Portugal bans Accommodation OTA Price Parity Clauses

Portugal has amended its competition law in such a way that Booking and Expedia can no longer prohibit hotels in Portugal from charging lower prices than on their own or third-party platforms. The new law also prohibits platforms from offering unauthorised discounts.

Decree-Law no. 108/2021 was published on 7 December last, amending the legal framework for competition, the legal framework for individual practices restricting trade and the legal framework for general contractual terms. This Decree-Law shall enter into force on 1 January 2022.

Amendment to the Competition Act
Decree-Law 108/2021 introduces a new subparagraph (f) in Article 9(1) of the Competition Act, which reads as follows: "Agreements between undertakings, concerted practices between undertakings and decisions by associations of undertakings which have as their object or effect the prevention, distortion or appreciable restriction of competition in all or part of the national market shall be prohibited, in particular those which consist in establishing, in the context of the supply of accommodation goods or services in tourist resorts or local accommodation establishments, that the other contracting party or any other entity cannot offer, on an electronic platform or in an establishment in physical space, prices or other conditions of sale of the same good or service that are more advantageous than those practiced by an intermediary acting through an electronic platform. "
The violation of the provisions of Article 9 of the Competition Act may amount to 10% of the turnover of the target company, made in the financial year immediately preceding the final condemnatory decision issued by the Competition Authority (PCA).

Amendment to the Legal Framework for PIRCS

Within the legal regime of individual practices restricting trade, Decree-Law No. 108/2021 introduces a mechanism similar to the prohibition of the sale of goods at a loss, by adding Article 5º which states the following: "In the context of the provision of accommodation goods or services in tourist resorts or local accommodation establishments, it is prohibited for any
intermediary acting through an electronic platform to offer for sale a good or service to a business or a consumer at a price lower than the retail price agreed with the supplier of the good or the service provider, even at the cost of a total or partial reduction in the intermediary's contractually agreed remuneration."
The violation of this new rule constitutes a very serious economic offence, whose fine, to be applied by the Autoridade de Segurança Alimentar e Económica (ASAE), may reach a maximum of €2,500,000.00 (two and a half million euros).

Amendment to the Legal Regime of General Contractual Clauses
Decree-Law nr. 108/2021 introduces a new clause in the list of clauses relatively prohibited in relations between entrepreneurs or equivalent entities, adding paragraph j) to article 19 of the Legal Regime of General Contractual Clauses, which now provides as follows: "General contractual clauses which establish, in favour of the party providing them, excessive remuneration fees or which are discriminatory according to the nationality or place of establishment of the counterparty shall be prohibited, without prejudice to the legislation specifically applicable in the field of financial services. "