Switzerland: Lex Booking – Switzerland further restricts the contractual freedom of online booking platforms

In short

It is well known that online booking platforms often contractually restrict the freedom of accommodation providers to set their own prices for the accommodation offered (so-called price-fixing clauses). A recently adopted amendment to the Swiss law against unfair competition (UCA) now limits these and other practices of online booking platforms.

Contents

  1. Prohibition of broad rate parity clauses since 2015
  2. Additional restrictions on the contractual freedom of online booking platforms
  3. Next steps

Prohibition of broad rate parity clauses since 2015

The general term “price-fixing clause” includes price-matching clauses as well as clauses whereby a hosting provider agrees not to undercut a certain lower price specified by the platform operator. form. In the case of price parity clauses, a distinction must be made between narrow and broad price parity clauses. In the event of narrow price parity clauses, a host undertakes vis-à-vis an online booking platform not to demand a lower price on its own website than on the online booking platform. In the event of broad price parity clauses, a host undertakes not to offer lower prices on any other sales channel, i.e. neither by email, nor by telephone, nor on another online booking platform. competing line.

In 2015, the Swiss Competition Commission prohibited booking platform operators from restricting accommodation providers in their offer policy by means of these so-called extended price parity clauses. The investigation focused on the contractual clauses imposed by the platforms, according to which the hosts were not allowed to set lower prices or offer more rooms on any other distribution channel. Therefore, hosting providers could not offer better offers on distribution channels with lower commission rates. In a judgment of October 19, 2015, the Competition Commission considered the use of these contractual clauses to be a violation of Swiss cartel law and therefore prohibited them (see here).

Additional restrictions on the contractual freedom of online booking platforms

In 2016, a member of the Swiss Parliament asked the Swiss Federal Council to also ban so-called “narrow pricing” clauses in contracts between online booking platforms and accommodation providers (see here). The Federal Council initially did not want to comply with this request, but the majority of the Swiss Parliament ordered the Federal Council to draw up a draft new provision for the Swiss LCU.

The Federal Council has therefore drafted a new article 8a LCU, providing for the prohibition of the use of the general conditions by online booking platforms which restrict the pricing of accommodation providers by means of tariff parity clauses (see here). However, this plan was deemed insufficient by parliament, which agreed last week to add a ban on availability and parity clauses in the conditions (see here).

Accordingly, the new Article 8a UCA will prohibit the use of terms and conditions by online booking platforms, which directly or indirectly restrict the pricing and supply of accommodation providers by parity clauses, in particular by parity of price, availability or conditions. This means that online booking platforms will no longer be allowed to require accommodation providers to provide them with the same or better rates and conditions for the same accommodation with (at least) the same features, as provided by hotels on their own online channels. or any other channel (online and offline).

While a minority in the Swiss Parliament wanted to subject violations of this new Article 8a UCA to criminal sanctions, this was ultimately rejected. The use of parity clauses by online booking platforms is therefore not subject to civil penalties and affects accommodation providers but also competitors, professional or trade associations and, if collective interests are at stake, the federal government may bring a civil action against the booking platforms concerned.

Next steps

Both chambers of the Swiss Parliament approved the text of the new Article 8a UCA on June 8, 2022. It is now up to the Swiss Federal Council to decide when these new restrictions for online booking platforms will come into force.

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