All questions

Introduction

Merger control in Switzerland is governed primarily by the Federal Act on Cartels and Other Restraints of Competition (CartA) and the Merger Control Ordinance (see also Section III). These competition regulations came into force on 1 July 1996 and were first revised in 2003.

Concentrations are assessed by the Competition Commission,2 an independent federal authority based in Berne that consists of up to 15 members. There are currently 12 members, who were nominated by the federal government, the majority of whom are independent experts (i.e., law or economics professors). Deputies of business associations and consumer organisations take the other seats. Cases are prepared and processed by the Secretariat of the Competition Commission (with a current staff of 76 full-time and part-time employees, mostly made up of lawyers and economists). It is organised under four divisions: product markets, services, infrastructure and construction. A resources division is in charge of administrative and technical tasks within the Secretariat of the Competition Commission.

The types of transactions that are subject to merger control are mergers of two or more previously independent undertakings and direct or indirect acquisitions of control by one or more undertakings over one or more previously independent undertakings or parts thereof. Joint ventures are also subject to merger control if the joint venture exercises all the functions of an independent business entity on a lasting basis. If a joint venture is newly established, it is subject to merger control if, in addition to the above criteria, the business activities of at least one of the controlling shareholders are transferred to it.

Pursuant to Article 9 of the CartA, pre-merger notification and approval are required if two turnover thresholds are reached cumulatively in the previous business year before the concentration as follows:

  1. the undertakings concerned have reported a worldwide aggregate turnover of at least 2 billion Swiss francs or an aggregate turnover in Switzerland of at least 500 million Swiss francs; and
  2. at least two of the undertakings concerned have reported individual turnovers in Switzerland of at least 100 million Swiss francs.

These thresholds are considered to be relatively high in comparison with international standards. A particularity of the Swiss regime is that, if the Competition Commission has previously issued a legally binding decision stating that an undertaking holds a dominant position in a particular market, such an undertaking will have to notify all of its concentrations, regardless of the turnover thresholds, provided that the concentration concerns that particular market or an upstream, downstream or neighbouring market (Article 9(4) of the CartA). In 2020, the Federal Administrative Court confirmed the Competition Commission's view that the proximity requirement to such other markets must be interpreted in a broad manner (see Section II). According to Article 4(2) of the CartA, an undertaking is considered to hold a dominant position if it is 'able, as regards supply and demand, to behave in a substantially independent manner with regard to the other participants in the market (competitors, suppliers, buyers)'.

If the thresholds are met, or, as explained above, in the case of a dominant undertaking, the concentration must be notified to the Competition Commission before its implementation. If a concentration is implemented without notification or before clearance by the Competition Commission (or if the remedies imposed are not fulfilled), the companies involved may be fined up to 1 million Swiss francs. Members of the management may also be fined up to 20,000 Swiss francs. To date, the Competition Commission has imposed several fines on companies for failure to notify, but there have been no criminal sanctions (fines) on members of management.

Furthermore, the Competition Commission may order the parties to reinstate effective competition by, for instance, unwinding the transaction.

The CartA does not stipulate any exemptions to the notification requirements. However, if the Competition Commission has prohibited a concentration, the parties may in exceptional cases seek approval from the federal government if it can be demonstrated that the concentration is necessary for compelling public interest reasons. Such approval, however, has not been granted so far.

Specific rules apply to certain sectors. Thus, a concentration in the banking sector may be subject to a review by the Swiss Financial Market Supervisory Authority, which may take over a case involving banking institutions subject to the Federal Law on Banks and Saving Banks and authorise or refuse such a concentration for reasons of creditors' protection alone, irrespective of the competition issues. If the parties involved in a concentration hold special concessions (e.g., radio, television, telecommunications, rail or air transport), a special authorisation by the sector-specific regulator may be required. Moreover, under the Federal Law on the Acquisition of Real Estate by Foreign Persons, for any concentration involving a foreign undertaking and a Swiss real estate company holding a portfolio of residential properties in Switzerland, the approval of the competent cantonal or local authorities may also be necessary.

The Swiss merger control regime features a very high standard of assessment compared with other jurisdictions; this is sometimes called the dominance-plus test or the qualified dominance test. Pursuant to Article 10 of the CartA, the Competition Commission may prohibit a concentration or authorise it subject to conditions and obligations if the investigation indicates that the concentration:

  1. creates or strengthens a dominant position;
  2. is capable of eliminating effective competition; and
  3. causes harmful effects that cannot be outweighed by any improvement in competition in another market.

In two decisions issued in 2007, Swissgrid and Berner Zeitung AG/20 Minuten (Schweiz) AG, the Swiss Supreme Court had to determine whether a concentration could be prohibited if there were a mere creation or strengthening of a dominant position or whether conditions (a) and (b) (i.e., creation or strengthening of a dominant position and elimination of effective competition) were cumulative. This question has significant practical consequences because, if the two conditions are cumulative, then a concentration must be authorised, even if a dominant position is created or strengthened, if it cannot be established that the concentration will eliminate (or is capable of eliminating) effective competition. In the Swissgrid case, the Swiss Supreme Court held that conditions (a) and (b) were cumulative. The reasoning followed by the Supreme Court was that merger control is part of the control of market structure. Therefore, to justify an administrative intervention, the concentration must result in a concrete negative change in the market structure and the competition must be altered. In this case, the Court found that competition did not exist prior to the concentration. Accordingly, the concentration would not change the market conditions and the administrative intervention was not justified. In some cases (notably the Tamedia/PPSR (Edipresse) case from 2009), the Competition Commission examined whether the concentration could eliminate effective competition, but in a way that might indicate that it is in fact reluctant to give an autonomous scope to that criterion. In practice, the efficiency gains provided in condition (c) have only very recently started playing a role. In the Gateway Basel North joint venture case from 2019, the Commission undertook an in-depth assessment of condition (c) (i.e., whether harmful effects of a concentration in a certain market were outweighed by an improvement in competition in another market). The Commission found that the establishment of Gateway Basel North, Switzerland's first large-scale terminal with a gateway function, eliminated effective competition for the handling of containers, swap bodies, and semi-trailers in import and export traffic, primarily with regard to the turnover of goods transported by rail and ship-to-rail trans-shipment. However, in its assessment, the Commission found that the terminal was also expected to produce substantial economies of scale in intermodal transport and increase competition in the import and export rail transport. The Commission concluded that these advantages outweighed the negative impact in the area of cargo handling and thus approved the concentration.

The threshold for intervention by the Competition Commission based on single dominance depends largely on the significance of the market shares of the merging entities, whereas the intervention in the case of lower market shares may be possible based on the theory of harm of collective dominance. By way of example, in the Sunrise/UPC case from 2019, the Competition Commission examined a planned takeover of UPC (Liberty Global) by Sunrise. With the merger, Sunrise would have become the second-largest telecommunications company in Switzerland after incumbent Swisscom by offering – as does Swisscom – fixed network, broadband internet and mobile telephony services as well as digital television on its own infrastructure in Switzerland. The in-depth investigation focused on the likelihood of the creation of joint dominance of the new Sunrise and Swisscom. However, the Commission concluded that the acquisition would not lead to a collective dominance of Sunrise and Swisscom and that coordination between the companies was unlikely because UPC and Sunrise on one hand and Swisscom on the other were positioned differently. As a result, the merger was not considered to lead to the creation or consolidation of a dominant position in any of the markets analysed and was therefore approved by the Commission. The deal was later cancelled due to a lack of Sunrise shareholder backing.3

Year in review

The statistics in the Competition Commission's 2021 Annual Report showed that M&A activity continued to slow down compared with the previous two years. This trend is the result of the significant deterioration of the economic and market conditions caused by the coronavirus pandemic.4 The Commission received 31 merger notifications (compared with 35 in 2020 and 40 in 2019), all of which were granted clearance with no conditions or additional requirements and were cleared in Phase I without an in-depth examination (i.e., Phase II).

The most notable concentrations approved in 2021 were in the media, healthcare services and agriculture sectors.

In the media sector, the Competition Commission had to assess the mergers of TX Group (formerly Tamedia) with Acheter-Louer.ch and TX Group with Immowelt Schweiz. The analysis of the two concentrations did not result in an indication of the establishment or strengthening of a dominant position. The Competition Commission concluded that, in the market for (print and online) real estate advertisements in the German- and Italian-speaking parts of Switzerland, the parties to the concentration had high market shares compared with their competitors. However, the combined market share of the merging parties was just below the threshold of 50 per cent, and the market share of the TX Group had decreased, whereas competitors also had a strong market position. In addition, the Competition Commission also cleared the concentration between Aventinus and Heidi Media in Phase I.

Furthermore, the Federal Supreme Court had to assess an appeal by Tamedia against an order to pay a lump sum of 5,000 Swiss francs for the Competition Commission's Phase I investigation (see Section IV) of the merger between Tamedia (now the TX Group) and Adextra. As mentioned in Section I, an undertaking holding a dominant position in a particular market is obliged to notify all of its concentrations, regardless of the turnover thresholds, if the concentration concerns that particular market or an upstream, downstream or neighbouring market. When submitting the notification of the concentration in 2016, the parties had stated that, in their view, there was no obligation to notify and thus also no scope for a preliminary examination of the merger. In its decision, the Competition Commission came to the conclusion that the requirements for an in-depth assessment (Phase II) were not met and therefore there were no objections to the concentration. The parties then refused to pay the fee for the preliminary examination as they were of the opinion that it should not have been carried out, because of the lack of a notification obligation, and filed an appeal with the Federal Administrative Court. The Federal Administrative Court rejected the appeal in October 2020 and confirmed the Competition Commission's view that the proximity requirement between the dominated market and a concerned upstream, downstream or neighbouring market must be interpreted in a very broad manner. According to the Competition Commission, it is not a requirement that the affected markets are directly upstream, downstream or neighbouring but rather sufficient that competitive effects of the dominant position on such other markets cannot be ruled out from the outset. On appeal by Tamedia, the Federal Supreme Court did not further consider the question of whether there was an obligation to notify the transaction but stated in its decision of 23 September 2021 that filing a notification automatically led to the opening of a preliminary examination irrespective of whether or not there was actually an obligation to notify.

In the healthcare sector, the Competition Commission approved the establishment of Well Gesundheit AG, a joint venture of two healthcare insurance companies (CSS and Visana) as well as the mail order pharmacy Zur Rose and the telemedicine company medi24. The parties intend to develop a digital health platform focusing on the brokerage of various healthcare services to patients. The parties' market definition in the notification was based, in particular, on the assumption that patients, service providers (such as hospitals and doctors) and health insurers would all equally form the decisive demand group for the market definition. Although the Competition Commission left the exact market definition open, it held that the services offered by the platform will primarily be used if they are covered by a special insurance model that provides for such use. Accordingly, in the view of the competition authorities, the choice of health insurers and the insurance model will in most cases determine the e-health platform to be used. In summary, the competition authorities came to the conclusion that the different e-health platforms are still primarily competing for the favour of the health insurers and that thus the health insurers were the decisive demand group according to which the relevant market has to be defined. Because neither the parties nor the joint venture had significant market shares in the area of e-health platforms, the Competition Commission did not object to the transaction.

The concentration between Swissgenetics and New Generation Genetics in the agriculture sector relating to bull semen also received clearance by the authorities. As the merger had not been notified in accordance with Article 9(4) of the CartA (see Section I), in September 2021, the Secretariat of the Competition Commission opened an administrative penalty procedure based on Article 51 of the CartA. According to Article 51 of the CartA, any undertaking that implements a notifiable concentration without filing a notification can be fined up to 1 million Swiss francs. For the calculation of the fine, the Competition Commission takes the following criteria, among others, into consideration: (1) the position of the involved companies on the affected market(s); (2) the potential threat of the concentration to competition, such risk being deemed to exist if the combined market share exceeds 20 per cent or if the market share of one of the parties exceeds 30 per cent on one of the relevant markets; and (3) the possibility that effective competition could be eliminated because of the concentration.

The merger control regime

If the turnover thresholds are reached by the undertakings concerned or if the concentration involves a company holding an established dominant position and takes place in a related market, the filing of a merger notification is mandatory before the implementation of the concentration. Under Swiss law, there are no deadlines for filing. A transaction can be notified before the signing of the final agreements. However, the parties must demonstrate a good faith intention to enter into a binding agreement and complete the transaction (in practice, the standard is similar to that of the European Commission). The Secretariat of the Competition Commission can be contacted on an informal basis before the notification. Such a course of action can streamline the notification procedure. For example, the Secretariat can agree to waive some legal requirements in relation to the contents of the notification or confirm completeness of the notification prior to the official filing of the notification. Furthermore, parties often contact the Secretariat for a preliminary assessment of the question of whether or not a given transaction is subject to notification.

In the case of a merger, the notification must be made jointly by the merging undertakings. If the transaction is an acquisition of control, the undertaking acquiring control is responsible for the filing. The filing fee for a Phase I investigation is a lump sum of 5,000 Swiss francs. However, if the assessment of a draft notification involves a large amount of work, the Secretariat may invoice this work as billable advisory activity. In Phase II investigations, the Secretariat of the Competition Commission charges an hourly rate of 100 Swiss francs to 400 Swiss francs.

Once the notification form is filed and the Competition Commission considers the filing complete, it will conduct a preliminary assessment (Phase I) and will have to decide within one month of the date of the filing whether there is a need to open an in-depth investigation (Phase II). If the Competition Commission decides to launch an in-depth investigation, it will have to complete it within four months. As regards the internal organisation, under its internal rules of procedure, the Competition Commission has created a Chamber for merger control, which has been granted the power to decide whether a detailed examination (Phase II) should be conducted and whether the merger can be implemented ahead of the regular schedule. However, the Competition Commission retains a certain residual power in the preliminary assessment, in that it will be informed of the Chamber's decision and may conduct an investigation independent of that of the Chamber (and, as the case may be, overrule the Chamber's decision). The Commission can also delegate other tasks to the Chamber if practical considerations dictate that as appropriate. Pursuant to the internal rules of procedure (in force since 1 November 2015), Andreas Heinemann (president), Armin Schmutzler and Danièle Wüthrich-Meyer (both vice presidents of the Competition Commission) have been appointed as members of the Chamber for merger control.

As a rule, the implementation of a concentration should not take place before the competition authorities' clearance. However, in specific cases, the authorities may allow an implementation to happen before clearance if it is for compelling reasons. This exception has been used mainly in cases of failing companies and, more recently, in the case of a pending public takeover bid (see Section IV). Contrary to the European merger control rules,5 no exception for public bids is provided under Swiss law. Therefore, each case is to be assessed individually. In the Schaeffler/Continental case (in which Schaeffler and Continental eventually agreed on the conditions of a public takeover), the Competition Commission decided that a request for an early implementation of a concentration can be granted before the notification is submitted if the following three conditions are fulfilled:

  1. the Competition Commission must be informed adequately about the concentration;
  2. specific reasons must be provided explaining why the notification cannot be submitted at that time; and
  3. if, after the Commission's review, the concentration is not allowed, a potential cancellation of the transaction must be assessed.

In that particular case, those conditions were fulfilled. However, the Competition Commission imposed two additional conditions: the obligation not to exercise the voting rights except to conserve the full value of the investment and the obligation to submit a full notification within a relatively short period of time.

In practice, the one-month period for the Phase I investigation can be shortened in less complex filings, especially if a draft filing was submitted to the Secretariat of the Competition Commission for review before the formal notification.

If the Competition Commission decides to launch a Phase II investigation, it has to publish its decision. It will then send questionnaires to the parties, as well as their competitors, suppliers and clients. Usually, a Phase II hearing with the parties takes place. If the parties propose remedies, close contact is established between the Secretariat of the Competition Commission and the undertakings involved to determine the scope of such remedies. Ultimately, however, the authority to impose remedies lies with the Competition Commission, which enjoys a wide power of discretion (subject to compliance with the principle of proportionality).

Third parties have no formal procedural rights at any point in the procedure. If the Competition Commission opens a Phase II procedure, it will publish basic information about the concentration and allow third parties to state their position in writing within a predetermined deadline. The Competition Commission, however, is not bound by third-party opinions or by the answers to the questionnaires. Third parties have no access to documents and no right to be heard. Moreover, the Swiss Supreme Court has held that third parties are not entitled to any remedy against a decision of the Competition Commission to permit or prohibit a given concentration.

A decision of the Competition Commission may be appealed before the Federal Administrative Tribunal within 30 days and, ultimately, before the Swiss Supreme Court. The duration of an appeal procedure varies but may exceed one year at each stage.

The Secretariat of the Competition Commission has published a communication on the notification and assessment practice regarding merger control.6 The Merger Control Communication first clarifies in Section I, Paragraph 4 the concept of 'effect' in the Swiss market in the case of a joint venture. Article 2 of the CartA provides that the CartA 'applies to practices that have an effect in Switzerland'. Up until the time when the Merger Control Communication was issued, the Competition Commission and the Swiss courts held that each time the turnover thresholds set forth in Article 9 of the CartA were reached, the concentration would be considered to have an effect on the Swiss market. Thus, if a joint venture with no activity in Switzerland were created in which the turnover thresholds were met by the parent companies, a notification would be required (see, for example, the Merial decision of the Swiss Supreme Court of 24 April 2001). However, in the Merger Control Communication, the Competition Commission takes a different approach: if the joint venture is not active in Switzerland (i.e., no activity or turnover in Switzerland; in particular, no deliveries into Switzerland) and does not plan to be active in Switzerland in the future, then the creation of this joint venture is not considered to have any effect in Switzerland and accordingly no notification is required, even if the turnover thresholds are met by the parent companies. In the Axel Springer/Ringier case (of May 2010), Ringier AG and Axel Springer AG formed a joint venture in Switzerland in which they concentrated all the printed and electronic media activities they had in Eastern European countries. In light of the criteria set out in the Merger Control Communication, the Competition Commission took the view that the joint venture was subject to Swiss merger control because some of the entities concentrated in it had achieved a turnover in Switzerland in the year preceding the concentration, whereas others had made deliveries into Switzerland.

In the context of a recent consultation request to the Secretariat of the Competition Commission, the Secretariat interpreted in a narrow manner the exception from the notification obligation for joint ventures as stated in Section I, Paragraph 4 of the Merger Control Communication. In its consultation statement, the Secretariat of the Competition Commission took the position that the exception applied in the first place only if the joint venture's activities were clearly unrelated to competition in Switzerland and that to prevent merger projects with a potential impact on the Swiss market from not even being examined, Section I of the Merger Control Communication should not be applied in a schematic manner. Instead, all circumstances of the individual case should be taken into account, whereby in case of doubt a notification obligation is to be assumed.

Another jurisdictional issue dealt with by the Merger Control Communication generalises the position taken by the Competition Commission in its Tamedia/PPSR (Edipresse) decision dated 17 September 2009. In this case, the deal was structured into three phases over a period of three years, with a shift from joint to sole control by Tamedia over that period. The Competition Commission decided (and later held in the Merger Control Communication) that the deal could be regarded as a single concentration only if the three following conditions were met:

  1. constitution of joint control during a transition period;
  2. a shift from joint control to sole control concluded in a binding agreement; and
  3. a maximum transition period of one year.

Until that decision, the Competition Commission considered that a transition period of up to three years was acceptable to analyse a case as a single concentration. However, to align its practice with that of the European Commission in its Jurisdictional Notice of 10 July 2007, the Competition Commission decided to reduce the transition period to one year.

On a related topic, in an informal consultation in 2017, the Secretariat of the Competition Commission provided a clarification on a series of transactions, whereby the first transaction would lead to the sole acquisition of a target by one undertaking and a subsequent transaction to the acquisition of joint control over the same target by several undertakings (including the undertaking that acquired sole control in the first place). The Secretariat of the Competition Commission held that only the second transaction would trigger the duty to notify, provided that the individual transactions were dependent on each other and together formed a single operation.

The Merger Control Communication also addresses the subject of the geographical allocation of turnovers. In general, the test for geographical allocation of the turnover is the contractual delivery place of a product (place of performance) and, respectively, the place where the competition with other alternative suppliers takes place. The billing address is not relevant. Special rules apply to the calculation of turnovers based on the provision of services.

The Merger Control Communication further clarifies the examination criteria and the notification requirements for markets affected by concentrations in which only one of the participants operates but has a market share of 30 per cent or more.7 The issue is the extent to which the other companies involved in the concentration may be categorised as potential competitors. Once again, the Competition Commission has aligned its practice in this regard with the practice in the EU. In general, a detailed description of such markets in the context of the merger control notification is required only if one of the following additional conditions is met: if another undertaking involved plans to enter the affected market or if that undertaking has pursued this objective in the past two years (e.g., the development of competing medicines that has entered an advanced phase may be interpreted as the intention to enter a new market). An exclusion of potential competitors is also possible if an undertaking involved holds important intellectual property rights in this market, even if it is not active in the market concerned. The authority will also examine more closely cases in which another undertaking involved is already active in the same product market but not the same geographical market or in an upstream, downstream or neighbouring market closely linked with the market in which the relevant undertaking holds a market share of at least 30 per cent.

The clarification added in the Merger Control Communication in the latest update of 1 October 2019 concerns takeovers by means of joint ventures (i.e., if a joint venture acquires control over the target). In this event, in general, only the joint venture is considered an undertaking acquiring control and thus an undertaking concerned. However, the Competition Commission will instead consider the parent companies as the undertakings concerned, rather than the joint venture, if one of the following conditions is met:

  1. the joint venture has been formed specifically for the purpose of acquiring the target or, respectively, has not yet started to operate;
  2. an existing joint venture is not a full-function joint venture;
  3. the joint venture is an association of undertakings; or
  4. the parent companies are actually involved in the acquisition of the target.

Other strategic considerations

The Competition Commission maintains close links with the European Commission. It accepts that, in cases in which a notification has also been filed with the European Commission, the parties provide the Form CO filing as an annex to the Swiss notification. This reduces the workload for the drafting of the Swiss notification, as the parties have to add only specific data regarding the Swiss market. That said, although annexes to the Swiss notification may be provided in English, the main part of the notification must still be drafted in one of the three Swiss official languages: French, German or Italian.

The Competition Commission usually strives to make a decision coherent with that of the European Commission in cases requiring parallel notifications in Brussels and Berne. On 17 May 2013, the Swiss government signed an agreement between the Swiss Confederation and the EU concerning cooperation on the application of their competition laws (the Agreement). The Agreement entered into force on 1 December 2014. Under the Agreement, in merger procedures with parallel notifications in Switzerland and the EU (as may often be the case in cross-border M&A), the Secretariat of the Competition Commission no longer requires the prior consent of the parties to a transaction to initiate exchanges with the staff of the Directorate-General for Competition on technical and substantive issues to ensure coordination and streamlining in the parallel proceedings.

More generally, the January 2009 report of the Taskforce Cartel Act, a panel formed in 2006–2007 by the head of the Federal Department of Economic Affairs to evaluate the ongoing effects and functioning of the CartA (see Section V), stated that in the context of growing globalisation, it would be appropriate for Switzerland to conclude cooperation agreements with its main trading partners to allow for the exchange of confidential information between competition authorities. In essence, the Agreement regulates the cooperation between the Swiss and European competition authorities. The Agreement is of a purely procedural nature and does not provide for any harmonisation of substantive competition laws. The two competition authorities shall notify each other in writing of enforcement activities that could affect important interests of the other contracting party. The Agreement contains a list of examples of cases in which notification must be given and provides for a time frame for notifications in relation to mergers and other cases (Article 3, Paragraphs 3 and 4). Furthermore, the Agreement sets forth the legal basis for the competition authorities to be able to coordinate their enforcement activities with regard to related matters.

The CartA does not contain any specific rules regarding public takeover bids. However, the Competition Commission should be contacted in advance so that it can coordinate its course of action with the Swiss Takeover Board. This is particularly important for hostile bids. Past practice has shown that in most cases the Competition Commission, in this regard also, substantially follows the rules on public takeover bids of the EU Merger Control Regulation. In addition, it is possible to request an early (provisional) implementation of a concentration prior to clearance, specifically in public takeover bids (see Section III).

Outlook and conclusions

On 14 January 2009, the federal government was presented with a synthesis report issued by the Taskforce Cartel Act (see also Section IV). As regards concentrations, the Taskforce Cartel Act took the view at the time that, compared with other countries, the Swiss system, which only prohibits concentrations that can eliminate effective competition (under the current dominance-plus test), is deficient and provides a relatively weak arsenal to enhance competition effectively. According to the experts, a risk exists that concentrations adversely impacting competition might be approved. The Taskforce recommended a harmonisation of the Swiss merger control system with the EU merger control system to eliminate such a risk and to reduce the administrative workload in respect of transnational concentrations due to diverging tests, as well as the implementation of modern instruments to control the criteria governing intervention in the case of concentrations (the significant impediment to effective competition (SIEC) test, an efficiency defence and dynamic consumer welfare standard).

On 30 June 2010, the federal government published a set of draft amendments to the CartA for public consultation. The government proposed, inter alia, to replace the currently applied dominance-plus test with either a simple dominance test (whereby the additional criterion of a possible elimination of competition would be dropped) or an SIEC test by analogy with EU law. As regards notification obligations, the government proposed maintaining the existing turnover thresholds but suggested a new exception to eliminate duplicate proceedings whereby every relevant market geographically extends both over Switzerland and at least the European Economic Area (EEA) and the concentration is appraised by the European Commission.

Based on the results of the consultation procedure, on 22 February 2012, the federal government released a dispatch to Parliament on the revision of the CartA together with a set of draft amendments. Regarding merger control, the draft amendments confirmed the willingness of the federal government to change the assessment criteria for the merger control procedure (introduction of the SIEC test) combined with a relaxation of regulations on undertakings in the case of concentrations with defined international markets and in relation to deadlines (harmonisation with the conditions in the EU). Additional changes in the merger regime included more flexible review periods. Finally, the reform would have included a waiver of the notification obligation for concentrations whereby all relevant geographical markets would comprise at least the EEA plus Switzerland and the concentration would be assessed by the European Commission. In such cases, the filing of a copy of Form CE with the Swiss authorities for information purposes would have been sufficient.

However, in September 2014, after a long parliamentary debate, the National Council finally rejected the proposed amendments and the CartA was not revised. As a result, several important changes proposed by the Council of States, including changes to the merger control regime, were no longer on the table.

Following rejection of the reform in 2014, individual parliamentary proposals have been submitted with the aim of revising specific points in the CartA.8 At the same time, the Federal Council, based on its report on the issue of restrictions of parallel imports, dated 22 June 2016, instructed the Federal Department of Economic Affairs, Education and Research to prepare a consultation bill on modernising the merger control procedures in the CartA. The Federal Council takes the view that the current merger control regime does not sufficiently take into account the negative and positive effects of mergers, and that the current dominance-plus test should be replaced by the SIEC test. The Federal Council expects this possible change to have positive effects on the competitive environment in Switzerland in the medium to long term. The State Secretariat for Economic Affairs (SECO), which had overall responsibility for drafting the bill, commissioned two reports on the implications of the introduction of the SIEC test on the Swiss merger control regime. The first report, which was released on 27 October 2017, analysed from an economic perspective the consequences that were likely to result from the introduction of the SIEC test in Switzerland. Among other conclusions, it recommended that such a test be introduced. The second report, which was released on 12 February 2020, examined the extent to which mergers would have been assessed differently in Switzerland under the SIEC test. It concluded that the SIEC test is particularly suitable for intervening in mergers that are harmful to competition.

On 24 November 2021, the Federal Council published the preliminary draft for a partial revision of the CartA and opened a public consultation. The preliminary draft suggests a number of changes to the current CartA and provides for the following amendments with regard to the merger control regime: (1) the implementation of the SIEC test; (2) the introduction of an efficiency defence in the form of the dynamic consumer welfare standard; (3) a simplification of the notification requirement for cross-border mergers for markets that include Switzerland and at least the EEA; and (4) an alignment of the deadline extensions with those of the EU. On the other hand, the draft, once again, does not contain any changes to the turnover-based intervention thresholds or provide for the introduction of new thresholds such as the transaction volume. The centrepiece of the suggested amendments to the merger control regime is the introduction of the SIEC test. In contrast to the current dominance-plus test, the SIEC test allows for an intervention, in particular in the case of unilateral (non-coordinated) effects below the threshold for single market dominance. With the SIEC test, concentrations can be prohibited or cleared subject to remedies if they lead to a significant impediment to competition. Under the current standard of review with the dominance-plus test, an intervention is possible only if a merger not only results in the creation or strengthening of a dominant position but also entails the risk of eliminating effective competition. The introduction of the SIEC test would align the applicable test under the Swiss merger control regime with that under EU law. For undertakings, the complexity of the merger control proceedings is likely to increase, whereby economic analyses of concentrations will become more important.

Another subject raised in the context of a revision of the Swiss merger control regime is the introduction of a control mechanism for direct foreign investments in Switzerland to allow for security and public order considerations when assessing such investments. Contrary to the Federal Council's recommendation, both the Council of States on 17 June 2019 and the National Council on 3 March 2020 adopted a parliamentary motion mandating the Swiss Federal Council to prepare a draft bill on foreign investment control. Although the draft bill was expected to be published for public consultation in the first half of 2022, the draft is not expected to be submitted to Parliament before 2023.