Complaints procedure for private parties

Is there a procedure whereby private parties can complain to the authority responsible for antitrust enforcement about alleged unlawful vertical restraints?

The Cartel Act explicitly provides for the possibility that the Secretariat conducts preliminary investigations at the request of a company involved or in response to a complaint from third parties (article 26(1) of the Cartel Act). The approximate time frame for such a preliminary investigation may extend over several years. If there are indications of an unlawful restraint of competition, the Secretariat will, in consultation with a member of the presiding body of the Competition Commission (ComCo), open an investigation (article 27(1) of the Cartel Act). In return, if there are no such indications, the Secretariat will close the preliminary investigation without any further consequence. If an alleged vertical restraint only affects the interests of the companies concerned, without any significant impact on the market or public interests, the Secretariat may refer the complaining party to private enforcement before a civil court.

Regulatory enforcement

How frequently is antitrust law applied to vertical restraints by the authority responsible for antitrust enforcement? What are the main enforcement priorities regarding vertical restraints?

Vertical restraints are of high practical relevance in Swiss competition law. The main reason for this is a traditional concern of ComCo about the level of prices in Switzerland compared to neighbouring countries.

In 2009, ComCo issued the first three decisions in which fines were imposed in cases of vertical restraints. In the ensuing years, ComCo issued no decision on vertical restraints in 2010, one decision in 2011, two decisions in 2012, one decision in 2013, no decision in 2014, one decision in 2015, two decisions in 2016, one decision in 2017 and 2018 respectively, two decisions in 2019, one decision in 2020 and (as of November 2021) no decision in 2021. The main enforcement priorities are in the areas of absolute territorial protection and fixed or minimum prices.

What are the consequences of an infringement of antitrust law for the validity or enforceability of a contract containing prohibited vertical restraints?

According to Swiss civil law, a contract is void if its terms are unlawful (article 20(1) of the Code of Obligations). This fully applies to contracts containing prohibited vertical restraints, ie vertical restraints eliminating or significantly restricting effective competition without being justified by reasons of economic efficiency. According to the principle of severability, where the defect pertains only to certain terms of a contract, those terms alone are void unless there is cause to assume that the contract would not have been concluded without them (article 20(2) of the Code of Obligations).

May the authority responsible for antitrust enforcement directly impose penalties or must it petition another entity? What sanctions and remedies can the authorities impose? What notable sanctions or remedies have been imposed? Can any trends be identified in this regard?

ComCo may directly impose penalties (articles 18(3), 30 and 53 of the Cartel Act). It may impose a fine of up to 10 per cent of the respective company’s turnover in Switzerland in the previous three business years (article 49a(1) of the Cartel Act). Moreover, ComCo may decide on any other appropriate measures, including the prohibition or imposition of a particular conduct, a declaratory decision, or the approval of an amicable settlement based on a motion from the Secretariat (article 30(1) of the Cartel Act). The competition authorities are focused on the one hand on obstacles to parallel imports and on the other hand on price recommendations that may have the same effect as fixed or minimum prices, both of which have recently resulted in considerable fines.

In 2009, ComCo imposed fines of 5.7 million Swiss francs in total for public price recommendations by three pharmaceutical companies (Hors-Liste case; this decision was upheld on substance by the Federal Supreme Court (2021), but remanded to the Federal Administrative Court for a review of the fine) and a fine of 4.81 million Swiss francs for an agreement prohibiting parallel imports of toothpaste (Gaba; this decision was confirmed by the Federal Supreme Court (2016)). In 2011, ComCo issued a decision regarding the prohibition of parallel imports in the area of photographic cameras resulting in fines of 12.5 million Swiss francs in total (Nikon case; confirmed by the Federal Administrative Court (2016), which reduced the fine to approximately 12 million Swiss francs). In 2012, ComCo imposed a fine of 156 million Swiss francs on BMW for impeding direct and parallel imports into Switzerland, which constitutes the so far highest competition law fine in the area of unlawful agreements (BMW case; confirmed by the Federal Supreme Court (2017)). In 2013, ComCo imposed (unpublished) fines in a decision regarding impediments to parallel imports of French-language books (French-language Books case; confirmed by the Federal Administrative Court (2019) with the total of the fines reduced to 14.3 million Swiss francs). In 2017, ComCo approved an amicable settlement with the manufacturer and the Swiss general importer of robotic lawn mowers and imposed a fine of approximately 657,000 Swiss francs for unlawful vertical price-fixing (Husqvarna case). In 2018, ComCo approved an amicable settlement with a trolley suitcase manufacturer that had restricted active and passive sales into Switzerland and imposed a fine of 135,000 Swiss francs (Rimowa case). In 2019, ComCo approved amicable settlements and imposed fines on a Swiss ski producer for resale price maintenance (Stöckli case; fine of approximately 140,000 Swiss francs) and on a wholesaler of agricultural machines and spare parts for agreements with dealers having resulted in absolute territorial protection (Bucher Landtechnik case; fine of approximately 150,000 Swiss francs).

Investigative powers of the authority

What investigative powers does the authority responsible for antitrust enforcement have when enforcing the prohibition of vertical restraints?

Parties to vertical agreements are required to provide the competition authorities with all relevant information and to produce all necessary documents (article 40 of the Cartel Act). The competition authorities may also hear third parties as witnesses and require the parties to the investigation to make statements (article 42(1) of the Cartel Act). The competition authorities may order searches and seize documents (hard copy and digital) (article 42(2) of the Cartel Act). In this context, all documents and electronic databases located at the undertaking’s premises, as well as at the houses of managers, can be searched and seized. Correspondence exchanged with Swiss attorneys or attorneys in EU or EFTA member states are generally protected by legal privilege. However, the scope of legal privilege in Switzerland is narrower than in other jurisdictions. The competition authorities may also demand information from suppliers domiciled outside Switzerland. In particular, a bilateral cooperation agreement on competition matters between the European Union and Switzerland has provided a framework for the exchange of information between Swiss and EU competition authorities since 2014.

Private enforcement

To what extent is private enforcement possible? Can non-parties to agreements containing vertical restraints obtain declaratory judgments or injunctions and bring damages claims? Can the parties to agreements themselves bring damages claims? What remedies are available? How long should a company expect a private enforcement action to take?

A person hindered by an unlawful restraint of competition from entering or competing in a market is entitled to request the elimination of or desistance from the hindrance, damages and satisfaction in accordance with the Swiss Code of Obligations, and surrender of unlawfully earned profits in accordance with the provisions on agency without authority before a civil court (article 12(1) of the Cartel Act). Therefore, generally only persons engaged in competition have a right of action, not however, eg, consumers or employees.

Private antitrust enforcement is not yet widespread in Switzerland, which is mainly due to the high burden of proof and the cost risk, as the court costs and the legal fees of the opposing party usually have to be borne by the losing party. While there is a lack of generalisable data, proceedings may regularly take several years until there is a binding decision.

In 2021, the government published a preliminary draft for a partial revision of the Swiss Cartel Act, which intends in particular to facilitate the private enforcement of competition law, including by granting a right of action to end customers (whereas so far only persons hindered from entering or competing in a market were entitled to do so).