Investigation and settlement

Legal representation

Under which circumstances would the company and officers or employees need separate legal representation? Do the authorities require separate legal representation during certain types of investigations?

In case of an (actual or potential) conflict of interest between the company and its employees, a separate legal representation of the employee is recommended. In case of an investigation against a company, its board members and senior management (officers) are treated as forming part of the company. Current and former employees will be considered witnesses. If the Competition Commission questions employees, it expects separate legal representation (legal representation is, however, not mandatory).

Dawn raids

For what types of infringement would the regulatory authority launch a dawn raid? Are there any specific procedural rules for dawn raids?

Dawn raids are increasingly used; they may be used to investigate any breach of competition law.

The Competition Commission has issued detailed guidelines on how it conducts a dawn raid (www.weko.admin.ch/weko/de/home/dokumentation/bekanntmachungen---erlaeuterungen.html).

The search team may search both business premises and private (residential) premises, as well as vehicles. Any electronic data that the search team can access from the premises searched may be searched as well.

What are the company’s rights and obligations during a dawn raid?

The occupant of the premises searched has the right to be present; his or her presence is, however, not a requirement. The company has to accept the search and must cooperate to a certain extent by, for example, opening rooms and safes, providing passwords, etc. There is no further duty to cooperate by, for example, indicating additional material, premises, etc. The company may ask that certain data (paper or electronic files) is sealed (for example, attorney-client correspondence).

Settlement mechanisms

Is there any mechanism to settle, or to make commitments to regulators, during an investigation?

During a dawn raid, a settlement will be difficult to reach, but a company may indicate that it will cooperate and file a marker (see question 17). Thereafter, the company must actively cooperate if it wishes to retain the status under a leniency application.

The Competition Commission secretary’s office can close an investigation by proposing an amicable settlement with the undertaking investigated. Such an amicable settlement must include clauses on how the restraint to competition will be removed and be in writing. An amicable settlement needs to be approved by the Competition Commission. On 28 February 2018, the Competition Commission issued guidelines on how it will structure and approach amicable settlements. In the settlement, the undertaking agrees to change its behaviour. Officially, the settlement does not address the issue of the amount of the sanction, which is unilaterally imposed by the Competition Commission. However, the secretary of the Competition Commission informs the undertaking prior to the settlement of the approximate amount proposed to the Commission. In the settlement, the undertaking must renounce its right to file an appeal.

What weight will the authorities place on companies implementing or amending a compliance programme in settlement negotiations?

In settlement negotiations, the fact that a compliance programme will be implemented, amended or enhanced may be an element that is considered to determine whether the restraint to competition has been removed for good.

Corporate monitorships

Are corporate monitorships used in your jurisdiction?

There have not been any precedents where a formal corporate monitorship was established; however, if a company breaches an amicable settlement, the Competition Commission may monitor its behaviour or mandate third parties to do so, and such an undertaking will be subject to administrative sanctions (up to 10 per cent of the turnover in Switzerland in the prior three business years) and the individuals may be subject to criminal sanctions (up to 100,000 francs).

Statements of facts

Are agreed statements of facts in a settlement with the authorities automatically admissible as evidence in actions for private damages, including class-actions or representative claims?

Agreed statements of facts may be used by claimants if they are available to them. However, as the settlement decisions are not published, claimants in actions for private damages either have to apply for access to the files or demand a copy from the defendants. The right to access the file will be assessed under the Swiss Data Protection Act; it may be limited, based on a weighting of interests of the parties involved. The practice is not yet clearly settled. In a string of recent decisions, it was established that third parties may access personal data (including the identities) of the parties of proceedings of the Competition Commission subject to a balancing of the interest check. In such balancing of interests, safeguarding the identity of a whistle-blower will be a key concern.

Invoking legal privilege

Can the company or an individual invoke legal privilege or privilege against self-incrimination in an investigation?

Officers and employees cannot be compelled to give answers that would indicate that they have breached the law. Correspondence with external (but not in-house) legal counsel is privileged to the extent it serves to provide legal advice. Following a recent Federal Court Decision, it is no longer entirely clear to what extent legal documents containing statements of facts only (not directly in connection with a defence in legal proceedings) are privileged (for example, findings of an internal investigation). However, the Competition Commission has the right to ask for documents and to ask questions of fact; parties to an investigation are under an obligation to respond and to provide documents, and breach of this duty may be sanctioned by criminal fines of up to 20,000 francs.

Confidentiality protection

What confidentiality protection is afforded to the company and/or individual involved in competition investigations?

The Competition Commission may publish the name of the company it is investigating, although this is often done in a generic way only. Business secrets are protected and the Competition Commission may not publish business secrets of a party. A party may ask for business secrets in documents submitted to the Competition Commission to be blackened before other parties to the proceedings are granted access to the file.

Refusal to cooperate

What are the penalties for refusing to cooperate with the authorities in an investigation?

If the Competition Commission has issued a formal request for information, the company refusing to cooperate may be subject to administrative sanctions (and, in the case of a final verdict, the non-cooperation may lead to increased final administrative sanctions) and the individuals subject to criminal fines up to 20,000 francs.

Infringement notification

Is there a duty to notify the regulator of competition infringements?

There is no such duty under competition law. Companies under prudential supervision (such as banks) may have to notify their regulator under the supervisory rules applicable to them.

Limitation period

What are the limitation periods for competition infringements?

No administrative sanctions are levied if the incriminating behaviour was terminated more than five years prior to the opening of an investigation. Criminal sanctions for breaches of an amicable settlement or of orders of the authorities are subject to a statute of limitation of five years, and other criminal sanctions to a limitation period of two years. Civil claims are subject to the regular limitation periods applying (for example, for torts, one year after the damaged party received know­ledge of the damage and of the identity of the person liable, but in any case 10 years after the act causing the damage took place).