Switzerland: The Competition Commission
Switzerland
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Switzerland: The Competition Commission

Switzerland: The Competition Commission

Switzerland

Switzerland: from the enforcer

Address: Hallwylstrasse 4, CH-3003 Bern, Switzerland
Tel: +41 58 462 20 40
Fax:+41 58 462 20 53
Contact us
Website: www.weko.ch

Contacts

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Prof. Dr. Andreas Heinemann,
President of the ComCo
Title: Prof. Dr.
Email: [email protected]

Questions and answers

How long is the head of agency’s term of office?

The tenure of members of extra-parliamentary committees is restricted to twelve years and ceases with the end of the relevant calendar year (article 8i, paragraph 1 Regierungs- und Verwaltungsorganisationsverordnung, RVOV; SR 172.010.1). The current president of the ComCo has been a member of the ComCo since 1 January 2011.

When is he or she due for reappointment?

The president’s current term of office will last until the end of 2022.

Which posts within the organisation are political appointments?

The members of COMCO, as well as the director and the deputy director of the Secretariat of the Commission (the Secretariat), are appointed by the Swiss government (the Federal Council).

What is the agency’s annual budget?

2020: 11.60 million Swiss francs.

How many staff are employed by the agency?

By the end of January 2020: 72.

To whom does the head of the agency report?

The ComCo (including its President) is independent of the administrative authorities. It may organise itself into chambers, each with independent decision-making powers. It may, in individual cases, authorise a member of the presiding body to settle any urgent business or matters of minor importance (article 15, paragraph 1 Federal Act on Cartels and other Restraints of Competition (Cartel Act, CartA; SR 251).

Administratively,ComCo is part of the Federal Department of Economic Affairs, Education and Research (EAER) (article 15, paragraph 2 CartA).

According to ComCo’s internal rules of procedures, the director, together with the staff appointed by him, informs the ComCo and the presiding body about all matters in their field of competence and about the ComCo Secretariat’s(hereafter Secretariat) activities in general (article 31, paragraph1 lit. e Geschäftsreglement der Wettbewerbskommission, GR-WEKO; SR 251.1).

Do any industry-specific regulators have competition powers?

Yes.

If so, how do these relate to your agency’s role?

The Federal Communications Commission (ComCom) must consult the Competition Commission when the market position of communications companies is called into question. Similarly, the Railways Arbitration Commission (RACO) must consult the Competition Commission if there are essential questions with respect to non-discriminatory access to the rail infrastructure that relate to the Swiss Cartel Act.

May politicians overrule or disregard authority’s decisions? If they have ever exercised this right, describe the most recent example.

Yes, but only in exceptional cases. Agreements or behaviors found to be in violation of Swiss competition laws by COMCO may, in exceptional cases, be authorised by the Federal Council at the request of one of the parties on the grounds of compelling public interests. No such authorisation has been granted thus far.

Does the law allow non-competition aims to be considered when your agency takes decisions?

COMCO is not allowed to consider non-competition aims when taking decisions. However, in exceptional cases, authorisations by the Federal Council may be based on such grounds.

Which body hears appeals against the agency’s decisions? Is there any form of judicial review beyond that mentioned above? If so, which body conducts this? Has any competition decision by the agency been overturned?

The Federal Administrative Court. Decisions of the Federal Administrative Court can be appealed before the Federal Supreme Court. For actual rulings of these Court please refer to chapter 2.2 in the Annual Report 2019.

Has the authority ever blocked a proposed merger? If yes, please provide the most recent instance.

Yes. On 22 May 2017, COMCO prohibited the proposed merger between Ticketcorner and Starticket. The merger would have strengthened a dominant position liable to eliminate effective competition in the market for ticketing services. Ticketcorner has appealed the decision before the Federal Administrative Court. In May 2018, the latter dismissed the appeal without entering into the substance of the case. Ticketcorner has appealed the Federal Administrative Court’s decision before the Federal Supreme Court. The Federal Supreme Court upheld the appeal insofar as the Federal Administrative Court must enter into the substance and take a decision on this case (see also p. 8 of chapter 2.2. of Annual Report 2019).

In 2010, the proposed merger between France Télécom SA and Sunrise Communications AG was prohibited. COMCO found that this would have led to a collective dominance of the newly merged company and Swisscom in the mobile telecommunications sector, and that this collective dominance could have eliminated effective competition. Furthermore, COMCO found that there were no effective remedies or measures available to be used as merger conditions that could have countervailed the disadvantages of the merger (LPC 2010/3, p. 499 ff, France Télécom SA/Sunrise Communications AG). No other mergers have been prohibited yet.

In 2004, the Commission prohibited Berner Zeitung AG from taking a shareholding in 20minuten (Switzerland) AG, as this would have given Espace Media Group a dominant position in the print media and advertising market in the Bern area, which would have effectively eliminated any competition (LPC 2004/2, p. 529 ff). In 2007, the Federal Supreme Cord eventually decided that the creation of a dominant position itself was not enough to prohibit a merger. It must be shown that the possibility of an elimination of effective competition is resulting from the merger. As a result, the merger was allowed to be consumed.

Has the authority ever imposed conditions on a proposed merger? If yes, please provide the most recent instances.

Yes. An example is the Migros/Denner case. On 3 September 2007, COMCO authorised the takeover of Denner (No. 3 in the Swiss retail market) by Migros (No. 1 in the Swiss retail market). COMCO imposed an unlimited order prohibiting exclusive production agreements as well as a keep-separate order for the concerned companies for a limited period of time (LPC 2008/1, p. 129 ff, Migros/Denner). The Commission also imposed conditions in the Fenaco/Steffen Ris case (LPC 2008/2, p. 290 ff), the Coop/Fust case (LPC 2008/3, p. 475 ff), the Coop/Carrefour case (LPC 2008/4, p. 593 ff), the Post/NZZ/Tamedia und Post/Tamedia case (LPC 2009/4, p. 383 ff) and most recently in the Schweizerische Post/La Poste case (LPC 2012/4, p. 864 ff).

Has the authority conducted a Phase II investigation in any of its merger filings? If yes, please provide the most recent instances.

Yes. In 2019, two proposed mergers led to Phase II investigations: The Gateway Basel North (GBN) project, a hub for import and export movements and the rans-Alpine transit traffic goods (see page 6 the Annual Report 2019), and the planned merger between Sunrise and Liberty Global in the telco-sector (see page 7 the Annual Report 2019). This year, the merger investigation that started last year in December, on the acquisition of SBB Cargo has been waved by COMCO after a Phase II investigation.

Has the authority ever pursued a company based outside your jurisdiction for a cartel offence? If yes, please provide the most recent instances.

According to article 2, paragraph 2 of the Cartel Act, the Cartel Act applies to practices that have an effect in Switzerland, even if they originate in another country. Based on this article, COMCO sued BMW, a German car manufacturer, for unlawful practices that had negative effects on the Swiss market. In its ruling of October 2017, the Federal Supreme court dismissed BMW’s appeal against the ruling of the Federal Administrative court and confirmed the legality of the paid sanction of 156 million Swiss francs.

Do you operate a leniency programme? Whom should potential applicants contact? What discounts are available to companies that cooperate with cartel investigations?

Yes. The immunity and leniency programme is clarified by article 8 of the Cartel Act Sanctions Ordinance. Potential applicants should contact the director or deputy director of the Secretariat. A leniency application form and contact information are available on COMCO’s website at www.weko.admin.ch under Services. Since recently there exists also to possibility to place an e-marker under the same webpage.

In general, complete immunity is granted if an undertaking is the first to provide information that enables the opening of competition law proceedings concerning any unlawful restraint of competition (article 3 to 7 of the Cartel Act) or if it is the first to provide evidence that enables the establishment of an infringement of competition concerning horizontal and vertical agreements (article 5, paragraph 3 and 4 of the Cartel Act). Complete immunity is not granted if:

  • the undertaking has played the instigating or leading role;
  • it does not cooperate completely throughout the procedure; or
  • the authority already possesses sufficient evidence to prove the infringement of competition at the time of the voluntary report.

According to article 12 of the Cartel Act Sanctions Ordinance, a discount of up to 50 per cent is granted if the undertaking voluntarily cooperates in proceedings concerning any unlawful restraint of competition. If, in addition to this cooperation, the undertaking voluntary provides information or submits evidence on further infringements of competition concerning horizontal and vertical agreements (article 5, paragraphs 3 and 4 of the Cartel Act) a discount of up to 80 per cent is granted. The discount rates depend on the importance of the undertaking’s contribution to the success of the proceedings.

Is there a criminal enforcement track? If so, who is responsible for it? Does the authority conduct criminal investigations and prosecutions for cartel activity? If not, is there another authority in the country that does?

The authority does not conduct criminal investigations and prosecutions for cartel activity and there are no criminal sanctions for participating in unlawful restraints of competition. Chapter 5 of the Cartel Act deals with administrative criminal sanctions for violations of amicable settlements and administrative orders. The competence to impose administrative criminal sanctions lies with COMCO. The Secretariat is the investigative body for administrative criminal proceedings and can only open such an investigation when a member of the presidency of COMCO agrees with it. So far, there have been no decisions with regard to Chapter 5 Cartel Act.

No other authority conducts criminal investigations and prosecutions for cartel activity (see Chapter 5 of the Cartel Act).

Are there any plans to reform the competition law?

On 17 September 2014, parliament rejected the Amendment of the Cartel Act and of the Federal Act on the Organisation of the Competition Authorities. A few days later, on 25 September 2014, a member of parliament launched a parliamentary initiative to fight excessive import prices by amending the Cartel Act. The committees of the Council of States and the National Council have approved the parliamentary initiative. However, the proposal has been written off in September 2019 since the Federal Council has submitted a counterproposal to the so-called Fair Price Initiative (‘Put an end to Switzerland as an island of high prices – For fair prices’; see next paragraph). There are several further parliamentary proposals for the revision of specific points in the Cartel Act that are still pending.

In December 2017, the so-called Fair Price Initiative was submitted to the Federal Chancellery. It aims to introduce concept of relative market power into the Cartel Act, but only with regards to preventing misconduct by companies in cross-border competition. The Federal Council drafted an indirect counter-proposal to this initiative. It opened the related consultation procedure in August 2018. In March 2020, the National Council rejected the initiative, but hdecided to write the initiative’s calls directly into the law (an initiative calls for a change of the constitution). The Council of States will discuss the affair in winter 2020 at the earliest.

Furthermore, the Federal Council has instructed the EAER to prepare a bill on the modernisation of merger control procedures under the Cartel Act. The Secretariat participates in this work.

When did the last review of the law occur?

In 2003, entering into force in 2004.

Do you have a separate economics team? If so, please give details.

Yes, the Competence Centre for Economics.

Has the authority conducted a dawn raid?

Yes. In 2019, the authority conducted four dawn raids

Have the authority imposed penalties on officers or directors of companies for offences committed by the company? If yes, please provide the most recent instances.

No.

What are the pre-merger notification thresholds, if any, for the buyer and seller involved in a merger?

According to article 9, paragraph 1 of the Cartel Act, there are two conditions that must be fulfilled at the same time such that a merger has to be announced to the authority:

  • together, the undertakings concerned must have reported a turnover of at least 2 billion Swiss francs in the financial year preceding the concentration, or a turnover in Switzerland of at least 500 million Swiss francs; and
  • at least two of the undertakings concerned must have reported a turnover in Switzerland of at least 100 million Swiss francs each.

Special rules apply for banks, where the relevant threshold is defined by its gross income; and for insurances, where it is defined by annual gross insurance premium income (see article 9, paragraph 3 of the Cartel Act).

Furthermore, there are no thresholds (notification is mandatory) if one of the undertakings concerned has been held, in a final and non-appealable decision, to be dominant in a market in Switzerland in proceedings under the Cartel Act. As an additional requirement, the concentration has to concern either that market or an adjacent market or a market upstream or downstream thereof (see article 9, paragraph 4 of the Cartel Act).

Are there any restrictions on investments that involve less than a majority stake in the business?

Minority investments without acquisition of control do not need to be notified in Switzerland.

Article 4, paragraph 3 of the Cartel Act deals with the definition of a concentration of undertakings. It is defined either by a merger of two or more previously independent undertakings or by a transaction, by which one or more undertakings acquire direct or indirect control of one or more previously independent undertakings or parts thereof. Furthermore, according to article 1 of the Merger Control Ordinance, the acquisition of control is defined by the ability to exercise a decisive influence over the activities of the other undertaking, or parts of another undertaking, by the acquisition of rights over shares or by any other means. Thus, the fact that an undertaking takes control (together with the revenue thresholds that must be met) triggers the notification requirement, and not a defined threshold with regards to percentages of shares held by the undertaking.

Economists

How many economists do you employ?

By the end of January 2020: 19.

Do you have a separate economics unit?

There is no separate economics unit. Two economists, including the chief economist, directly report to the director. All other economists belong to one of the four divisions in the Secretariat of the Competition Commission. Each of those divisions deals with specific markets.

Do you have a chief economist?

Yes, Dr Niklaus Wallimann.

To whom does the chief economist report?

The chief economist reports to the director of the Secretariat of the Competition Commission.

Does the chief economist have the power to hire his or her own staff?

No.

How many of your economists have a PhD in industrial economics?

PhD in economics (in general, including but not necessarily in the field of industrial organisation): 13.

Does the agency include a specialist economist on every case team? If not, why not?

Typically, all case teams include at least one economist.

Is the economics unit a ‘second pair of eyes’ during cases – is it one of the agency’s checks and balances? If not, why not?

Work carried out by the divisions is checked by the staff of the director, and thus also by the chief economist prior to being sent to the Competition Commission or third parties. The chief economist reports directly to the director. If the chief economist considers it necessary, he can also consult with members of his or her core team (typically on economist of each division)or the Economics Competence Centre, which comprises all economists working at the Secretariat of the Competition Commission.

How much economics work is outsourced? What type of work is outsourced?

In general, no economics work is outsourced. Exceptions are possible when special expertise is required.

Organisation chart

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