on the results of the consultation will be published on the Federal Law Publication Platform: Consultation Procedures Completed.

Proposal:
Abusive nature of the use of clauses limiting the pricing freedom of accommodation establishments

Anyone who, as the operator of an online booking platform for accommodation services, provides for general conditions restricting the setting of prices by accommodation establishments by means of clauses limiting freedom of pricing is acting unfairly. The expression "clauses limiting freedom of tariff" is generic. It includes both price parity clauses and clauses by which an accommodation establishment undertakes not to offer a price lower than that imposed by the platform operator. Price parity clauses can be narrow or broad. Within the framework of “restricted” rate parity clauses, an accommodation establishment undertakes to an online reservation platform not to offer rooms at a lower price on its own website. to the one it offers on the online reservation platform. As part of "broad" price parity clauses, an accommodation establishment undertakes not to offer prices on other distribution channels that are lower than those it applies on an online reservation platform. In particular, he cannot make more advantageous offers by phone, email or on a competing online reservation platform.