Government announces plans to curb cartel-driven prices

Swiss shoppers often spend considerably more on basic products than their European neighbours. Keystone

The government has presented a counter-proposal to the so-called ‘Fair Price’ initiative that wants to tackle high prices in Switzerland by limiting the power of big importers and their foreign suppliers.

Judging the demands of the initiators – who want courts to examine the pricing policies of Swiss firms and to end the practice of ‘geo-blocking’ – to be too extreme but sound in principle, the government published its counter-proposal on Wednesday.

Basing its text on an adaptation of existing legislation on cartels, the government says that it would restrict the measures to cases of market partitioning within Switzerland.

It wants to oblige Swiss firms with “relative market power” (i.e. firms that are depended upon by others for access to goods or services) to provide their Swiss clients with access to the same foreign supply chain conditions as they themselves enjoy.

In other words, firms that block a Swiss client from accessing a foreign market under equivalent conditions would be acting illegally – if the practice leads to a distortion of competition among buyers.

The government claims that the key goal of the fair price initiative – to give more purchasing power to Swiss firms and thus foster competition on imports – would be achieved.

For the government, there is no sense in broadening the legislation to areas of domestic commerce that are not related to market partitioning.

Contrary to the initial idea, the counter-proposal also does not envisage an end to geo-blocking, a practice often used to prevent online shoppers accessing cheaper offers outside their own country.

The government’s proposal is under consultation until November 22. It recommends a rejection of the text of the initial people’s initiative, which nevertheless enjoys broad support from across the political spectrum.