3. juillet 2018

Online Booking Platforms: «Lex Booking» ahead

Like other foreign competition authorities, the Comco has investigated terms and conditions of Booking and other similar platforms applicable to hotels and, more specifically, carried out an assessment of parity clauses broadly speaking. These provisions prevent hotels from making cheaper offers through any other distribution channel than the online booking platform, whereas parity clauses in a narrow sense prevent hotels from making cheaper offers on their own website. The authority held that parity clauses broadly speaking are not compliant with competition law. By contrast, the Comco considered that no empirical study supported the prohibition of parity clauses in a narrow sense and that such clauses were even likely to be procompetitive (DPC/RPW 2016/1, p. 67 et seq.).
Anticipating reactions at the political level, the Comco warned that prohibiting parity clauses in a narrow sense could lead to free riding issues. Also, addressing issues raised by online booking platforms in the Act on Cartels would not be in line with the principle of sector neutrality underpinning this regulation (https://www.letemps.ch/suisse/2017/04/11/ reservations-ligne-comco-appelle-prudence).
However, the Federal Parliament considered that the Comco’s intervention did not address to a sufficient extent the issues raised by online platforms and, on September 18, 2017, accepted a motion, according to which the Federal Council would have to propose a bill aiming at prohibiting parity clauses in a narrow sense. Thus, Swiss hotels would be able to freely set, again, their own Prices.
At this juncture, it is uncertain whether the prohibition will be implemented through an amendment of the Act on Cartels or the Act against Unfair Competition. More likely, it will be through a new piece of legislation, the so-called « Lex Booking ».
Last, it is worth mentioning that the separate issue of the option offered by online booking platforms according to which hotels may obtain better rankings in consideration of the payment of fees is pending before the Federal Price Supervisor.