Switzerland: Lex Booking – Switzerland further restricts the contractual freedom of online booking platforms
As is well known, online booking platforms often contractually restrict the freedom of accommodation providers to set their own prices for the accommodation they offer (so-called “price maintenance clauses”). A newly passed amendment to the Swiss law against unfair competition (UWG) now restricts this and other practices of online booking platforms.
- Ban on wide price-parity clauses since 2015
- Further restrictions on the contractual freedom of online booking platforms
- Next Steps
The general term “price maintenance clause” includes price parity clauses and clauses that an accommodation provider undertakes not to fall below a certain lower price specified by the platform operator. In the case of price-parity clauses, a distinction must be made between narrow and wide price-parity clauses. In the case of narrow price parity clauses, an accommodation provider undertakes to an online booking platform not to charge a lower price on its own website than on the online booking platform. In the case of broad price-parity clauses, an accommodation provider undertakes not to offer lower prices on any other sales channel, i.e. not by e-mail or telephone, or on any other competing online booking platform.
In 2015, the Swiss Competition Commission prohibited operators of booking platforms from restricting accommodation providers in their offer policy through these so-called broad price-parity clauses. The study focused on contractual clauses of the platforms, according to which accommodation providers were not allowed to set lower prices or offer a larger number of rooms through any other distribution channel. Therefore, accommodation providers could not offer cheaper offers on distribution channels with lower commission rates. With a ruling of October 19, 2015, COMCO considered the use of these contractual clauses to be a violation of the Swiss Antitrust Act and therefore prohibited them (cf here).
In 2016, a member of the Swiss Parliament called on the Federal Council to ban so-called “narrow price maintenance clauses” in contracts between online booking platforms and accommodation providers (cf here). The Federal Council initially did not want to follow this demand, but the majority of the Swiss Parliament instructed the Federal Council to draw up a draft for a new provision in the Swiss CopA.
The Federal Council has therefore drawn up a new Art. 8a UWG, which provides for a ban on the use of general terms and conditions by online booking platforms that restrict the pricing of accommodation providers by means of price parity clauses (cf here). However, this draft was deemed insufficient by Parliament, which last week agreed to add an availability ban and condition parity clauses (cf here).
As a consequence, the new Article 8a UWG will prohibit the use of general terms and conditions by online booking platforms that directly or indirectly restrict the pricing and the offer of accommodation providers through parity clauses, namely through price, availability or condition parity clauses. This means that online booking platforms can no longer demand that accommodation providers offer them the same or better prices and conditions for the same accommodation with (at least) the same features as those offered by the hotels on their own online channels or any other (online and offline) channel.
While a minority of the Swiss Parliament wanted to prosecute violations of this new Art. 8a UWG, this was ultimately rejected. The use of parity clauses by online booking platforms is therefore only sanctioned under civil law and affects both accommodation providers and competitors, professional or business associations and, if collective interests are at stake, the federal government can sue the booking platforms concerned under civil law.
Both chambers of the Swiss Parliament approved the text of the new Art. 8a UWG on June 8, 2022. It is now up to the Federal Council to decide when these new restrictions on online booking platforms will come into force.