CARTA HOLDINGS, INC. Today, the Swiss government started the consultation process on a further revision of the Swiss Cartel Act. After having amended the dominance rules, the Swiss government now aims to reform Swiss merger control. The envisaged revision also seeks to strengthen private damage litigation and provides for several procedural amendments as well as a clarification with respect to unlawful agreements. The new provisions are not expected to come into force before 2023/24.
Background
Following the http://www.mondaq.com/redirection.asp?article_id=1136094&company_id=80&redirectaddress=https://www.lenzstaehelin.com/en/publications/newsletters/detail/new-swiss- revision of Swiss dominance provisions, which will come into force on
Although the
Merger control
New exemption from filing obligation
Under current law, transactions that meet the turnover thresholds of Article 9(1)
- First, the proposed transaction must not have a Swiss focus, i.e. all product markets affected by the transaction must geographically comprise
Switzerland and at least the EEA. If the transaction affects a national Swiss market, the filing obligation remains in effect. -
Second, the proposed transaction must be reviewed by the EU-Commission. If the transaction is not notified to the EUCommission, the exemption does not apply, even if the relevant markets geographically comprise
Switzerland and at least the EEA.
In summary, the
However, the practicability of the proposed rule is questionable. In its decisions, ComCo often does not provide a conclusive geographic market definition. It would therefore be necessary to specify in more detail on which basis the market definition, which is relevant for the assessment of the filing obligation, would have to be carried out.
Adoption of SIEC-Test
The Proposal adopts the Significant Impediment to Effective Competition-Test ("SIEC-Test") as the relevant standard for merger control. Today, Swiss merger control still assesses transactions based on the dominance test, i.e. a transaction may only be prohibited (or subject to remedies) if it creates or strengthens a dominant position liable to eliminate effective competition. This arguably very high threshold has led to only three prohibition decisions of ComCo.
Under the proposed SIEC-Test, ComCo could prohibit a transaction (or make clearance subject to remedies) if the following two cumulative conditions are met:
- First, the transaction must significantly impede effective competition, in particular by establishing or strengthening a dominant position.
- Second, the transaction may not produce any efficiency benefits proven by the notifying parties for customers, which result specifically from the transaction and offset the disadvantages of the significant impediment to competition.
The adoption of the SIEC-Test leads to harmonization with EU practice. It furthermore allows ComCo to take unilateral and coordinated effects as well as efficiency benefits into account.
The SIEC-Test would lower the existing threshold for intervention. If introduced, it is therefore likely that ComCo will intervene more often in (domestic) mergers.
Strengthening of civil antitrust law
With regard to the civil enforcement of competition law claims, the Proposal provides for an extension of the civil law remedies to anyone whose economic interests are threatened or violated by an unlawful restriction of competition. This means that in the future, also consumers and public authorities may seek such remedies.
To ensure that the duration of administrative competition law proceedings does not preclude the civil enforcement of claims, the statute of limitations is suspended from the opening of an investigation until a legally binding decision is rendered.
In order to avoid duplication of financial burdens and to promote voluntary compensation for victims of anti-competitive practices, voluntary compensation for damages or surrender of profits may be taken into account for the amount of the competition law sanction. With this, the
Clarification regarding unlawful agreements
The Proposal suggests that competition authorities must take into account both qualitative and quantitative criteria when assessing whether agreements significantly restrict competition and, therefore, are unlawful. This proposed clarification is a response to the criticised GABA case law of the
Although the Proposal now aims to modify this case law, it remains unclear whether this will actually make hard-core agreements with insignificant impact on competition permissible again.
Procedural amendments
With regard to the administrative procedures, the Proposal provides for the following amendments:
- Regulatory time frames: In order to speed up the administrative procedures, the Proposal suggests specific time frames for both competition authorities and courts. These time frames are merely indicative and not enforceable. In case the authority is not in a position to meet them, it must explain the reasons for this to the parties.
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Consultation procedure: The proposal seeks to improve the consultation procedure (Widerspruchsverfahren) which allows companies to notify planned conduct and agreements to ComCo before implementation, thereby avoiding sanctions. With the proposed amendments, the
Federal Council intends to make the consultation procedure, which is currently hardly used, more attractive. -
Compensation:
The Federal Council proposes that parties shall be compensated for costs incurred also in proceedings before the competition authorities in case of a (partial) win. So far, compensation may only be granted before the Swiss courts.
Outlook
Interested parties may comment on the Proposal until
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
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