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Federal act on Cartels and Other
Restraints of Competition of October 6, 1995.
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Ordinance regarding the Sanctions for
Unlawful Restrictions of Competition of March 12, 2004.
Related publication:
Swiss Cartel Law
Introduction
With the introduction of the Cartel Act 1995, by adapting substantial parts of
the substantive law provisions to the EU rules, Swiss competition law had made
an important step towards a modern antitrust law. As a result, the Swiss
competition authority, the Competition Commission ("CC"), became for the first
time competent to fully assess unlawful agreements, and unlawful practices of
enterprises having a dominant position as well as concentrations of enterprises
(mergers). However, there were still deficiencies: The Cartel Act 1995 did not
vest the CC with the power to order so-called "direct sanctions" against
companies that did not comply with the Cartel Act. It was the main purpose of
the 2003 reform to correct this deficiency. Hence, as of April 1, 2004, the CC
is empowered to impose substantial fines on private parties for certain acts
restraining competition (i.e. hard-core cartels, certain vertical restraints and
abuse of a dominant position).
Direct Sanctions (Fines)
The new article 49a of the Cartel Act 2003 and the Ordinance regarding the
Sanctions for Unlawful Restrictions of Competition forms the legal basis for the
direct sanctions (including fines). As mentioned, the following behavior can be
sanctioned by the CC:
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horizontal hard-core cartels, i.e.,
agreements (incl. coordinated behavior) relating to prices, quantity of goods or
allocation of territories;
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certain harmful vertical restraints,
i.e., agreements about fixed prices, minimal prices or exclusive allocation of
territories;
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the abuse of a dominant market
position.
The CC is authorized to impose fines that can amount up to 10% of the
aggregate annual turnover which the company involved has realized in the
relevant Swiss market during the past three financial years. The duration of the
infringement, aggravating circumstances (such as repeated violations of law,
high profits, incitement of other undertakings et al.) and mitigating
circumstances (such as passive behavior, immediate termination et al.) may have
an effect when assessing the amount of the fine. For unlawful restraints of
competition other than the ones listed above, the provisions of the Cartel Act
1995 remain applicable, i.e., the CC cannot directly sanction infringements but
may only impose fines when parties are not complying with earlier decisions of
the CC forbidding certain restraining acts of the relevant parties.
Notifications and Leniency Program
During the first year of the new Act being in force, provisional regulations
apply, i.e. until March 31, 2005, companies are allowed to report existing
restraints of competition to the Secretariat of the CC thereby avoiding the risk
to be fined. For unlawful restraints dissolved or abandoned prior to March 31,
2005, whether following a recommendation by the CC or not, no fines can be
imposed.
After March 31, 2005 restrictions of competition, which are considered to be
lawful by the companies involved, may be notified to the CC before these
restrictions have entered into effect (article 49a para. 3 lit. a Cartel Act).
Unless an investigation is started by the CC within five months from such
notification, no sanctions may be imposed with regard to the notified agreements
or practices. The new Cartel Act also provides for a leniency program enabling
the companies to avoid sanctions or reduce the amount of fines imposed. Pursuant
to article 49a para. 2 Cartel Act, the CC has the power not to impose a sanction
or reduce it considerably where a cartel member informs the CC ("whistle-blower")
and cooperates in the investigation and in the elimination of an illegal
restraint of competition. For the other members of the cartel the sanctions may
be reduced up to 50%, provided they actively cooperate and support the CC in the
investigation proceedings.
Vertical
Restraints
An important element of the new Cartel Act is
article 5 paragraph 4. The provision contains a catalogue of acts which are
legally presumed to eliminate competition (and therefore being illegal). While
the old legislation had listed only horizontal hard-core cartels, the new Act
adds the following vertical restraints:
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agreements between enterprises at
different levels in the market regarding fixed or minimum prices;
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clauses in distribution contracts (or
a number of identical contracts) regarding the allocation of territories in so
far as sales by other distributors into these territories are not permitted at
all (prohibition of passive sales).
Other changes
Article 6 Cartel Act which contains categories of agreements deemed to be
justified by the reason of economic efficiency (even if they led to a violation
of article 5 Cartel Act), was amended by a provision relating to agreements
among small and medium-sized enterprises (SMEs) with the purpose of improving
their competitiveness, provided that these agreements have only a limited effect
on the market.
The new Act furthermore abolished reduced threshold (factor 20 of the actual
sales turnover) triggering the obligation to notify a merger or acquisition,
which was applicable for the media industry.
Frequently
Asked Questions I am not sure if my company is committing a
relevant competition restraint in terms of the Cartel Act. What shall I do?
It is advisable to consult a lawyer specialized in antitrust law. The specialist
should be in a position to make a first assessment of the presented facts and
documents, if any, and identify critical areas within the organization and
business processes, and give you advice with regard to the next steps to be
taken.
Is it urgent to take precautions now?
If there is a certain risk of
unlawful behavior in the undertaking, it is advisable to act early, since, for
unlawful restraints of competition which are notified (or abandoned) prior to
March 31, 2005, no fines can be imposed.
What can happen to my company if it breaches the Cartel Act?
The CC can
start investigations, and in the worst case, come to the conclusion that a
company is in violation of one of those provisions and impose direct sanctions.
What can happen to me personally as person in charge, if the Swiss
Competition Commission recovers an unlawful restraint against competition in my
company?
The Cartel Act does not provide for a personal liability for officers in charge.
Nevertheless, such liability can arise from other provisions such as the
provision on the responsibility of members of the Board of Directors of the
Swiss Code of Obligations (art. 752 et seq. CO). Furthermore, the intentional
breach of a legally enforceable decision of the CC is a criminal offence subject
to a fine up to CHF 100'000.--.
www.weko.admin.ch
(Swiss Competition Commission)
Literature:
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WALTER STOFFEL/ROGER ZÄCH,
Kartellgesetzrevision 2003 – Neuerungen und Folgen, Zürich 2004
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PHILIPP ZURKINDEN/HANS RUDOLF TRÜEB,
Das neue Kartellgesetz, Handkommentar, Zürich 2004 (including English
translation of Cartel Act)
April 2006 | 
