Jusletter IT

Winter sport is dependent mainly of three factors: currency, economy and weather. For the past years winter tourism in Switzerland has been declining.¹ The strong Swiss franc and the economic crisis of 2008 seem to have contributed their share to this decline², and also this year many winter destinations in Switzerland are still waiting for snow. Hence, competition between the skiing destinations seems to have become fierce. To attract more winter tourists, the skiing resorts have launched aggressive pricing schemes.

In 2016 Saas Fee launched a crowdfunding campaign by offering the skiing pass for the entire season for only CHF 222 instead of CHF 1’050.³ The successful campaign was repeated in 2017⁴ and for this coming winter the skiers are enjoying once again a massively reduced skiing pass for CHF 255⁵.

Other skiing destinations took another route. Laax, Andermatt Sedrun and St. Moritz introduced dynamic pricing.⁶ Besides the already known pre- and main season pricing, skiing tickets are also cheaper on weekdays and more expensive on weekends. The price will also adjust based on booking time⁷, demand⁸ and/or weather conditions⁹.

The difference between dynamic pricing and personalized pricing is that the former adjusts prices based on generally available information without implying any kind of discrimination between consumers, whereas the latter charges a different price to consumers based on their personal characteristics.¹⁰ So could it be that you will not only pay a higher price based on booking date, daily (or even hourly) ticket demand, or weather conditions, but also based on your personal data, e.g. based on what skiing equipment you bought or rented, your country of origin¹¹, what hotel you booked, how often you go skiing, or how much you spent in the (mountain) restaurant?

As use case I selected the general terms and conditions of the «Weisse Arena Gruppe WAG» in Laax, in particular the group’s special terms and conditions for the sale of lift tickets¹² (STC Tickets) and the group’s privacy policy¹³ (PP). The WAG group comprises companies for mountain railways, leisure and adventure, gastronomy, lodging, and ICT.¹⁴

According to art. 3 STC Tickets, the customer accepts the price applicable at the time the contract is concluded, i.e. at the time of payment. The agreed price may differ from those published on the internet or in brochures. The legal basis for dynamic pricing is given.

According to art. 3 PP, the main purpose of data processing by the WAG group is to offer products and services to customers. Customer data collected includes address, country, hotel details, ticket and reservation history, location data and guest profile data on the portals laax.com (winter website) and flims.com (summer website) (art. 4 PP). Consent is also explicitly provided to allow customer data being shared within the entire WAG group (art. 5 PP).

Given the intra-entity sharing of personal data, the customer information that the WAG group processes might be sufficient technically to charge a different price per consumer based on personal characteristics. As it also places cookies on its websites, uses web analytics tools, and implements social media plugins (art. 9 to 11 PP), it could also provide a personalized price to a customer that revisits the websites, i.e. not necessarily knowing such customer personally.

However, to provide personalized pricing, the WAG group would need to establish a profile of its customers. Profiling is regulated by data protection law. The Swiss Federal Act on Data Protection¹⁵ (FADP) defines «personality profile» as a collection of data that permits a (whole or partial) assessment of essential characteristics of the personality of a natural person (art. 3 lit. d FADP). Data files about consumers' behaviour permit at least partially an assessment of the data subject.¹⁶ But in this case here, the data collected is limited to data within the WAG group (i.e. only a subset of consumers' behaviour) and therefore might not fall within the definition of profiling. In such case no consent is necessary according to art. 4 (5) FADP. If a customer accepts the WAG group’s terms during the purchase process (and thereby explicitly agrees to his/her personal data being shared within the entire WAG group (art. 5 PP)), then currently personalized pricing seems permissible in this use case under Swiss law.

The EU General Data Protection Regulation (GDPR)¹⁷ is more stringent. It stipulates that the data subject must be informed about the existence of any automated decision-making, including profiling, and consent to such techniques (art. 22 (1) in connection with art. 13 (2) (f) GDPR). Hence, a data subject shall have the right to decline any assessment of personal aspects that (i) are based solely on an automated decision-making, and (ii) have a legal impact on the data subject.¹⁸ As art. 5 PP foresees neither consent for such a purpose nor a right to decline, personalized pricing does not seem permissible under GDPR in this use case.

Therefore, in the use case described, the skiers sitting next to you in the cable car might have paid a different dynamic price for their tickets because they booked and paid the tickets on a different day; and, if algorithms enabling dynamic pricing are implemented by the WAG group, these skiers might, under current Swiss law, also have paid a different (personalized) price because they are lodging in a cheaper or more expensive hotel than you. But under the revised FADP¹⁹, which includes automatic processing of personal data, personalized pricing in this use case will likely not be permissible anymore under Swiss law.

Daniel Ronzani