RESTRICTED
WORLD TRADE WT/WGTCP/W/29
15September 1997
ORGANIZATION(97-3675)
Original: English Working Group ontheInteraction
between Trade andCompetition Policy
COMMUNICATION FROM SWITZERLAND
Thefollowing communication, dated 10September 1997, hasbeenreceived fromthePermanent
Mission ofSwitzerland withtherequest thatitbecirculated toMembers.
_______________
SYNOPSIS OFTHE SWISS ANTITRUST LAW
Asdecided atthefirstWorking Party ontheInteraction between trade andcompetition policy
inJuly,thenextmeeting willfocus ontheexisting instruments, standards andactivities regarding trade
andcompetition policy, including national competition policies, lawsandinstruments. Atthelast
WTO-TPR examination in1996, Switzerland already mentioned theadoption ofitsnewAntitrust Law.
TheFederal ActonCartels andOther Restraints ofCompetition (Act), adopted on6October 1995
andentered intoforce on1July1996, replaces theformer law.
Being desirous ofcontributing tothestocktaking ofexisting instruments regarding competition
policies, Switzerland submits hereby afirstsynopsis ofitsnational antitrust law1which marks aturn
fromamore cartel-friendly Swiss antitrust legislation toaclearly competition-minded antitrust policy.
Themajor characteristics oftheSwiss Antitrust Actcanbesummarized asfollows:
1. Basic Principle
TheActisbased ontheabuse principle.
2. Scope
TheActapplies toprivate orpublic enterprises thatareparty tocartels ortoother agreements
affecting competition, havemarket power ortakepartinconcentrations ofenterprises. Itapplies to
restrictive practices whose effects arefeltinSwitzerland, eveniftheyoriginate inanother country.
Itdoesnotapply toeffects oncompetition thatresult exclusively from lawsgoverning intellectual
property. TheActisneither applicable toactions ofenterprises inaccordance withlegalprovisions
thatdonotallow competition inamarket forcertain goods orservices. Thisconcerns, inparticular,
provisions which establish anofficial market orprice system orprovisions which entrust certain
enterprises withtheperformance ofpublic interest tasks, granting them special rights.
1Following documents canbeobtained from theSwiss delegation:
(1) TheFederal ActonCartels andOther Restraints ofCompetition (Act);
(2) Message tothenewantitrust law;
(3) OCDE/CLP, Annual Report onCompetition Policy inSwitzerland (1996-1st semester 1997).WT/WGTCP/W/29
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3. Substantive Provisions
3.1 Agreements restraining competition
Agreements thatsignificantly affect competition inaspecific market areunlawful. Ifsuch
agreements donotcompletely prevent competition, theymay,however, bepermitted bythecompetition
authority iftheyincrease economic efficiency. TheAct,inparticular, mentions agreements which
allow theparties todecrease production ordistribution costs, toimprove thequality ofproducts, to
intensify research anddevelopment ortoeconomize resources. Under theActittherefore willstill
bepossible toenter intoproduction andresearch jointventures aswellasintoexclusive license or
distributorship agreements. TheFederal Council mayissue ordinances defining which agreements
generally benefit from theexception. Sofar,there hasnotbeenanysuchordinance issued.
Furthermore, theActquotes several agreements among actual orpotential competitors that
arepresumed toleadtotheelimination ofeffective competition andthataretherefore unlawful. Such
agreements areprice-fixing agreements, agreements restricting thequantities ofgoods orservices to
beproduced,boughtorsupplied,oragreementsallocatingmarketsgeographicallyoraccordingtotrading
partners. Thispresumption, however, isrefutable.
Finally, theFederal Council mayexceptionally allow agreements which prevent competition
orrestrain competition without increasing economic efficiency andwhose unlawfulness hasbeen
ascertained bythecompetent authority ifsuchagreements arenecessary toprotect overriding public
interests.
3.2 Enterprises withadominant position
Practices ofenterprises having adominant position aredeemed unlawful when suchenterprises,
through theabuse oftheirposition, prevent other enterprises fromentering orcompeting inthemarket
orwhen theyinjure trading partners. Suchpractices are,forexample, refusal todeal,discrimination
between trading partners withregard toprices orother conditions oftrade, ortheimposition ofunfair
prices orother unfair conditions oftrade.
Practices ofdominant enterprises which havebeendeclared asunlawful bythecompetent
authority mayhowever exceptionally beallowed bytheFederal Council inorder toprotect overriding
public interests.
3.3 Merger control
TheActintroduces merger control rules similar tothose oftheEuropean Union. The
Competition Commission mustbenotified ofconcentrations ofenterprises before theyarecarried out
when, inthelastaccounting period prior totheconcentration: (a)theenterprises concerned reported
ajointturnover ofatleastSwF2billion oraturnover inSwitzerland ofatleastSwF500million;
and(b)atleasttwooftheenterprises concerned reported anindividual turnover inSwitzerland ofat
leastSwF100million. Inaddition, theActquotes specific provisions onmedia enterprises, insurance
companies andbanks.
Notwithstanding theabove-mentioned cases, notification ismandatory when, ontermination
ofaformer procedure initiated pursuant totheAct,adecision wastaken establishing thataparticipating
enterprise occupies adominant position inamarket inSwitzerland, andwhen theconcentration concerns
either thatmarket oranadjacent market oramarket upstream ordownstream.WT/WGTCP/W/29
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Thereservation oftheapproval bytheFederal Council ongrounds ofoverriding public interests
applies alsoonmergers.
4. Procedural Provisions
4.1 Administrative procedure
Under theAct,theSecretariat oftheCompetition Commission, inthecaseofagreements or
practices ofenterprises having adominant position, mayconduct preliminary investigations onitsown
initiative, attherequest ofenterprises concerned oroninformation received from third parties. If
signsofanunlawfulrestraintofcompetitionexist,theSecretariatopensaninvestigation,withtheconsent
ofamember oftheCommission 'spresiding body. Ithastoopenaninvestigation inallevents ifasked
todosobytheCommission orbytheFederal Department ofPublic Economy. After thetermination
ofaninvestigation inwhich theunlawfulness oftherestraint ofcompetition hasbeen stated, the
Commission, onaproposal from theSecretariat, takes itsdecision onmeasures tobetaken oron
approval ofanamicable settlement. Totheprocedure before theSecretariat respectively theCommission
theFederal ActonAdministrative Procedure applies, insofar astheActdoesnotprovide otherwise.
Accordingly, itgrants, intheinvestigation stage, theparties fullaccess toalldocuments filedandto
thehearings ofwitnesses, without prejudice tothesafeguarding ofmanufacturing andbusiness secrets.
Theprocedure inmerger cases intheActisdifferent, from theprocedure justexplained, andvery
similar totheoneintheEuropean Union.
4.2 Civil procedure
Aperson whose ability tocompete isimpeded byunlawful agreements orbyunlawful practices
ofadominant enterprise mayfilealawsuitincivilcourts andrequest: (a)removal orcessation of
theobstacle; (b)damages andreparations inaccordance withtheSwiss codeofobligations, orremittance
ofillicitly-earned profits inaccordance withtheprovisions onconducting business without amandate.
4.3 Administrative andcriminal sanctions andpenalties
Accordingtotheabuseprinciple,theActdoesnotprovideforcriminalsanctionsoradministrative
penalties against parties which engage inanti-competitive actions. Administrative aswellascriminal
penalties are,however, imposed when anenterprise respectively aperson contravenes anamicable
settlement, adecision ofthecompetition authorities stating theunlawfulness ofarestraint ofcompetition
orprocedural duties. Penalties arealsoimposed ifaconcentration iscarried outwithout giving due
notice thereof orifother duties related toconcentrations ofenterprises areviolated. Administrative
penalties relating toviolations ofamicable settlements orlegally enforceable decisions concerning
agreements orpractices ofdominant enterprises mayattain anamount being asmuch asthree times
theprofit made asaresult ofnon-compliance. Ifsuchprofit cannot becalculated orestimated, the
amount maybeasmuch as10%oftheenterprise 'smostrecent turnover inSwitzerland. Inthecase
ofnon-compliance related toaconcentration ofenterprises theadministrative penalty isofatmost
SwF1million. Should anenterprise repeat itsfailure tocomply withacondition attached tothe
authorization ofaconcentration, itshallberequired topayanamount of10%atmostofthetotalrevenue
inSwitzerland ofalltheenterprises taking part.
4.4 Other tasks oftheCompetition Commission
Inaddition, theActauthorizes theCompetition Commission toobserve thedevelopment of
themarket andtogiveitsopinion onplanned actsanddecrees.