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Federal Council amends Price Disclosure Ordinance

In brief

On 25 May 2022, the Federal Council passed an amendment to the Price Disclosure Ordinance (PDO). The purpose of the amendment is to ensure clarity and comparability of prices and to prevent the use of misleading prices. This latest amendment was precipitated by federal court ruling 4A_235/2020, which caused uncertainty on the question of the timing of price disclosure in online trade.


Contents

  1. Point in time of price disclosure
  2. Detailed price
  3. Evaluation of the amended PDO
  4. Consequences in case of non-compliance with new requirements
  5. Next steps

Point in time of price disclosure

Pursuant to the newly amended Article 3 Paragraph 1 PDO consumers have to be informed of the actual price to be paid (so-called detailed price) in Swiss francs at the point in which the purchase offer is made to the consumer. It is no longer permissible to disclose the detailed price at a later point, or as is often done, shortly before the conclusion of the contract. In addition, in case the offer concerns measurable goods, the base price of such measurable goods must be disclosed at the same time as the detailed price, namely at the time the offer is made (Article 1, Paragraph 5 PDO).

This rule further extends to services falling within the scope of Article 10, Paragraph 1 of the PDO, meaning that any offering of these services has to be accompanied by the detailed price of the services.

The PDO is technologically neutral and applicable to both physical and online commerce. In physical retail, the detailed price has to be disclosed alongside the displayed goods and services in the store. Detailed price disclosure at the checkout is no longer admissible. The same applies to online retail, where detailed prices are required to be disclosed alongside (i.e., at the same time and place) the displayed offers. The disclosure of detailed prices at the end of the purchase process or as part of an order overview will no longer be sufficient.

Detailed price

This newest amendment of the PDO further clarifies what charges form part of the detailed price, i.e., the price that must actually be paid by the consumer after conclusion of the contract. According to the revised Article 4, Paragraph 1 of the PDO, the detailed price includes passed-on public charges, copyright fees, advance disposal fees and other surcharges of any kind that cannot be freely selected, namely charges for reservation, service or processing. Only shipping costs may be disclosed separately. The same rule applies to services; pursuant to Article 10 Paragraph 2 of the PDO, passed-on public charges, copyright fees and all other kinds of surcharges which cannot be freely selected, namely for reservation, service or processing, must be included in the detailed price. An exception only applies to visitor’s taxes, which may be disclosed separately.

Evaluation of the amended PDO

The amendment to the PDO is in line with the practice of the State Secretariat for Economic Affairs (SECO) and the enforcement authorities of the cantons. It runs, however, counter to previous decisions taken by the Federal Supreme Court (see namely ruling 4A_235/2020 of 1 December 2020), in which the court deemed the disclosure of the detailed price shortly before conclusion of the contract as sufficient, given that the PDO did not sufficiently specify a point in time at which the price must be disclosed.

Against the backdrop of this divergence between case law and the practice of the SECO and the cantonal enforcement authorities, the amended PDO provides for welcome clarification. This clarification is also in line with the interest of consumer protection.

Consequences in case of non-compliance with new requirements

As already applies today, all violations against the provisions of the PDO are punishable by fine of up to CHF 20,000 pursuant to Article 24  of the Unfair Competitions Act.

Next steps

The amended PDO will enter into effect on 1 July 2022.

Author

Tiziana Hongler is an Associate in Baker McKenzie, Zurich office.

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