The authors of the popular "fair prizes" initiative can put themselves on the shoulder. In the Ministry of Economy of Johann Schneider-Ammann, the initiative launched by business circles, although little appeal, but the majority of the Federal Council on Wednesday, a counter-proposal in the consultation, which takes over the core of the interests of the promoters. In the words of the Federal Council, this is "to strengthen the freedom of procurement of Swiss companies abroad to facilitate parallel imports".
It sounds a bit technical, but the main concerns of the promoters are well understood: hotels, machine manufacturers and other Swiss SMEs can not be disadvantaged in international competition by having to pay their suppliers 30 or 50% more abroad than foreign competitors,
Unlawful price discrimination and refusal of delivery are already banned for dominant companies. The popular initiative wants to extend these prohibitions to "relatively powerful" companies. According to the initiative, the "relatively strong" attribute does not refer to the full market position of a company, but in any case only to the bilateral relationship with the other individual companies (business customers or suppliers). Accordingly, a company is relatively market dominant as a supplier in a bilateral relationship, if the affected business customer has no reasonable alternative. For such cases, the initiative requires mandatory delivery to local conditions.
Limited to foreign countries
The draft of the Federal Council as a counter proposal to tighten up the antitrust law translates the core concerns of the initiators, but does not go further than the initiative. No facts should therefore be influenced in the country. According to the bill, companies with a relatively strong market position in general for dependent Swiss business customers should serve at the prices offered there, provided that a refusal to distort competition leads to the detriment of the business customer. In concrete terms: a Swiss mechanical engineer who is dependent on a German component supplier may be able to demand that he obtain the same prices in Germany as his German competitors.
According to the explanatory report from the Federal Council, providers of digital services, such as foreign online switching platforms, would also be affected. The hotel reservation platform Booking.com is currently in conflict with the price supervisor in Switzerland because in absolute terms it requires considerably higher brokerage costs than in the surrounding countries. If a Swiss hotel is dependent on this platform and is at a disadvantage compared to hotels in other countries because of the higher installation costs, the Swiss branch may be able to impose a reduction of the installation costs to, for example, German or French levels.
The case law should clarify a few questions. For example: in which cases is a company "dependent" on its supplier? The federal council emphasizes in its report that in Germany, whose concept of relative market power served as a model for the authors of the citizens' initiative, even after decades of legal practice, the assessments of relative market power in this particular case are still full of uncertainty. Because of such uncertainties, the counter-proposal, as well as the initiative for relatively market-dominating companies, does not provide for direct penalties, even if the competition authorities or courts determine inadmissible price discrimination or refusal to deliver.
The case law should also clarify in which cases for a Swiss company the "supplement Switzerland" of a supplier leads to a relevant disadvantage in international competition.
Against geo-blocking ban
Despite the restriction to foreign facts, according to the Federal Council, the proposal does not contain "direct discrimination" and is therefore compatible with Switzerland's international obligations. However, the government has not ruled out that, in certain cases, due to the possible concerns of only international companies, some other countries may become ill.
Whether the counter-proposal of the Federal Council leads to withdrawal of the citizens' initiative is still open. A residual problem is the call of the initiative to ban the protection of geographic markets in online trading (geo-blocking). The federal council does not want a unilateral ban, because it would hardly be possible to implement it without agreement with foreign countries (especially with the EU).