What is meant by the new exemption for accommodation establishments under the Competition Act issued on 27 March by the Minister of Department of Trade, Industry and Competition?

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Published: March 28, 2020

Regulations have been passed (Competition Regulations: COVOID-19 Block Exemption for the Hotel Industry, 27 March 2020) exempting certain agreements and practices in the hotel industry from section 4 and 5 of the Competition Act (restrictive horizontal and vertical practices).

According to the Regulations hotels are defined as all forms of business providing short term accommodation and other services. This exemption pertains to agreements and practices aimed at:

Identification and provision of facilities: 

(a) identifying and providing appropriate facilities for the accommodation of persons placed under quarantine, and

(b) communicating with each other in relation to capacities and utilisation of facilities for the accommodation of persons placed under quarantine.

Cost reduction measures: communicating and agreeing on the reduction of the cost of providing appropriate facilities for the accommodation of persons placed under quarantine. The exemption is only applicable if undertaken in coordination with the Department of Health and the Department of Tourism, in responding to the COVID-19 epidemic and excludes communication in respect of prices unless specifically authorised. Any discussion on pricing amongst the hotel industry for the purpose of providing appropriate quarantine facilities must be specifically authorised by the Minister of Health and the Minister of Tourism. Parties in the hotel industry participating in any agreements or practices falling within the scope of these exemptions must keep minutes of meetings held and written records of such agreements.

For more information, you can access these regulations here.

 

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