Indirect counter-proposal to the Fair Prices Initiative enacted

Bern, 17.09.2021 - At its meeting on 17 September 2021, the Federal Council decided to enact the indirect counter-proposal to the the Fair Prices Initiative on 1 January 2022. This indirect counter-proposal, adopted by Parliament, entails an amendment of the Cartel Act and the Federal Act against Unfair Competition.

On 19 March 2021, Parliament adopted an indirect counter-proposal to the Fair Prices Initiative, which aims to fight against high prices in Switzerland. The indirect counter-proposal implements four of the five demands of the Fair Prices Initiative. Following Parliament's decision, the initiative was conditionally withdrawn on 25 March 2021. The referendum period expired unused on 18 July 2021.

Undertakings with relative market power

The indirect counter-proposal adopted by Parliament involves an amendment of the Cartel Act (CartA) in two respects. Firstly, the concept of relative market power will be explicitly incorporated into Swiss competition law (insertion of the new Art. 4 para. 2bis CartA and an amendment of Art. 7 para. 1 CartA). Secondly, the existing general examples that may constitute an abuse of a dominant position will be expanded to include an additional one (Art. 7 para. 2 let. g I-CartA). This new general example concerns freedom of procurement abroad and will apply to both undertakings with relative market power and dominant undertakings.

An undertaking will in future be considered to have relative market power if one or more other undertakings are dependent on it in such a way that there are no sufficient and reasonable possibilities for them to switch to other undertakings.

Both commercial customers and suppliers of goods and services can be dependent, provided that they are undertakings. Individual consumers are not included. This exclusion also applies to the public sector, provided that it is not considered an undertaking in individual cases (e.g. hospitals, transport companies).

Private geo-blocking is unlawful in principle

Parliament’s indirect counter-proposal also includes an amendment of the Federal Act against Unfair Competition (UCA). With the introduction of Art. 3a UCA, the use of geo-blocking measures by companies that are not imposed by the state (private geo-blocking) is to be considered unfair and therefore unlawful. Consequently, discrimination of Swiss customers with regard to prices or terms of payment in distance selling (i.e. internet, telephone, catalogue) will in future only be possible if there is an objective reason.

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