Answer ... The review process is carried out in the following (informal and formal) steps. In the first step, which customarily is the pre-notification phase, a draft filing is submitted to the Secretariat, which reviews the draft and assesses whether the filing is complete. This may take up to 10 working days, during which the Secretariat usually requests further information from the notifying undertaking(s). Upon submission of a complete merger control notification, Phase I as a second step is triggered.

During Phase I, the Swiss Competition Commission (COMCO) must inform the notifying undertaking(s) within one month of receiving the complete merger control notification whether it intends to initiate Phase II. If the COMCO makes no notification within this period, the contemplated concentration may be completed. The COMCO has no possibility to extend Phase I without initiating Phase II as a third step. Unless the notified concentration obviously raises no concerns, the Secretariat will carry out a market test by sending out questionnaires to competitors, suppliers and customers of the undertakings concerned. The answers received will usually have an important bearing on the position taken by the COMCO.

If the COMCO decides to enter into Phase II, this decision will be published. The COMCO must complete Phase II within four months. If the COMCO makes no notification within this period, the contemplated concentration may be completed. In practice, however, the COMCO will usually provide the undertakings concerned with a so-called ‘clearance note’. An extension of the four-month period (‘stop the clock’) is possible only in the event of a delay for which the undertakings concerned are responsible or which may be attributed to them, and which has causally impeded the COMCO in properly assessing the contemplated concentration (causal nexus). The COMCO must formally decide on the deadline extension.

Usually, in a Phase II investigation, the parties are required by the Secretariat to submit, and may also voluntarily file, further documents and information to assist in the assessment of the notified concentration. In principle, the Secretariat also sends out additional questionnaires to customers, suppliers and competitors to expand on the market test and the respective analysis conducted during Phase I. In general, a close working relationship with the Secretariat is established during Phase II, particularly when it comes to discussions on possible remedies (ie, conditions or obligations). As a final step before the COMCO takes a decision, the undertakings concerned and third parties – including in particular competitors – are summoned for a formal hearing by the COMCO.

Answer ... There are no formal ways to accelerate the timetable for review in either Phase I or Phase II. In practice, however, the one-month timeframe for Phase I may be reduced in less complex cases if, in particular, the draft filing is submitted to the Secretariat for review prior to formal notification, thus enabling the Secretariat and the Swiss Competition Commission (COMCO) to communicate their position shortly after formal and complete notification is made. However, given the division of work between the COMCO, its chamber for concentrations and the Secretariat, one must bear in mind that it is usually difficult to shorten the one-month Phase I timeframe, for practical reasons.

In practice, the four-month timeframe for Phase II can be shortened where it becomes sufficiently clear to the COMCO and the Secretariat early in the process that no grounds for intervention exist.

Answer ... There is no formal simplified review process. However, in particular for foreign-to-foreign mergers that do not significantly affect the Swiss market, but that meet the merger control notification requirements, a simplified notification procedure is available upon application. On a more general level, for any merger control notification, the Swiss Competition Commission and its Secretariat may, for valid reasons, release the notifying undertaking(s) from the obligation to provide certain information and documentation. In general, such simplifications are discussed prior to submission of the formal merger control notification in the pre-notification discussions with the Secretariat.

Answer ... In 2013 Switzerland entered into a bilateral agreement with the European Union concerning cooperation on the application of their competition laws (the EU Cooperation Agreement). The EU Cooperation Agreement is qualified as a ‘second generation’ cooperation agreement, as the scope of information exchange is broader, and information can be exchanged even against the will of the concerned undertakings and in some cases outside of a formal investigation. The EU Cooperation Agreement provides a framework for closer coordination of enforcement activities between the Swiss Competition Commission (COMCO) and the European Commission, although not with the competition authorities of individual EU member states.

With regard to merger control, the scope of the EU Cooperation Agreement includes, in particular:

• mutual notifications of merger control investigations;
• coordination of merger control enforcement activities, such as alignment of the conditions and obligations for clearance of a contemplated concentration; and
• the exchange of information obtained during the respective merger control proceedings.

Implementation of the EU Cooperation Agreement was accompanied by an amendment to the Swiss competition law regime whereby undertakings will be informed of, and have the right to comment on, decisions of the COMCO to share their information with the European Commission.

Answer ... On request, the undertakings concerned and affected third parties are obliged to provide the Swiss Competition Commission (COMCO) and the Secretariat with all information required to conduct their merger control investigations and produce the necessary documents. In this regard, the Secretariat conducts a market test by sending out questionnaires not only to the undertakings concerned, but also to customers, suppliers and competitors, to gather all information deemed necessary to assess the contemplated concentration. Failure to fulfil or incorrect fulfilment of the duty to provide information is subject to fines (see question 3.5).

Answer ... In principle, the Secretariat conducts a market test by sending out questionnaires to customers, suppliers and competitors, soliciting their opinion on a notified concentration (see question 4.1). However, these third parties have no legal standing (ie, no formal procedural rights), and the Swiss Competition Commission (COMCO) and its Secretariat are neither required to issue questionnaires nor bound by any answers submitted.

If the COMCO or the chamber for concentrations respectively decides to open Phase II, it will publish the basic terms of the notified concentration and provide third parties with the opportunity to state their position with respect to the contemplated concentration by a certain deadline. Third parties must submit their respective statements in writing. However, in the course of Phase II, the COMCO in principle may hold hearings that may also involve third parties, such as competitors and representatives of authorities in the industry concerned. Third-party hearings are in principle held in the presence of the undertakings concerned, subject to the protection of third parties’ business secrets.

According to the Swiss Federal Act on Cartels and Other Restrictions of Competition as well as the relevant case law of the Swiss Federal Supreme Court, third parties are not entitled to any remedies against a decision of the COMCO to clear or prohibit a concentration, or to clear it subject to conditions and obligations (see question 6.2).

Answer ... As a principle, closing of a concentration that is subject to compulsory merger control notification is suspended during Phase I and Phase II (standstill obligation), and failure to comply with the provisional ban on closing is subject to fines (see questions 3.8, 7.1 and 7.2). Hence, closing prior to final clearance is possible only if the Swiss Competition Commission (COMCO) exceptionally grants provisional approval to do so, in principle upon the submission of a reasoned request (see question 3.8).

The main criterion for provisional approval is the degree of reversibility, and the provisional approval may also be granted subject to conditions and obligations. Therefore, provisional approvals including local carve-outs are possible if the requirements for provisional approval are met. However, provisional approvals remain exceptional in practice, the COMCO preferring to maintain the standstill obligation.

Answer ... The applicable substantive test under the Swiss merger control regime is the so-called ‘qualified creation or strengthening of dominant position’ (‘qualified CSDP’) test. In September 2014 the Swiss Parliament rejected a proposed revision of the Swiss Federal Act on Cartels and Other Restrictions of Competition that, among other things, would have introduced the ‘significant impediment to effective competition’ (‘SIEC’) test applied in the European Union and most of its member states.

Based on the applicable qualified CSDP test, a concentration will be prohibited or cleared only subject to conditions and/or obligations if it:

• would create or strengthen a dominant position that is liable to eliminate effective competition in the relevant market(s); and
• would not enhance competition in another market to an extent that outweighs the harmful effects resulting from the creation or strengthening of the dominant position in the relevant market(s).

The substantive test as such is not directly affected by special circumstances. However, the Swiss Competition Commission (COMCO) takes the failing firm defence into account as part of the causality test, since the contemplated concentration must be causal to the creation or strengthening of a dominant position.

According to the COMCO’s practice, to successfully invoke the failing firm defence, the following conditions must be satisfied:

• One or more undertakings concerned would disappear from the market within a short time in the absence of the contemplated concentration (ie, without external support);
• The other undertaking(s) would absorb most or all of the market shares of the failing firm; and
• There is no alternative measure that would be less harmful to competition than the proposed concentration.

For compelling public reasons (eg, employment, regional development, environmental considerations), a concentration of undertakings that has been blocked by the COMCO may be authorised by the Swiss Federal Council at the request of the undertaking(s) concerned.

Answer ... Under the Swiss merger control regime, the same test as outlined under question 4.8 applies to joint ventures.

Answer ... The substantive test for clearance under the Swiss merger control regime is that of qualified market dominance (the qualified CSDP test; see question 4.8). Applying this test, the Swiss Competition Commission (COMCO) also investigates coordinated effects in case of oligopolies. In our view, it is inadmissible to assess unilateral effects under the qualified CSDP test. However, this is controversial. In practice, the COMCO takes such effects at least indirectly into account. In addition, it examines conglomerate effects and vertical foreclosure.