Antitrust Litigation 2022

Last Updated July 27, 2022

Switzerland

Law and Practice

Authors



AGON PARTNERS LEGAL AG has offices in Zurich and Berne, and specialises in antitrust and competition law. The firm offers a wide array of essential in-house services to anticipate, assess and overcome the various challenges businesses face in antitrust proceedings. In addition to their expertise, AGON PARTNERS’ experienced specialists have the privilege to draw on an international network of senior managers in regulatory agencies, as well as long-term experience in developing and executing effective procedural strategies. The firm continuously monitors and analyses existing legislative and legal developments, and is actively involved in shaping the academic discourse on the application and development of Swiss antitrust law via White Papers and presentations. On an ongoing basis, AGON PARTNERS provides clients with the latest insights and maintains a presence in the academic world, sharing its knowledge with the coming generation of antitrust attorneys.

Relative Market Power

In 2022 the concept of relative market power was incorporated into the Cartel Act. An undertaking with relative market power is an undertaking on which other undertakings are dependent for the supply of or demand for goods or services in such a way that there are no adequate and reasonable opportunities for switching to other undertakings. The newly enacted Article 4 paragraph 2bis of the Cartel Act allows companies to base their civil actions on it or to report abuses to the authorities.

Vertical Agreements

The Competition Commission (COMCO) is currently revising its Notice on the Treatment of Vertical Agreements under the Competition Law of 28 June 2010 and the accompanying explanations. This was mainly prompted by the revision of the EU Vertical Block Exemption Regulation, which entered into force on 1 June 2022, and the associated EU Vertical Guidelines. According to the authorities, as far as possible, the same rules should be applied in Switzerland in the area of vertical agreements as in the European Union in order to avoid isolating the Swiss markets and to create legal certainty. The Notice is currently in the consultation phase. Among the most notable changes is that the prevention of the effective use of the internet and wide parity obligations are newly included in the list of vertical restraints considered qualitatively serious.

Regulation of the Motor Vehicle Market

On 14 March 2022, the Council of States (the second chamber of the Swiss Parliament) adopted the Pfister motion after the National Council (the first chamber of Swiss Parliament) had already given its approval to it. The motion aims at the effective enforcement of the Cartel Act in the motor vehicle trade. The Federal Council must now transpose the COMCO motor vehicle notice into a Federal Council Ordinance. Unlike COMCO notices, Ordinances of the Federal Council are binding for courts as long as they do not violate the Federal Constitution or a federal law. Thus, not only the competition authorities but also the civil and administrative courts will, in principle, have to apply the future ordinance on automobile distribution.

Furthermore, COMCO recently announced the prohibition of a cartel in the car trade sector. Multiple car dealers formed an illegal cartel in Ticino between 2006 and 2018. They reduced competition among car dealers by keeping the sales prices of new vehicles for private individuals and the public sector at an excessive rate. For this purpose, the car dealers made agreements on submissions from public authorities, agreed on a joint pricing policy for the sale of new cars to private individuals and divided the canton of Ticino into multiple areas of activity. There actions are illegal under the Cartel Act. The car dealers faced total sanctions of CHF44 million. However, this decision may be challenged before the Federal Administrative Court in Switzerland.

COMCO has emphasised the influence of digitalisation in different markets in its annual press conference. COMCO recognises the chances and potential risks of digitalisation. As this topic becomes increasingly more important for all sectors, it will be interesting to observe changes in COMCO’s practice.

Legal Basis for a Claim for Damages

Article 12 (1) litera b of the Swiss Cartel Act constitutes the legal basis for a claim for damages resulting from a breach of competition law. However, the article explicitly refers to the Swiss Code of Obligations (CO) for such claims. As a result, claimants may recover damages resulting from a breach of competition law in accordance with the ordinary principles and provisions of Swiss contract and tort law. While Articles 13 and 15 of the Swiss Cartel Act provide some specific procedural rules for civil proceedings concerning such claims, the majority of the procedural rules stem from the Swiss Code of Civil Procedure (CPC).

Follow-On and Standalone Claims

Even though there is no specific legislation for follow-on claims, both follow-on and standalone claims are available according to Swiss law. The plaintiff may take civil action based on the findings of COMCO. However, a decision of COMCO is not necessary, as civil proceedings may also be started without an open investigation by COMCO.

There are neither specialist competition courts nor specialist competition judges in civil courts in Switzerland. In fact, civil competition cases are assigned to the common civil courts or commercial courts (if any).

As every Swiss canton is competent to establish the organisation of its courts, the court is assigned by cantonal law, the only federal law requirement being that there may only be one single court in each canton that handles competition cases (Article 5 (1) litera b, CPC). In most cantons, the law assigns civil competition cases to a higher cantonal court. Some cantons (ie, Zurich and Berne) have established special courts for commercial matters, which are also the competent courts for civil competition cases in these cantons. However, even these courts do not specialise exclusively in competition law, but deal with commercial matters more generally.

Decisions of the Competition Commission

Decisions of COMCO are not binding for civil courts. Such decisions will nevertheless be of great importance in civil proceedings, as, in practice, civil judges will hardly ever deviate from COMCO’s opinion. As a result, such decisions may facilitate follow-on claims.

Expert Opinion by the Competition Commission

In the event that a civil court has to assess the legality of a restraint of competition, it is obliged by law to refer the case to COMCO for an expert opinion (Article 15 (1), Cartel Act). The opinion is limited to a legal assessment based on the facts provided by the court and, as is the case for COMCO’s decisions, COMCO’s expert opinion is not binding on the civil court; rather, how the expert opinion is weighed and evaluated as evidence is a matter for the judge.

Decisions of National Competition Authorities (NCAs) of Other Countries

Decisions of foreign NCAs may be submitted by the parties as evidence during civil proceedings. However, as a consequence of the principle of unfettered assessment of evidence by the court, how much weight to give the decision of a foreign competition authority is a matter for the judge.

Burden of Proof

As a general principle of Swiss civil law, the burden of proof lies with the person who derives rights from the disputed fact in question (Article 8, Swiss Civil Code). Therefore, the burden of proof concerning claims for damages lies with the plaintiff. In particular, the plaintiff has to quantify and prove the damages. However, the court may estimate the damages according to Article 42 (2) of the CO if an exact quantification is impossible.

In accordance with the general rule mentioned above, the burden of proof in establishing a pass-on defence lies with the defendant.

Standard of Proof

The parties need to provide persuasive evidence for all relevant disputed facts for which they have the burden of proof. The judge has to be fully convinced that the facts took place as the party alleges. It is to be noted that the court is free to weigh and evaluate the evidence provided by the parties. There are no specific rules on how to assess the evidence (principle of the free assessment of evidence).

Although there are no specific rules and there has been no court ruling on this matter, claims are, in principle, not limited to those purchasers directly affected by illicit behaviour. In order to have standing for a claim, it is therefore sufficient for the claimant to be affected by the restraint of competition even in an indirect way. As a result, it is neither necessary for the claimant to be a competitor nor does the restraint necessarily have to be directly aimed at them. According to the prevailing doctrine, consumers are, however, not authorised to bring claims based on the Cartel Act.

An estimation of an average duration of the proceedings is difficult. On the one hand, there are not many comparable cases in Switzerland. On the other, the duration depends on several factors, such as the complexity of the case, the workload of the court and granted extensions of deadlines to the parties. Consequently, the duration varies from case to case. Civil competition actions tend to be more complex than most other civil proceedings, which is likely to contribute to the proceedings taking longer than other civil proceedings in Switzerland. The duration can therefore range from one year to several years. This is especially true if the proceedings are suspended.

Suspension of Proceedings

The court may stay the proceedings based on Article 126 (1) of the CPC if expediency so requires. The proceedings may be suspended if the decision is dependent on the outcome of other proceedings. This could be the case if the civil judge submits a question to COMCO for an expert opinion. The judge can only make their decision once the expert opinion is available. Moreover, it is conceivable that a civil court would stay civil proceedings pending the conclusion of parallel administrative antitrust proceedings. This could be the case if the civil action were based on a cartel infringement to be established in the cartel proceedings.

The parties have the right to apply for suspension (see Article 126 (1)). The decision on this is subject to appeal in accordance with Article 126 (2) of the CPC.

Precautionary Measures

Strictly speaking, the handling of precautionary measures constitutes a separate procedure from the main proceedings. Such summary proceedings last between a few days and a few months. The duration also depends on whether the counterparty will be heard by the court in advance. See 4.1 Strike-Out/Summary Judgment.

Class/collective actions are not available in Switzerland – even though the introduction of class actions was discussed during the preliminary work for the CPC, the proposal was rejected in the end.

Individual claims arising from the same factual basis may, however, be bundled by way of consolidation and joinder of parties. Furthermore, it is also possible to assign individual claims to one person, who may bring all claims together.

Swiss law does not permit class actions.

Swiss law does not permit class actions.

In the context of cartel law, summary decisions are particularly relevant in connection with precautionary measures. According to Article 261 of the CPC, the court can take the necessary precautionary measures if the requesting party credibly demonstrates that:

  • a right to which that party is entitled has been violated or a violation is anticipated; and
  • the violation threatens to cause not easily reparable harm to the applicant.

Furthermore, even if not explicitly mentioned in Article 261 of the CPC, urgency in terms of time is part of the catalogue of prerequisites for precautionary measures.

In cases of particular urgency, especially where there is a risk of frustration, the court may order the precautionary measure immediately and even without hearing the other party (Article 265, CPC).

It is in the nature of things that precautionary measures are granted even before the filing of an action. In practice, interim relief is relevant in cases of abuse of a dominant position; for example, if a manufacturer with market power no longer supplies the dealer of its selective distribution system, even though the dealer continues to fulfil the selective distribution criteria. In this case, the civil judge can uphold the status quo of the supply with a summary decision valid for the duration of the proceedings.

Summary decisions would also be possible concerning claims that are based on undisputed or immediately provable facts and where the legal situation is obvious (so-called legal protection in clear cases).

International Cases

In international cases, jurisdiction for civil competition actions in Switzerland is assessed according to the Swiss Federal Act on International Private Law and the Lugano Convention. Jurisdiction in Switzerland is given in the following cases:

  • the defendant has its seat or domicile in Switzerland;
  • for lack of domicile – the defendant’s habitual residence is in Switzerland;
  • the damaging event occurred in Switzerland;
  • the damaging event had its effects in Switzerland; and
  • the parties may also agree on a place of jurisdiction for an existing or for a future legal dispute concerning pecuniary claims (Article 5, Federal Act on Private International Law, or PILA). This also includes claims based on the Cartel Act.

Domestic Cases

Similar rules apply in domestic cases. The court at the seat or domicile of the defendant has jurisdiction. Jurisdiction is also given at the place where the damaging event occurred or where it had its effects. Additionally, jurisdiction is also given at the seat or domicile of the claimant. Finally, the parties may agree on a place of jurisdiction and/or the applicable law.

Claims Based on Tort Law

For claims based on tort law, the relative limitation period is three years. The limitation period starts when the plaintiff has sufficient information about the damage and the person responsible for it. Irrespective of the claimant’s knowledge, however, damage claims based on tort law become statute-barred within ten years of the damaging conduct having come to an end.

Contract Claims

The statute of limitation period of a claim based on contract law depends first on the existing specific provisions of the contract in question. If there is no specific provision, the limitation period is ten years.

Claims for Removal or Cessation of Unlawful Restraints

There is no specific limitation period regarding claims for removal or cessation of the unlawful restraint of competition. Such claims can be brought before the court as long as the restraint exists or is imminent.

In addition, a party may waive the assertion of the limitation period for a maximum of ten years. This waiver may be repeated several times.

No General Duty of Disclosure or Pre-action Disclosure

Swiss law does not provide for a general duty of disclosure between the parties; in particular, pre-action disclosure is not available in Switzerland. Prior to the commencement of an action, a party can therefore only obtain information from the opposing party based on existing substantive information rights; for example, a contractual right to information or the right of a shareholder of a company. The Cartel Act does not grant to private plaintiffs any additional rights to access information.

Applications for disclosure in Swiss civil proceedings, meanwhile, are handled restrictively. Generally, disclosure will only be granted if the applying party succeeds in demonstrating that it requires a specific document in the possession of the other party.

Disclosure of COMCO’s Documents

If the plaintiff is a party to the administrative proceedings, it may obtain access to the competition authorities’ documents, except for leniency application files. The question of whether COMCO is obliged to also disclose files to a civil court has not yet been answered. The Federal Supreme Court recently ruled that, based on Swiss data protection legislation, COMCO may grant a canton at least partial access to the files of the proceedings if the canton wishes to bring a civil action (2C_1040/2018, 2C_1051/2018).

The public prosecutor's office and the criminal courts can consult files from other proceedings if this is necessary to prove the facts of the case or to assess the accused (Article 194 (1), CPC). A civil plaintiff who is at the same time affected by the criminal proceedings could inspect the files of the criminal proceedings and obtain COMCO’s files this way.

Legal Professional Privilege

Practising registered lawyers are subject to a professional duty of secrecy and may refuse not only to testify as a witness in a case on which they are advising but also to produce privileged documents. This is a comprehensive privilege that applies irrespective of where the documents in question are located, and irrespective of when they were created. However, this only applies to documents drawn up by a lawyer in the exercise of their traditional activities as a lawyer. If, for example, they act as a board member and prepare documents in this capacity, they are not protected.

In-House Counsel

Under Swiss law, no similar privilege exists to protect advice provided by in-house counsel. Documents prepared by, or held in the possession of, in-house counsel may therefore be requested by opposing parties in civil proceedings.

COMCO will generally deny access to statements made, and documents submitted, by leniency applicants. These files can only be inspected by the parties involved in the proceedings and are subject to a restriction on use. COMCO shall decree under penalty of infringement that the files may only be used to protect the rights within the scope of its proceedings. They may explicitly not be used for the enforcement of civil claims.

If a case has been the subject of an EU investigation, claimants may apply for access to the files and records of the European Commission and if access is granted, use the documents concerned in the respective civil proceedings in Switzerland.

Witness testimony can be submitted as evidence under the CPC and, if necessary, the court may compel witnesses to give evidence. Witness statements are usually made orally, the witnesses being subject to cross-examination. If the court does not deem it necessary for the witness to be questioned, though, it may request a witness to give evidence in writing.

The subject matter of the testimony is the statement of facts potentially relevant to the decision on a certain matter, which the witness has directly perceived themselves. Since cartel agreements are often concluded orally and secretly, testimony can be of great practical importance. However, courts tend to rely on written documentation rather than on witnesses if written documentation is available.

In competition law cases, judges can rely on expert witnesses.

The court may consider expert evidence on its own or at the request of a party. If the legality of a restraint of competition is in question, the court is even obliged to submit the question to COMCO for an expert opinion (Article 15 (1), Cartel Act). Since the Cartel Act calls on COMCO to act as an expert witness for competition violations and since the judge can even estimate damages in compensation cases, expert witnesses have not historically played a central role in civil cases. This could change, however, as even the estimation of damages in competition law cases is complex for civil judges. It would be conceivable that a civil judge could call in experts to better assess damages.

Expert opinions will always be requested in writing. The parties are free to challenge the expert opinions with their own expert reports. As a rule, a court attaches greater credibility to a court-appointed expert than to a party expert who is paid to represent a certain opinion. The court expert is not only subject to a duty to tell the truth but is also liable to prosecution for deliberately false expert opinions. Although various expert opinions are compared and assessed by the judge, there is no actual oral “hot tubbing”.

The amount of awarded damages will mainly be determined on the basis of the incurred loss that a claimant is able to prove. However, if it is not possible to establish the exact amount of damages, the judge may assess them at their discretion (Article 42 (2), CO). Furthermore, the judge may also assess the damages at their discretion if it is not possible to prove that an effective damage even occurred.

If it is impossible or unreasonable for the claimant to quantify their claim at the outset of the proceedings, they may bring an action for an unspecified claim. However, it must state a minimum value, which shall be deemed to be the provisional amount in dispute. The claim must be quantified as soon as the claimant is in a position to do so after the conclusion of the evidential steps or after the defendant has provided information (Article 85 (1) and (2), CPC).

Exemplary/Punitive Damages

Swiss law does not provide for an award of exemplary or punitive damages. However, parties affected by competition law breaches can demand restitution of the profits realised by the defendant due to the illicit behaviour under the Cartel Act. While claims for damages purport to compensate the claimant for losses suffered due to a breach of competition law, the restitution targets the return of ill-gotten gains. As such, it may, in particular, come into play where it is not possible to establish the claimant’s losses with sufficient certainty.

There are no specific legal provisions on pass-on defences and the question of their admissibility has not yet been decided by the Swiss courts. However, since the purpose of Swiss tort law consists in compensating the victim only for the damages effectively sustained, it must be assumed that the pass-on defence is admissible. Fundamental principles of Swiss tort law – particularly the prohibition of overcompensation in favour of the victim and the principle that a victim has to deduce any advantages and savings that they are able to achieve from the suffered damages – also lead to this conclusion.

As a result, if the defendant is able to successfully invoke the pass-on defence, the claimant will only be entitled to compensation for their remaining losses.

Interest on damages resulting from a breach of competition law is payable under the same conditions as interest for other damages based on tort or contract law. Interest includes pre-judgment interest, if applicable, as well as post-judgment interest. Interest is payable at the rate of 5% for the year, where the parties have not contractually agreed on another rate.

Joint and Several Liability

If several enterprises have contributed to a breach of competition law together (ie, participants in a cartel), the contributors are jointly and severally liable to those who have suffered damages from the breach. Thus, the claimant has the right to claim the full amount of damages from one selected contributor, who may then subrogate against the other contributors.

Liability of Immunity Applicants

There is no legal basis under Swiss law to treat immunity or leniency applicants differently from other contributors in this regard. Though leniency is offered by COMCO with regard to administrative sanctions, there is no direct link between leniency applications and civil procedures. As a result, leniency applications might fully or partly release the applicant from administrative sanctions, but not from the duty to pay damages or from the retribution of illicitly earned profits.

De facto, COMCO protects immunity applicants by not releasing their files for civil actions (see 5.3 Leniency Materials/Settlement Agreements).

Except for cases of summary judgments, the defendant may bring contribution proceedings against a third party; eg, other participants of a breach of competition law (Article 81 CPC). Contribution proceedings enable the defendant to lodge their claims against third parties within the proceedings of the claim against them. This constitutes a valuable remedy for the defendant if they intend to take regressive action against other contributors when ordered by the court to pay damages.

It is possible to obtain a preliminary injunction so as to prevent one party from continuing to engage in competition law breaches. In order to do that, the applicant must provide evidence of the competition law breach and demonstrate that they are likely to suffer irreparable harm if the infringement continues. In cases of extraordinary urgency, courts may even grant preliminary injunctions without hearing the other party.

Unlike in ordinary civil proceedings, the courts are not required to obtain a prior legal opinion from COMCO (Article 15, Swiss Cartel Act) in such cases even if the legality of the restraint of competition is in question.

Depending on the urgency of the dispute, the order can take anywhere from a few days to a few weeks or months.

As methods of alternative dispute resolution in civil competition law cases, mediation and arbitration are available in Switzerland and international contracts often provide for arbitration in Switzerland. Civil competition law disputes may therefore be submitted to arbitration, the arbitral tribunals being obliged to apply Swiss or European competition law if these laws are relevant to the outcome of the case.

However, in the event that European competition law is not, or not correctly, applied by an arbitral tribunal, it is extremely difficult to obtain an annulment of the result as the incorrect application of European competition law does not constitute a challenge ground in terms of a public policy ground in Switzerland.

The Swiss Federal Supreme Court decided in 2004 that third-party funding is permitted in Switzerland. However, the court also pointed out that, under certain circumstances, third-party funding might affect the independence required by law of the respective lawyer. Incidentally, there are very few organisations that offer third-party funding for civil litigation in Switzerland. The organisations that do offer litigation funding assess the case based on its chances of successful trial. The litigation funder provides the financial resources for litigation funding on an ongoing basis. In many cases, they also assume the risk that the plaintiff has to pay the costs of the other party. In return, the litigation financier receives a share of the litigation profits. The participation can be determined, for example, on a percentage basis or on the basis of the investments made by the litigation funder.

As a general rule in Swiss civil law, the losing party bears the court costs and has to pay compensation for the expenses of the prevailing party. The judge has a certain amount of discretion, though, regarding the eventual allocation of the costs. The compensation is calculated based on cantonal fee schedules and does not usually cover all incurred expenses.

The decisions of the cantonal courts may be appealed to the Swiss Federal Supreme Court. Grounds for appeal are limited to false application of the law (federal law, international public law and constitutional law) by the cantonal court and to any obvious mistakes in the determination of the relevant facts. The Swiss Federal Supreme Court is bound by the facts established by the cantonal court (unless they are obviously erroneous) and, in general, new facts and evidence may not be submitted during the appeal proceedings.

AGON PARTNERS LEGAL AG

Wiesenstrasse 17
8008
Zurich
Switzerland

Mattenhofstrasse 5
CH-3007 Berne
Switzerland

+41 (0) 43 344 95 82

+41 (0) 43 344 95 83

info@agon-partners.ch www.agon-partners.ch
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Trends and Developments


Authors



AGON PARTNERS LEGAL AG has offices in Zurich and Berne, and specialises in antitrust and competition law. The firm offers a wide array of essential in-house services to anticipate, assess and overcome the various challenges businesses face in antitrust proceedings. In addition to their expertise, AGON PARTNERS’ experienced specialists have the privilege to draw on an international network of senior managers in regulatory agencies, as well as long-term experience in developing and executing effective procedural strategies. The firm continuously monitors and analyses existing legislative and legal developments and is actively involved in shaping the academic discourse on the application and development of Swiss antitrust law via White Papers and presentations. On an ongoing basis, AGON PARTNERS provides clients with the latest insights and maintains a presence in the academic world, sharing its knowledge with the coming generation of antitrust attorneys.

Introduction

Interesting changes in both Swiss legislation and authority regulation have occurred in the reporting year. In addition, the Swiss Competition Commission (COMCO) took up some new cases. Firstly, the amendment to the Law on Relative Market Power came into force at the beginning of 2022. Secondly, COMCO is currently revising the treatment of vertical agreements as a reaction to the revision of the European Vertical Block Exemption Regulation. Thirdly, it should be noted that the Swiss Parliament adopted the “Pfister motion” to ensure a stricter enforcement of the Cartel Act in the motor vehicle sector. Furthermore, COMCO initiated investigations against several potential cartels.

Legislative Changes

Relative market power

In 2022 the concept of relative market power was incorporated into the Cartel Act. An undertaking with relative market power is an undertaking on which other undertakings are dependent for the supply of, or demand for, goods or services in such a way that there are no adequate and reasonable opportunities for switching to other undertakings. The newly enacted Article 4 paragraph 2bis of the Cartel Act allows companies to base their civil actions on it or to report abuses to the authorities. However, there is no relevant case law addressing Article 4 paragraph 2bis of the Cartel Act yet.

Revision of the treatment of vertical agreements

COMCO is currently revising its Notice on the Treatment of Vertical Agreements under Competition Law of 28 June 2010 and the accompanying explanations. This was mainly prompted by the revision of the European Vertical Block Exemption Regulation, which entered into force on 1 June 2022, and the associated EU Vertical Guidelines. According to the authorities as far as possible, the same rules should be applied in Switzerland in the area of vertical agreements as in the European Union in order to avoid isolating the Swiss markets and to create legal certainty. The notice is currently in the consultation phase. Among the most notable changes, the prevention of the effective use of the internet and wide parity obligations are newly included in the list of vertical restraints considered qualitatively serious.

Adoption of Motion Pfister

On 14 March 2022, the Council of States (the second chamber of the Swiss Parliament) adopted the Pfister motion after the National Council (first chamber of the Swiss Parliament) had already given its approval. The motion aims at the effective enforcement of the Cartel Act in the motor vehicle trade. The Federal Council must now transpose the motor vehicle notice of COMCO into a Federal Council Ordinance. Unlike notices of COMCO, Ordinances of the Federal Council are also binding for courts as long as they do not violate the Federal Constitution or a federal law. Thus, not only the competition authorities but also the civil and administrative courts will, in principle, have to apply the future Ordinance on automobile distribution.

COMCO Investigations

Renovation of a public swimming pool

COMCO filed a complaint about the renovation of a public swimming pool. A municipality used a planning office for the renovation work. The planning office recommended that the renovation be awarded to a company of close relatives. The Zurich Administrative Court upheld COMCO’s complaint.

The aforementioned planning office invited several companies to submit offers on behalf of the municipality. The brother of the managing director of the planning office works for one of these companies. Based on the proposal of the planning office, the municipality intended to award the contract to this company. This procedure put other companies at a disadvantage and hindered competition. This violated the Internal Market Act as well as the rules of the Cantonal Procurement Law on the right of first refusal and the right of recusal. COMCO appealed to the Administrative Court of the Canton of Zurich, which upheld the appeal on 26 August 2021.

COMCO is aware from other notifications that the connection of planning activities and bid submissions repeatedly occurs in public awards. The competition authority therefore pointed out possible problems and solutions to selected municipalities last year as a preventive measure. Only fair procedures ensure market access, and thus competition, in procurement procedures. COMCO mentions that functioning competition contributes to quality and efficiency and prevents excessive prices.

Investigations against road renovation companies

COMCO opened a new investigation into possibly unlawful agreements on road renovations. If suppliers agree among themselves on the price at which they will bid and to whom the procurement contract will be awarded, they are entering into submission agreements that are illegal under cartel law. Submission agreements raise prices, make companies inefficient and inhibit innovation. They thus burden the economy and the public sector.

COMCO has received information about suspected bid rigging by four companies in the cantons of Fribourg, Jura, Neuchâtel and Vaud. It is suspected that these companies co-ordinated their offers and prices for several years for public procurement. This concerns tenders for road rehabilitation (gritting and bituminous surface treatment). COMCO has already carried out house searches at several companies in various cantons in western Switzerland. Within the scope of the investigation, it must be examined whether competition is in fact restricted under cartel law. COMCO announced that the investigation should take two years.

BERAG – Bernese pavement plant

Due to the high price of transporting paving/road construction materials, road construction companies prefer purchasing the pavement from a plant close to the construction site. BERAG is the largest producer of paving materials in the Bern region. BERAG’s shareholders are mainly road construction companies as paving materials are central to road construction.

BERAG has favoured its shareholders over other companies for years, tied its customers to itself and thus hindered competition. BERAG sold its flooring to its shareholders at preferential conditions and thus at significantly lower prices than to non-shareholders. By granting its customers a loyalty bonus with a long-term binding effect, COMCO assessed that BERAG abused its dominant position in the market.

In addition, some of BERAG’s shareholders agreed that, until 2016, they would not compete with BERAG in the vicinity of their plant, either through their own paving plants or through stakes they held in other paving plants (non-competition clause). This constitutes an inadmissible agreement on competition. 

COMCO fined BERAG over CHF1.5 million and eleven shareholders a total of over CHF400,000. Some of the parties declared their willingness to settle the proceedings amicably. The decision of COMCO can be appealed to the Federal Administrative Court.

Digital markets

COMCO has been dealing with questions around digitalisation for years and it has emphasised that digitalisation influences competition in a wide variety of markets. COMCO recognises that digitalisation harbours great opportunities and, in some cases, antitrust risks.

According to COMCO, the protective goal of effective competition applies to all markets. COMCO prioritises cases that have a particular domestic connection. Nevertheless, it works to ensure that antitrust solutions found in the EU, for example, are also applied to Switzerland if necessary.

Although the courts have repeatedly highlighted the quality of COMCO’s decisions, several political initiatives call the Cartel Act into question. According to COMCO they threaten to weaken the law. At the same time, urgent reforms are being left undone. The authorities emphasise that a competitive business location such as Switzerland needs modern competition rules based on industrial economic principles in order to ensure its continued economic performance and growth.

Cartel between car dealers in Ticino

COMCO fined seven dealers of Volkswagen cars in the canton of Ticino. They were involved in an illegal cartel in the sale of new cars to private individuals and the public sector from 2006 to 2018. Their aim was to reduce competition among car dealers and to keep the sales prices of new vehicles for private individuals and the public sector at an excessive level. The car dealers colluded on all sales activities in Ticino: they made agreements on submissions from the public authorities, agreed on a pricing policy for the sale of new cars to private individuals and divided the canton of Ticino into areas of activity.

The cartel members were fined a total of approximately CHF44 million. Five companies declared their willingness to settle the proceedings amicably. The decision of COMCO may be appealed to the Federal Administrative Court.

Investigation against Swisscom Directories

COMCO announced an investigation against Swisscom and its subsidiary “Directories” as there are indications that Directories is hindering competitors and disadvantaging end customers with the introduction of its “SWISS LIST” products. In 2019, Directories introduced the standardised product “SWISS LIST” and thus fundamentally changed the price and conditions for supplementing a telephone directory entry.

Directories is the publisher of the printed telephone directory and operator of the two online directory services “local.ch” and “search.ch”. Until now, the businesses listed there could individually supplement their entry with further information. With SWISS LIST, various products and services will only be offered as a bundle. According to an initial assessment, this might lead to disadvantages and barriers for competitors.

COMCO is examining whether Swisscom Directories actually holds a dominant position in the market and whether it abused its position within the meaning of the Cartel Act.

Conclusion

COMCO has dealt with many different issues in the reporting year. It will be particularly interesting to follow the further development of the case law related to relative market power. It remains to be seen whether COMCO will follow the lead of the EU or that of other countries (eg, Germany), or whether it will go its own way (often known as “Swiss finish”), particularly concerning digital markets and vertical restraints in the car sector.

AGON PARTNERS LEGAL AG

Wiesenstrasse 17
8008 Zurich
Switzerland

Mattenhofstrasse 5
CH-3007 Berne
Switzerland

+41 (0) 43 344 95 82

+41 (0) 43 344 95 83

info@agon-partners.ch www.agon-partners.ch
Author Business Card

Law and Practice

Authors



AGON PARTNERS LEGAL AG has offices in Zurich and Berne, and specialises in antitrust and competition law. The firm offers a wide array of essential in-house services to anticipate, assess and overcome the various challenges businesses face in antitrust proceedings. In addition to their expertise, AGON PARTNERS’ experienced specialists have the privilege to draw on an international network of senior managers in regulatory agencies, as well as long-term experience in developing and executing effective procedural strategies. The firm continuously monitors and analyses existing legislative and legal developments, and is actively involved in shaping the academic discourse on the application and development of Swiss antitrust law via White Papers and presentations. On an ongoing basis, AGON PARTNERS provides clients with the latest insights and maintains a presence in the academic world, sharing its knowledge with the coming generation of antitrust attorneys.

Trends and Development

Authors



AGON PARTNERS LEGAL AG has offices in Zurich and Berne, and specialises in antitrust and competition law. The firm offers a wide array of essential in-house services to anticipate, assess and overcome the various challenges businesses face in antitrust proceedings. In addition to their expertise, AGON PARTNERS’ experienced specialists have the privilege to draw on an international network of senior managers in regulatory agencies, as well as long-term experience in developing and executing effective procedural strategies. The firm continuously monitors and analyses existing legislative and legal developments and is actively involved in shaping the academic discourse on the application and development of Swiss antitrust law via White Papers and presentations. On an ongoing basis, AGON PARTNERS provides clients with the latest insights and maintains a presence in the academic world, sharing its knowledge with the coming generation of antitrust attorneys.

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