Federal Act
on Cartels and other
Restraints of Competition
(Cartel Act, CartA)

Agreements that significantly restrict competition in a market for specific goods or services and are not justified on grounds of economic efficiency, and all agreements that eliminate effective competition are unlawful.

Agreements affecting competition are deemed to be justified on grounds of economic efficiency if:

1. they are necessary in order to reduce production or distribution costs, improve products or production processes, promote research into or dissemination of technical or professional know-how, or exploit resources more rationally; and

2. they will under no circumstances enable the parties involved to eliminate effective competition.

The following agreements between actual or potential competitors are presumed to lead to the elimination of effective competition:

1. agreements to directly or indirectly fix prices;

2. agreements to limit the quantities of goods or services to be produced, purchased or supplied;

3. agreements to allocate markets geographically or according to trading partners.

The elimination of effective competition is also presumed in the case of agreements between undertakings at different levels of the production and distribution chain regarding fixed or minimum prices, and in the case of agreements contained in distribution contracts regarding the allocation of territories to the extent that sales by other distributors into these territories are not permitted.¹¹

The conditions under which agreements affecting competition are as a general rule deemed justified on grounds of economic efficiency may be set out in ordinances or general notices. In doing so the following agreements will be taken into consideration in particular:

1. co-operation agreements relating to research and development;

2. specialisation and rationalisation agreements, including agreements concerning the use of tools for calculating costs;

3. agreements granting exclusive rights to purchase or sell certain goods or services;

4. agreements granting exclusive licences for intellectual property rights;

5. ¹²agreements that have the purpose of improving the competitiveness of small and medium-sized undertakings, provided their effect on the market is limited.

Such ordinances and general notices may also recognise particular forms of co-operation specific to certain sectors of the economy as being generally justified, in particular agreements concerning the effective implementation of public law provisions on the protection of customers or investors in the field of financial services.

General notices are published by the Competition Commission in the Federal Gazette. Ordinances within the meaning of paragraphs. 1 and 2 above shall be issued by the Federal Council.

Dominant undertakings and undertakings with relative market power behave unlawfully if, by abusing their position in the market, they hinder other undertakings from starting or continuing to compete, or disadvantage trading partners.¹⁴

The following behaviour is in particular considered unlawful:

1. any refusal to deal (e.g. refusal to supply or to purchase goods);

2. any discrimination between trading partners in relation to prices or other conditions of trade;

3. any imposition of unfair prices or other unfair conditions of trade;

4. any under-cutting of prices or other conditions directed against a specific competitor;

5. any limitation of production, supply or technical development;

6. any conclusion of contracts on the condition that the other contracting party agrees to accept or deliver additional goods or services;

7. ¹⁵the restriction of the opportunity for buyers to purchase goods or services offered both in Switzerland and abroad at the market prices and conditions customary in the industry in the foreign country concerned.

Agreements affecting competition and behaviour by dominant undertakings that have been declared unlawful by the competent authority may be authorised by the Federal Council at the request of the undertakings involved if, in exceptional cases, they are necessary for compelling public interest reasons.

Planned concentrations of undertakings must be notified to the Competition Commission before their implementation if in the financial year preceding the concentration:

1. the undertakings concerned together reported a turnover of at least 2 billion Swiss francs, or a turnover in Switzerland of at least 500 million Swiss francs, and

2. at least two of the undertakings concerned each reported a turnover in Switzerland of at least 100 million Swiss francs.

…¹⁶

In the case of insurance companies, «turnover» is replaced by «annual gross insurance premium income», and in the case of banks and other financial intermediaries that are subject to the accounting regulations set out in the Banking Act of 8 November 1934¹⁷ by «gross income».¹⁸

Notwithstanding anything set out in paragraphs 1 to 3 above, notification is mandatory if one of the undertakings concerned has in proceedings under this Act in a final and non-appealable decision been held to be dominant in a market in Switzerland, and if the concentration concerns either that market or an adjacent market or a market upstream or downstream thereof.

The Federal Assembly may by general federal decree not subject to a referendum:

1. adjust the amounts set forth in paragraphs 1 to 3 above, taking account of any change in circumstances;

2. establish special criteria for the notification of concentrations in certain sectors of the economy.

Concentrations that have to be notified shall be investigated by the Competition Commission if a preliminary assessment (Art. 32 para. 1) reveals that they create or strengthen a dominant position.

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 liable to eliminate effective competition; and

2. does not improve the conditions of competition in another market such that the harmful effects of the dominant position can be outweighed.

If a concentration of banks within the meaning of the Banking Act¹⁹ is deemed necessary by the Swiss Financial Market Supervisory Authority (FINMA) for reasons related to creditor protection, the interests of creditors may be given priority. In these cases, FINMA takes the place of the Competition Commission, which it shall invite to submit an opinion.²⁰

In assessing the effects of a concentration on the effectiveness of competition, the Competition Commission also takes account of any market developments and the position of the undertakings in relation to international competition.

A concentration of undertakings that has been prohibited in accordance with Article 10 may be authorised by the Federal Council at the request of the undertakings involved if, in exceptional cases, it is necessary for compelling public interest reasons.

The Federal Council appoints the Competition Commission and designates the members of the presiding body.²⁴

The Competition Commission comprises between eleven and fifteen members, the majority of whom are independent experts.

The members of the Competition Commission disclose their interests in a register of interests. ²⁵

The Competition Commission takes the decisions and issues the rulings that are not expressly reserved to another authority. It submits recommendations (Art. 45, para. 2) and opinions (Art. 46 para. 2) to the political authorities and prepares expert reports (Art. 47 para. 1).

The Competition Commission is independent of the administrative authorities. It may organise itself into chambers, each with independent decision-making powers. It may, in individual cases, authorise a member of the presiding body to settle any urgent business or matters of minor importance.

Administratively the Competition Commission is part of the Federal Department of Economic Affairs, Education and Research (EAER)²⁶.

The Competition Commission issues internal rules of procedure, primarily setting out the details of its organisation, and in particular the responsibilities of its presiding body, each chamber and the Competition Commission as a whole.

The internal rules of procedure are subject to approval by the Federal Council.

The Competition Commission and the chambers are quorate if at least half the members, but in no case fewer than three members, are present.

Decisions are taken by a simple majority of the members present; in the event of a tie, the president shall have the casting vote.

Members of the Competition Commission must recuse themselves if there are grounds for recusal under Article 10 of the Administrative Procedure Act of 20 December 1968²⁷.

As a general rule, the fact that a member of the Commission represents an umbrella organisation does not constitute a personal interest or any other ground for recusal.

If recusal is disputed, the Competition Commission or the relevant chamber shall decide in the absence of the member concerned.

The Secretariat prepares the Competition Commission's business, conducts any investigations and, together with a member of the presiding body, issues any necessary procedural rulings. It proposes motions to the Competition Commission and implement the latter's decisions. It deals with the parties involved, third parties and any authorities directly.

The Secretariat provides opinions (Art. 46 para. 1) and advises governmental offices and undertakings on matters relating to this Act.

The Federal Council appoints the executive management of the Secretariat and the Competition Commission appoints the remainder of the Secretariat's staff.

The terms and conditions of employment are governed by the legislation applicable to federal government employees.

The competition authorities are bound by the rules on official secrecy.

They use information obtained in the performance of their duties only for the purpose for which it was obtained or for the purpose of the investigation.

The competition authorities may provide the Price Supervisor with any information required for the accomplishment of the latter's duties.

The competition authorities' publications may not reveal any business secrets.

The Secretariat may conduct preliminary investigations ex officio, at the request of undertakings involved or in response to a complaint from third parties.

The Secretariat may propose measures to eliminate or prevent restraints of competition.

During the preliminary investigation procedure, there is no right to inspect the files.

If there are indications of an unlawful restraint of competition, the Secretariat shall, in consultation with a member of the presiding body, open an investigation. It shall in any event open an investigation whenever asked to do so by the Competition Commission or by the EAER.²⁸

The Competition Commission determines the order of priority with which the investigations that have been opened are dealt with.

The Secretariat gives notice of the opening of an investigation by way of official publication.

The notice states the purpose of and the parties to the investigation. It further contains an invitation to third parties to come forward within 30 days if they wish to participate in the investigation.

Failure to give notice does not prevent any investigative measures.

If the Secretariat considers that a restraint of competition is unlawful, it may propose an amicable settlement to the undertakings involved concerning ways to eliminate the restraint.

The amicable settlement is formulated in writing and approved by the Competition Commission.

In response to a motion from the Secretariat, the Competition Commission decides on the appropriate measures or on the approval of the amicable settlement in a ruling.

The parties involved in the investigation may comment on the Secretariat's proposed motion in writing. The Competition Commission may decide to conduct hearings and instruct the Secretariat to carry out additional investigative measures.

If a significant change in the legal or factual circumstances has occurred, the Competition Commission may, in response to a motion proposed by the Secretariat or at the request of the parties involved, revoke or amend its decision.

If the Competition Commission has decided that a restraint of competition is unlawful, the parties involved may, within 30 days, submit to the EAER an application for exceptional authorisation from the Federal Council for compelling public interest reasons. If such an application is submitted, the period in which an appeal may be filed with the Federal Administrative Court begins to run only after notification of the parties of the Federal Council's decision.²⁹

Applications for exceptional authorisation by the Federal Council may also be submitted within 30 days of the entry into effect of a judgment of the Federal Administrative Court or the Federal Supreme Court.³⁰

The authorisation is of limited duration and may be subject to conditions and obligations.

The Federal Council may on request extend an authorisation if the conditions for granting it continue to be met.

On receiving a notification of a planned concentration of undertakings (Art. 9), the Competition Commission decides if there are grounds for conducting an investigation. The Competition Commission notifies the undertakings concerned of the opening of an investigation within one month of receiving the notification. If no such notice is given within that time period, the concentration may be implemented without reservation.

The undertakings concerned must refrain from implementing the concentration for one month following the notification unless the Competition Commission has at their request authorised them to do so for good cause.

If the Competition Commission decides to conduct an investigation, the Secretariat publishes the principal terms of the notification of the concentration and states the time frame within which third parties may comment on the notified concentration.

At the outset of the investigation the Competition Commission decides whether the concentration may exceptionally be implemented provisionally or whether it should remain suspended.

The Competition Commission shall complete its investigation within four months unless prevented from doing so for reasons attributable to the undertakings concerned.

The legal effect of a concentration that has to be notified is suspended, subject to the expiry of the deadline set out in Article 32 paragraph 1 and any provisional authorisation to implement the concentration. If the Competition Commission does not take a decision before the expiry of the deadline set out in Article 33 paragraph 3, the concentration is deemed authorised, unless the Competition Commission asserts by way of ruling that it has been prevented from conducting the investigation for reasons attributable to the undertakings concerned.

If a concentration that should have been notified has been implemented without due notification, the procedure set out in Articles 32 to 38 is initiated ex officio. In this case, the time period set out in Article 32 paragraph 1 begins to run as soon as the authority possesses all the information that would have to be provided in a notification of a concentration.

If the Competition Commission has prohibited a concentration, the undertakings concerned may, within 30 days, submit to the EAER an application for exceptional authorisation by the Federal Council for compelling public interest reasons. If such an application is submitted, the period in which an appeal may be filed with the Federal Administrative Court begins to run only after the parties have been notified of the Federal Council's decision.³¹

Applications for exceptional authorisation by the Federal Council may also be submitted within 30 days of the entry into effect of a judgment of the Federal Administrative Court or the Federal Supreme Court.³²

If possible, the Federal Council takes its decision within four months of receipt of the application.

If a prohibited concentration has been implemented or if a concentration is prohibited after its implementation and exceptional authorisation for the concentration has not been requested or granted, the undertakings concerned are required to take the necessary steps to restore effective competition.

The Competition Commission may require the undertakings concerned to make binding proposals as to how effective competition may be restored. It shall set them a deadline within which to do so.

If the Competition Commission accepts the proposed measures, it may decide how and by when the undertakings concerned must implement them.

If the undertakings concerned do not make any proposals despite being required to do so by the Competition Commission, or if the proposals are not accepted by the Competition Commission, the Competition Commission may order the following measures by way of a ruling:

1. the separation of any combined undertakings or assets;

2. the cessation of the controlling influence;

3. other measures to restore effective competition.

The Competition Commission may revoke an authorisation or decide to investigate a concentration despite the expiry of the deadline set out in Article 32 paragraph 1 if:

1. the undertakings concerned have provided inaccurate information;

2. the authorisation was obtained fraudulently; or

3. the undertakings concerned are in serious breach of a condition attached to the authorisation.

The Federal Council may revoke an exceptional authorisation on the same grounds.

The Administrative Procedure Act of 20 December 1968³³ applies to all procedures under this Act unless this Act stipulates otherwise.

Parties to agreements, undertakings with market power, undertakings concerned in concentrations and affected third parties shall provide the competition authorities with all the information required for their investigations and produce the necessary documents. The right to refuse to provide information is governed by Articles 16 and 17of the Administrative Procedure Act of 20 December 1968³⁴.³⁵

Federal and cantonal government offices are required to co-operate with the competition authorities in their enquiries and to make any necessary documents available to them.

The competition authorities may hear third parties as witnesses and require the parties to an investigation to give evidence. Article 64 of the Federal Act of 4 December 1947³⁷ on Federal Civil Procedure applies by analogy.

The competition authorities may order searches and seize any evidence. Articles 45–50 of the Federal Act of 22 March 1974³⁸ on Administrative Criminal Law apply by analogy to these coercive measures. Searches and seizures are ordered by a member of the presiding body in response to a motion from the Secretariat.

The Competition Commission is the Swiss authority responsible for co-operation with the institutions of the European Community under Article 11 of the Agreement between the European Community and the Swiss Confederation of 21 June 1999⁴⁰ on Air Transport.

If an undertaking opposes a review in proceedings under Article 11 of the Agreement, investigative measures pursuant to Article 42 may be undertaken at the request of the European Commission. Article 44 applies.

Data may only be disclosed to a foreign competition authority based on an act, an international agreement or with the consent of the undertaking concerned.

Without the consent of the undertaking concerned, the competition authorities may disclose confidential data, in particular business secrets, to a foreign competition authority on the basis of an international agreement only if:

1. the behaviour under investigation in the recipient state is also unlawful under Swiss law;

2. both competition authorities are investigating the same or related behaviour or transactions;

3. foreign competition authority uses the data only for the purpose of applyingprovisions of competition law or as evidence in relation to the subject matter of the investigation for which the competition authority requested the information;

4. the data is not used in criminal or civil proceedings;

5. the foreign procedural law safeguards party rights and official secrecy; and

6. the confidential data is not disclosed to the foreign competition authority in the context of an amicable settlement (Art. 29) or when assisting in the discovery and elimination of the restraint of competition (Art. 49a para. 2).

The competition authorities shall notify the undertaking concerned and invite it to state its views before transmitting the data to the foreign competition authority.

The following may come forward in order to take part in an investigation concerning a restraint of competition:

1. persons who as a result of a restraint of competition are hindered from starting or continuing to compete;

2. professional or trade associations whose bylaws authorise them to safeguard their members' economic interests, provided members of the association or of one of its sections may also take part in the investigation;

3. organisations of national or regional importance whose work is dedicated to consumer protection under the terms of their bylaws.

The Secretariat may require in a procedure that groups of more than five participants who have identical interests appoint a common representative if otherwise the investigation would be unduly complicated. It may in any event limit participation to a hearing only; the rights of parties under the Administrative Procedure Act of 20 December 1968⁴² are reserved.

Paragraphs 1 and 2 above apply by analogy to the procedure for granting an exceptional authorisation for an unlawful restraint of competition by the Federal Council (Art. 8).

In proceedings for the review of concentrations of undertakings, only the undertakings concerned have the rights of parties.

The Competition Commission shall constantly monitor the status of competition.

The Competition Commission may submit to the authorities recommendations on how to promote effective competition, especially with regard to the creation and implementation of regulations relating to commercial matters.

Federal bills relating to commercial matters that are likely to influence competition shall be submitted to the Secretariat. It determines whether such legislation may cause distortions or undue restraints of competition.

The Competition Commission shall in a consultation procedure provide its opinion on federal bills that restrain or otherwise influence competition. It may submit its opinion on cantonal bills.

The Competition Commission shall provide other authorities with expert reports on competition law issues of general importance. It may instruct the Secretariat to carry out this task in less important matters.

…⁴⁴

The competition authorities may publish their decisions.

The courts shall, without being asked to do so, furnish the Secretariat with complete copies of any judgments they may render in the application of this Act. The Secretariat shall collect these judgments and may publish them periodically.

The Secretariat and the Competition Commission shall inform the public of their activities.

The Competition Commission shall submit an annual report to the Federal Council.

Any undertaking that participates in an unlawful agreement pursuant to Article 5 paragraphs 3 and 4 or that is dominant and behaves unlawfully pursuant to Article 7 shall be charged up to 10 per cent of the turnover that it achieved in Switzerland in the preceding three financial years.⁴⁷ Article 9 paragraph 3 applies by analogy. The amount is dependent on the duration and severity of the unlawful behaviour. Due account shall be taken of the likely profit that resulted from the unlawful behaviour.

If the undertaking assists in the discovery and elimination of the restraint of competition, a charge may be waived in whole or in part.

The charge is waived if:

1. the undertaking submits notification of the restraint of competition before it takes effect. If the undertaking is informed of the opening of a procedure under Articles 26–30 within five months of submitting its notification but continues to implement the restraint of competition, the charge is not waived;

2. the restraint of competition has not been exercised for more than five years by the time an investigation is opened;

3. the Federal Council has authorised a restraint of competition under Article 8.

Any undertaking that to its advantage breaches an amicable settlement, a final and non-appealable ruling of the competition authorities, or a decision of an appellate body shall be charged up to 10 per cent of the turnover it achieved in Switzerland in the preceding three financial years. Article 9 paragraph 3 applies by analogy. In assessing the amount, due account shall be taken of the likely profit that resulted from the unlawful behaviour.

Any undertaking that implements a concentration that should have been notified without filing a notification, fails to observe the suspension obligation, fails to comply with a condition attached to the authorisation, implements a prohibited concentration, or fails to implement a measure intended to restore effective competition shall be charged up to one million Swiss francs.

In case of repeated failure to comply with a condition attached to the authorisation, the undertaking shall be charged up to 10 per cent of the total turnover in Switzerland achieved by all the undertakings concerned. Article 9 paragraph 3 applies by analogy.

Any undertaking that does not, or does not fully fulfil its obligation to provide information or produce documents shall be charged up to 100 000 Swiss francs.

Breaches are investigated by the Secretariat in consultation with a member of the presiding body. They are judged by the Competition Commission.

...⁵⁰

The competition authorities charge fees for:

1. rulings relating to the investigation of restraints of competition pursuant to Articles 26–31;

2. reviews of concentrations of undertakings pursuant to Articles 32–38;

3. expert reports and other services.

The fee is determined by the time spent on the work.

The Federal Council determines the fee rates and regulates the imposition of fees. It may provide that no fees be charged for certain procedures or services, in particular where procedures are discontinued.