1 Legal and enforcement framework
1.1 Which legislative and regulatory provisions apply to cartels in your jurisdiction?
In Switzerland, cartels are regulated by the Federal Act on Cartels and Other Restraints of Competition of 6 October 1995 (‘Cartel Act'). The regulatory framework is supplemented by several ordinances, general notices, guidelines and communications of the Competition Commission (ComCo). Among the federal ordinances that apply to cartels, particular mention should be made of the Ordinance of 12 March 2004 on Sanctions imposed for Unlawful Restraints of Competition (‘Cartel Act Sanctions Ordinance'), which defines (among other things) the procedures for calculating sanctions.
1.2 Do any special regimes apply to cartels in specific sectors?
Pursuant to Article 3, paragraph 1 of the Cartel Act, statutory provisions that do not allow for competition in a certain market for certain goods or services take precedence over the provisions of the Cartel Act. Such statutory provisions include, in particular:
- provisions that establish an official market or price system; and
- provisions that grant special rights to specific undertakings to enable them to fulfil public duties.
In certain areas – such as public education, agriculture and healthcare – competition may be excluded in whole or in part. However, the competition authorities only very restrictively admit exceptions based on Article 3, paragraph 1.
1.3 Which authorities are responsible for enforcing the cartel legislation?
The Cartel Act provides for two competition bodies: the ComCo and the ComCo Secretariat. In cartel proceedings, the Secretariat essentially assumes the role of a public prosecutor; whereas the ComCo is the decision-making body. The main tasks of the Secretariat are therefore to conduct investigations and to prepare the ComCo's decisions. The total staff of the Secretariat amounts to more than 70 employees, a significant number of whom are lawyers and economists. The ComCo, which is headed by its president and two vice presidents, consists of 11 to 15 members who are elected by the Federal Council. Most of its members must be independent experts; the other members are nominated by major business associations.
1.4 How active are the enforcement authorities in investigating and taking action against cartels in your jurisdiction? What are the statistics regarding past and ongoing cartel investigations? What key decisions have the enforcement authorities adopted most recently?
According to its most recent annual report, the Secretariat conducted 24 investigations in 2018. In that year, four final decisions were issued, of which two were amicable settlements and two administrative rulings. In each of these final decisions, sanctions were imposed pursuant to Article 49a, paragraph 1 of the Cartel Act. In general, and in view of the statistics in recent years, it may be said that the ComCo is actively pursuing cartels in Switzerland, covering many different sectors of the economy.
Key decisions issued by the enforcement authorities in recent years include those in Gaba/Elmex and Engadin I. In 2009 Gaba, the manufacturer of Elmex toothpaste, prohibited Gebro – which produces Elmex in Austria under licence – from exporting the toothpaste to other countries such as Switzerland. The ComCo subsequently fined Gaba for unlawfully restricting parallel imports. According to the ComCo, competition was significantly impaired by Gaba's conduct. This decision was subsequently confirmed by the Federal Supreme Court.
Engadin I related to a major investigation in the canton of Graubünden concerning a bidding agreement between various construction companies. Between 2004 and 2012, 13 companies from the construction industry colluded on public procurement contracts. Offers were divided between them and prices agreed upon. In total, 235 public tenders with a value of 112 million were affected by this bidding cartel.
2 Definitions and scope of application
2.1 How is a ‘cartel' defined in the cartel legislation?
Contrary to what its title might suggest, the Cartel Act does not define the notion of ‘cartel' as such, but refers rather to the concept of ‘agreements affecting competition'. Pursuant to Article 4, paragraph 1 of the Cartel Act, ‘agreements affecting competition' are defined as binding or non-binding agreements, as well as concerted practices, between undertakings operating at the same or at different levels of production which have a restraint of competition as their object or effect. This definition is very broad and includes a wide range of possible agreements, from parallel (coordinated) behaviour and gentlemen's agreements to binding forms of collusion.
2.2 What specific offences are defined in the cartel legislation?
As a general rule, 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 (Article 5, paragraph 1 of the Cartel Act). For certain so-called ‘hardcore' agreements, the elimination of effective competition is presumed. In this context, the Cartel Act distinguishes between horizontal agreements (ie, agreements between actual or potential competitors) and vertical agreements (ie, agreements between undertakings at different levels of the market). Horizontal agreements relating to prices or quantities, or that allocate markets, are presumed to eliminate effective competition and are therefore presumed to be illegal. The same applies to vertical agreements which impose a minimum or fixed resale price, as well as distribution contracts allocating territories, to the extent that sales by other distributors into these territories are not permitted.
2.3 Is liability under the cartel legislation civil, criminal or both?
The Swiss cartel legislation essentially provides for sanctions of an administrative nature. However, in the opinion of the prevailing doctrine and the Federal Supreme Court, such administrative sanctions are to be considered as criminal sanctions within the meaning of Article 6 of the European Convention on Human Rights (on this subject, see question 3.6). The Cartel Act also contains a section on the civil liability of undertakings involved in a cartel (on this subject, see question 8), as well as a section on criminal penalties (on this subject, see question 6).
2.4 Can both individuals and companies be prosecuted under the cartel legislation?
From a personal point of view, the Cartel Act applies to undertakings under private or public law that are parties to cartels or other agreements affecting competition. In this context, ‘undertaking' refers to any enterprise engaged in the economic process which offers or acquires goods or services, irrespective of its organisation or legal form (Article 2, paragraph 1bis of the Cartel Act). As long as they meet the definition of an ‘undertaking', both individuals and companies can thus be prosecuted under the Swiss cartel legislation.
2.5 Can foreign companies be prosecuted under the cartel legislation?
Yes, insofar as the Cartel Act applies to situations that may have effects in Switzerland, even if they are initiated in another country (‘effects doctrine' pursuant to Article 2, paragraph 2 of the Cartel Act).
2.6 Does the cartel legislation have extraterritorial reach?
No, in accordance with the principle of territoriality, the Swiss enforcement authorities cannot directly carry out procedural acts outside the Swiss territory. Subject to cooperation agreements with other states, the application of this principle may thus limit or even preclude certain enforcement measures with regard to companies domiciled abroad, especially if those companies do not have subsidiaries or branches in Switzerland
2.7 What is the statute of limitations to prosecute cartel offences in your jurisdiction?
The question of the statute of limitations to prosecute cartel offences in Switzerland is not addressed in the Cartel Act. In a 2018 decision concerning the SIX Group case (B-831/2011), the Federal Administrative Court decided on a 10-year period, applying the provisions of Article 60 of the Swiss Code of Obligations by analogy. However, in the case of qualified restraints of competition, any charge is waived if the restriction of competition ceased to have effect more than five years before the initiation of the investigation (see Article 49a, paragraph 3 of the Cartel Act).
3 Investigations – general
3.1 On what grounds may the enforcement authorities commence an investigation?
The Secretariat may conduct preliminary investigations:
- on its own initiative (eg, on the basis of indicators pointing to a possible market deficiency);
- at the request of undertakings involved (eg, competitors of the target company); or
- in response to a complaint from third parties (eg, clients or suppliers of the target company).
If there are indications of an unlawful restraint of competition, the Secretariat shall, in consultation with a member of the presiding body of the Competition Commission (ComCo), open an in-depth investigation – even without necessarily having conducted preliminary investigations. It shall in any event open such an investigation whenever asked to do so by the ComCo itself or by the Federal Department of Economic Affairs, Education and Research.
3.2 What investigatory powers do the enforcement authorities have in conducting their investigation?
In general, the competition authorities have relatively extensive powers of investigation. They may, in particular, order inspections of premises (‘dawn raids') and seize any evidence. The Federal Act on Administrative Criminal Law (AACL) applies by analogy to these measures. The competition authorities may also hear third parties as witnesses and compel the parties to the investigation to give evidence. The Secretariat has issued an explanatory note dated 6 January 2016 on selected instruments of investigation, in which the practice of the competition authorities is explained in detail.
3.3 To what extent may the enforcement authorities cooperate with their counterparts in other jurisdictions during their investigation? How common is such cooperation in practice?
As a general rule, any cooperation of the Swiss competition authorities with foreign authorities shall be based on a sufficient respective legal basis under an international agreement. Given the increasing globalisation of the economy, and considering its proximity to the European Union, Switzerland has entered an agreement with the European Union concerning cooperation on the application of their competition laws. This agreement entered into force on 1 December 2014 and allows the ComCo and the European Commission's Directorate-General for Competition to inform each other about enforcement measures, to coordinate such measures and to exchange information. It also contains clear rules on the respect of existing procedural safeguards for the companies concerned. The Cartel Act (Article 42a) also specifically regulates cooperation with European institutions in the field of air transport.
On an informal basis, the competition authorities also participate in different networks of competition authorities, such as the Competition Committee of the Organisation for Economic Co-operation and Development and the International Competition Network. Exchanges within the framework of such networks are limited to the sharing of knowledge and do not allow for formal cooperation.
3.4 Is there an opportunity for third parties to participate in the investigation?
Pursuant to Article 43 of the Cartel Act, the following third parties may apply to participate in the investigation:
- persons who are being hindered from entering into or exercising competition as a result of the restraint of competition;
- professional or economic associations whose statutes allow them to defend the economic interests of their members, provided that members of the association or of one of its sections can participate in the investigation; and
- organisations of national or regional importance which are statutorily dedicated to consumer protection.
3.5 What are the general rights and obligations of the enforcement authorities during the investigation?
As discussed in question 3.2, the competition authorities have broad investigatory powers to establish the decisive facts and to assess whether antitrust regulations have been violated. Although the Cartel Act does not expressly provide for this, it is generally admitted that the ComCo may also order interim measures in urgent cases in the event of a probable violation of the Cartel Act that threatens to cause damage that would not easily be remedied. The investigation procedure is governed by the Administrative Procedure Act, unless the Cartel Act stipulates otherwise. This procedure is thus largely dominated by the principle of ex officio investigation. In the context of an investigation, the obligations of the competition authorities consist, in particular, in respecting the rights of the parties (see question 3.6).
3.6 What are the general rights and obligations of the target company during the investigation?
The parties to an investigation shall have the rights guaranteed to them by the Federal Constitution, the Administrative Procedure Act and the Cartel Act. The right to be heard is in practice the most important right of the parties. It encompasses, in particular, the right to consult the file and the right to obtain a motivated decision within a reasonable timeframe. In addition, Article 30, paragraph 2 of the Cartel Act allows the participants involved in the investigation to comment in writing on the proposal for a decision that the Secretariat intends to address to the ComCo.
Since participation in an unlawful cartel agreement is sanctionable with fines pursuant to Article 49a of the Cartel Act, it is generally accepted that such proceedings are criminal in nature. The guarantees of a fair trial which an accused person must benefit from in criminal matters this apply (Article 6 of the European Convention on Human Rights). These guarantees include, in particular, the presumption of innocence, the privilege against self-incrimination (‘nemo tenetur' principle), and respect of the principles of legality and ‘ne bis in idem'.
The main obligation of the parties is to inform the competition authorities in accordance with Article 40 of the Cartel Act. The target company and the individuals involved in the investigation must therefore provide the authorities with all relevant information and produce all necessary documents. They may, however, refuse to provide information pursuant to Articles 16 and 17 of the Administrative Procedure Act – in particular, if the disclosure of certain facts would expose the persons questioned to criminal proceedings.
3.7 What principles of attorney-client privilege apply during a cartel investigation?
Pursuant to Article 46, paragraph 3 of the AACL, it is prohibited to sequestrate objects and documents relating to contacts between a person and his or her lawyer if the latter is authorised to practise legal representation and does not have the status of a defendant in the same case. Attorney-client privilege is therefore fully applicable in the context of a cartel investigation. However, exchanges with in-house counsels are not covered by privilege. Moreover, only documents and information produced in the course of the lawyer's core activities – that is, legal advice and representation in court – will be privileged. Thus, documents exchanged in the course of another activity of the lawyer (eg, board of directors' mandate; trust agreement; financial advice) will not be covered by attorney-client privilege.
3.8 Are details of the investigation publicly announced? If so, what principles of confidentiality apply?
The Secretariat gives notice of the opening of an investigation by way of official publication in the Swiss Official Gazette of Commerce. The competition authorities must then preserve official and business secrets, and may use information obtained in the course of their duties only for the purpose of providing information or carrying out the investigation. Any publication of the competition authorities relating to the investigation is therefore submitted to the parties beforehand and expunged of any official and business secrets.
4 Investigations – step by step
4.1 What initial steps do the enforcement authorities take to commence a cartel investigation?
The cartel investigation under Swiss antitrust law is a two-stage procedure: the Secretariat generally opens a preliminary investigation and then opens an in-depth investigation if there are indications of an unlawful restraint of competition (see question 3.1). When the procedure begins with a preliminary investigation, an initial questionnaire is generally sent to the companies concerned. However, an in-depth investigation may be opened without a prior investigation; in such cases, the authorities will often start the investigation procedure by searching the premises (dawn raid) of the target company.
4.2 Are dawn raids commonly conducted in your jurisdiction? If so, what are the pre-conditions for conducting a dawn raid? When, where and by whom are they conducted? Do the enforcement authorities have the power to search private as well as company premises?
Yes, dawn raids are commonly conducted in Switzerland. The essential material condition for conducting a dawn raid is a sufficient suspicion of a violation of antitrust law. From a formal point of view, any dawn raid must in principle be based on a written warrant issued by a member of the Competition Commission's (ComCo) presiding body. Dawn raids are usually conducted in the early hours of the day at the premises of the target company by a team from the Secretariat, accompanied by a public officer (eg, local police officer). The dawn raid team has the right to search all premises, whether company or private premises, as well as the premises of the parties to the proceedings and third parties. All containers on the premises may also be searched (eg, office cupboards and safes).
4.3 What powers do officers have during the dawn raid? Are there any limitations on these powers?
During the dawn raid, the team may search the entire premises (see question 4.2), all papers and documents contained therein, as well as all data accessible from the location of the search. The main limitation imposed on the powers of the Secretariat lies in the respect of the principle of proportionality. Thus, the dawn raid team must ensure that interference with the company's business is limited as much as possible and that the company's legitimate interests are safeguarded.
4.4 What are the rights and obligations of the target company and any individuals targeted during a dawn raid?
The target company and any individuals involved have the right (but not the obligation) to participate in the dawn raid. If papers or other records are searched, the ‘holder of the papers' has the right (but not the obligation) to comment on their content prior to the search. The individuals concerned can thus indicate whether, for example, a paper is of a private nature or whether there is a prohibition on seizure – in particular, whether the document is covered by client-attorney privilege. The ‘holder of the documents' has the right to object to the search of documents and other records. If an opposition is filed, the documents are sealed and kept in a safe place until the Lower Appeals Chamber of the Federal Criminal Court rules on the validity of the search. Moreover, the target company is entitled to obtain assistance from a lawyer. However, the dawn raid team will not wait for the lawyer to arrive before starting its search of the premises or seizing documents or electronic data.
The target company and the individuals concerned have an obligation to tolerate the search. This duty includes ensuring access to the premises, containers and data systems being searched (eg, by opening doors and safes and revealing passwords). They may not prevent or impede access to them, under penalty of committing the criminal offence of impeding the performance of an official act (Article 286 of the Swiss Criminal Code). However, the persons concerned are not obliged to cooperate actively in the search.
4.5 What evidence can be seized during a dawn raid? Do the enforcement authorities have the power to interview witnesses and take statements during a dawn raid?
In principle, all original written documents and accessible data may be seized during a dawn raid. In practice, the Secretariat usually makes copies of written documents and makes duplicates or copies of company data for further analysis at its premises using forensic software. The enforcement authorities may hear witnesses and take statements during a dawn raid. The latest dawn raids conducted by the Secretariat have confirmed this practice.
4.6 How can a company best prepare itself for dawn raids? What best practices should it follow in the event of a dawn raid?
Companies should consider setting up dawn raid preparedness programmes, through which the roles and internal procedures of the company in case of a dawn raid are clearly defined. In general, it may also be recommended that privileged correspondence with the company's lawyers (or also notaries) be filed and archived separately.
In the event of a dawn raid, the target company would be well advised to avoid any aggressive behaviour towards members of the search team and to provide easy access to the premises to be searched. In addition, the destruction or concealment of evidence should be avoided in all circumstances, as such acts are criminally reprehensible. It is also recommended to refuse any hearing or statements of individuals without the presence of a lawyer. Finally, it will be necessary to rapidly assess whether a leniency application (see question 5) should be considered, in order to benefit from a possible remission of the fine.
4.7 What are the next steps in the cartel investigation following a dawn raid? What timeframe do these typically follow?
The Secretariat normally conducts hearings of the individuals concerned at relatively short notice (ie, within days of the dawn raid). The Secretariat then generally submits requests for information to the parties or third parties concerned. At the same time, data and documents containing possible professional secrets (eg, correspondence exchanged with lawyers or notaries), or of a purely private nature, are normally sorted out. In practice, the parties generally do not have immediate access to the complete file, since the Secretariat must first – in agreement with the parties concerned – expunge any business secrets contained in the documents seized. Depending on the complexity of the case, this phase of sorting and expunging documents may take several months.
4.8 What factors will the enforcement authorities consider in assessing whether cartel activity has taken place?
Cartel agreements based on written contracts or other kinds of formal agreements (eg, letters of intent) will in principle permit the enforcement authorities to assess their (un)lawfulness. However, in a significant number (if not the majority) of cases, cartel agreements are based on tacit (or at least more subtle) agreements on concerted practices between the undertakings concerned. The enforcement authorities must thus establish the real intention of the parties on the basis of other types of documents (eg, minutes of meetings and emails). In this context, the statements of the persons who intervene in the first few hours of the procedure will also weigh significantly in the assessment of the case.
4.9 In case of a finding of cartel activity, can the company seek to negotiate a settlement, plea bargain or similar resolution? If so, what is the process for doing so?
If the Secretariat considers that a restriction of competition is unlawful, it may, in accordance with Article 29 of the Cartel Act, propose to the company concerned an amicable settlement on such terms and conditions as would eliminate the restraints. The settlement must be formulated in writing and approved by the ComCo. Provided that the conditions below are met, the company concerned may, on its own initiative or on the proposal of the Secretariat, express its interest in reaching an amicable settlement. However, the company may not claim that the Secretariat should enter into negotiations or conclude such an agreement; the Secretariat has wide discretion in this respect.
In order for an amiable settlement to be validly concluded, the company concerned must be prepared:
- to take, of its own free will, measures to eliminate a restraint on competition deemed unlawful by the Secretariat;
- to cooperate with the Secretariat – in particular, by undertaking to refrain from producing voluminous memoranda and other petitions; and
- to waive any appeal procedure.
The conclusion of a friendly settlement is then considered by the cartel authorities to be the result of good cooperation and is rewarded by a reduction in fine. However, the amount of this fine reduction will depend on the stage of the proceedings at which the agreement is reached, as follows:
- beginning of the investigation: maximum 20%;
- intermediate stage: approximately 15%;
- end of the investigation: approximately 10%;
- after notification of the proposed decision: approximately 5%.
In addition, reference is made to the explanatory note dated 28 February 2018 issued by the Secretariat on the modalities for the conclusion of amicable settlements.
5.1 Is a leniency programme in place in your jurisdiction? If so, how does this function?
Yes. Undertakings which fully cooperate in the discovery and elimination of a hardcore restraint of competition within the meaning of Article 5, paragraphs 3 and 4 of the Cartel Act may have their sanction waived or reduced.
The conditions for obtaining full or partial immunity from a sanction are set out in Articles 8–14 of the Cartel Act Sanctions Ordinance (CASO). Accordingly, undertakings intending to benefit from the leniency programme must, among other obligations:
- submit spontaneously to the competition authorities all information and evidence at their disposal concerning the anti-competitive practice; and
- cooperate continuously, unreservedly and without delay with the authorities throughout the proceedings (Article 8, paragraph 2 of the CASO).
The Secretariat has issued an explanatory note dated 8 September 2014 on the leniency programme, in which the practice of the competition authorities is explained in detail.
5.2 What are the benefits of applying for leniency, both for the first mover and for subsequent applicants?
Pursuant to Article 8, paragraph 1 of the CASO, the first mover may be granted complete immunity from a sanction if:
- it reports its own participation in a restraint of competition within the meaning of Article 5, paragraphs 3 and 4 of the Cartel Act; and
- it is the first undertaking to provide information that enables the competition authorities to open an in-depth investigation under Article 27 of the Cartel Act or provides evidence that enables the competition authorities to establish an infringement of competition in accordance with Article 5, paragraph 3 or 4 of the Cartel Act.
All other undertakings may qualify for partial immunity from the sanction (ie, a reduction in the sanction) (Articles 12–14 of the CASO). The sanction can be reduced by up to 50%. The decisive factor here is the extent to which the company contributes to the success of the proceedings. If the voluntarily submitted information or evidence has not yet been submitted by other companies, it is generally considered more valuable. The sanction may be reduced by up to 80% if an undertaking voluntarily provides information relating to further infringements of competition (‘Bonus Plus'). This information or evidence must meet the conditions prescribed by Article 8, paragraph 1 of the CASO. The Competition Commission (ComCo) will decide on the amount of the reduction at the end of the procedure (Article 14, paragraph 1 of the CASO).
5.3 What steps does a leniency application involve? What timeframe do these typically follow?
An undertaking seeking immunity from sanction must demonstrate:
- its involvement in agreements or concerted practices with other undertakings;
- the object of the restraint of competition; and
- the effects the infringement produced on the market.
As outlined in question 5.2, there are two different types of cooperation which may lead to full immunity: cooperation which enables the ComCo to open an in-depth investigation and cooperation which enables the ComCo to establish a qualified infringement of the Cartel Act. In this second latter form of cooperation, immunity remains possible even if the ComCo already has enough information to initiate an investigation or even if an investigation has already been initiated. This means that immunity may still be granted as long as the ComCo does not possess sufficient evidence to prove the competition violation (ie, even during an ongoing dawn raid).
As the time factor plays a determining role, it is essential that the chronological order in which voluntary reports are filed with the enforcement authorities can be clearly established. In order to communicate its willingness to cooperate with the authorities as quickly as possible, an undertaking may first file a so-called ‘marker' – that is, a declaration that it will subsequently file a voluntary report. The Secretariat will confirm receipt of the application for the marker, indicating the date and time and setting a deadline for the undertaking to submit its voluntary report. The voluntary report may be submitted in writing or may even be placed or recorded orally at the Secretariat's premises. The time of filing of markers is decisive in determining the ranking of participants in the leniency programme; however, to be valid, the marker must be followed by a self-denunciation that satisfies the requirements of a full or partial waiver of the sanction.
5.4 What are the rights and obligations of the applicant during the leniency application and over the course of its cooperation with the enforcement authorities?
Any undertaking which files a voluntary report in accordance with Articles 8 and following of the CASO has a duty to cooperate during the entire procedure which goes beyond the usual obligation to cooperate in the usual enforcement proceedings (Article 8, paragraph 2 of the CASO). This duty encompasses, among other things, the willingness to:
- make statements during interviews pursuant to Article 42, paragraph 1 of the Cartel Act;
- respond to requests for information; and
- submit, voluntarily or upon request of the authorities, any evidence which is accessible to the undertaking.
In return, the undertaking has the right to have the filing of its voluntary report treated confidentially by the Secretariat. Confidentiality may be lifted only in the context of the right to access the file – which is specifically regulated – or if the undertaking waives its right to confidentiality, for example by publicly announcing that it has submitted a voluntary report. In any event, and even if the competition authorities give access to the voluntary report, the company's trade secrets must be preserved, in accordance with Article 25 of the Cartel Act.
5.5 Is the leniency programme open to individuals? Can employees or former employees benefit from a leniency application filed by their employer? Do the authorities operate a programme for individual whistleblowers separate to the leniency programme?
The leniency programme may apply directly to individuals only if they meet the definition of an ‘undertaking' pursuant to Article 2, paragraph 1bis of the Cartel Act (eg, an enterprise conducted in the form of a sole proprietorship). Moreover, Swiss legislation contains no special rules on whistle-blowers and does not provide a special regime for employees of an undertaking participating in a leniency programme.
5.6 Can leniency be denied or revoked? If so, on what grounds?
When a voluntary report is filed, the Secretariat will acknowledge receipt, specifying the date and time of its registration. In consultation with a member of the presiding body of the ComCo, it will then inform the reporting undertaking of the extent to which it regards the requirements for complete immunity from the sanction in accordance with Article 8, paragraph 1 of the Cartel Act to be fulfilled (see Article 9, paragraph 3 of the Cartel Act). The Secretariat will also inform the reporting undertaking of any additional information that must be submitted to fulfil the requirements set out in Article 8, paragraph 1 of the Cartel Act. Leniency may thus be denied or even revoked by the ComCo if the requirements set out in Article 8, paragraph 1 are not (or no longer) met. However, the ComCo will depart from the communication issued by the Secretariat pursuant to Article 9, paragraph 3 of the CASO only if it subsequently becomes aware of elements that preclude the full waiver of the sanction (Article 11, paragraph 2 of the CASO).
6 Penalties and sanctions
6.1 What penalties may be imposed in criminal proceedings on companies? What penalties may be imposed on individuals?
As discussed in question 2.3, the sanctions set out in the Cartel Act – in particular, in Article 49a – are essentially administrative in nature, albeit with a certain criminal character. These sanctions may be imposed only on undertakings within the meaning of Article 2, paragraph 1bis of the Cartel Act that have participated in illegal agreements within the meaning of Article 5, paragraphs 3 and 4 of the Cartel Act (‘hardcore restraints').
These sanctions must be strictly distinguished from the purely criminal sanctions provided for in Articles 54 and following of the Cartel Act, which are primarily aimed at individuals (organs, employees) acting on behalf of the undertaking. Thus, Article 54 stipulates that anyone who intentionally contravenes an amicable settlement or a final decision pronounced by the competition authorities (or respectively the appeal authorities) will be liable to a fine of up to CHF 100,000. In the context of unlawful competition agreements, Article 55 of the Cartel Act punishes violations of the obligation to cooperate with the enforcement authorities with a fine of up to CHF 20,000. In view of the very limited number of judicial decisions rendered in this respect, the (purely) criminal provisions of the Cartel Act play only a minor role in practice.
6.2 What penalties may be imposed in civil proceedings on companies? What penalties may be imposed on individuals?
The victims of competition law infringements can seek compensation for the damage they have suffered by applying to the civil courts (on this subject, see question 8). However, the Swiss cartel legislation does not provide for any other sanctions or penalties under civil law. As discussed in question 6.1, the sanctions imposed in cartel matters are primarily and essentially administrative in nature.
6.3 How are penalties in cartel cases determined? In deciding on the applicable penalties, will the enforcement authorities consider penalties imposed in other jurisdictions?
Article 49a of the Cartel Act is unquestionably the central provision of Swiss cartel law on sanctions for unlawful competition agreements. According to this provision, any undertaking that participates in an unlawful agreement pursuant to Article 5, paragraphs 3 and 4 of the Cartel Act (‘hardcore restraints') is liable to pay an amount of up to 10% of the turnover achieved in Switzerland during the last three business years. The specific calculation methods are further defined in the Cartel Act Sanctions Ordinance (CASO). The amount of the sanction is calculated based on the duration and gravity of the unlawful practices, while taking into account the presumed profit resulting from such practices (Article 2 of the CASO). In any event, the principle of proportionality must be observed when determining the sanction.
In concrete terms, the calculation of the final amount of the sanction takes place in several distinct stages. First, the maximum possible sanction in the case at hand is determined based on Article 7 of the CASO. Within the framework of the maximum sanction (Article 7 of the CASO), the basic amount of the sanction is then determined in accordance with Article 3 of the CASO; depending on the gravity and type of the infringement, this may amount to up to 10% of the turnover generated in Switzerland by the undertaking in the relevant markets during the last three business years. Finally, the amount thereby calculated is then increased or reduced taking into account the duration of the anti-competitive practice (Article 4 of the CASO) and any aggravating circumstances (eg, repeated infringements; achievement of particularly high profits) or mitigating circumstances (eg, immediate cessation of the unlawful conduct after the first intervention of the enforcement authorities; conclusion of an amicable settlement) within the meaning of Articles 5 and 6 of the CASO.
The concrete and final determination of the sanction is at the sole discretion of the Competition Commission (ComCo). The range of sanctions of 0% to 10% is very broad and thus requires a case-by-case assessment. In this context, it is therefore not excluded that the ComCo may also take into account a possible sanction imposed on the undertaking in another jurisdiction.
6.4 Can a defendant company pay the legal costs incurred by and/or penalties imposed on its employees?
Subject to possible conflicts of interest, a defendant company involved in cartel proceedings is basically free to assume the costs or possible fines imposed on its employees. However, such payment will occur on a purely conventional basis as part of the employer/employee relationship.
7.1 Can the defendant company appeal the enforcement authorities' decision? If so, which decisions of the authority can be appealed (eg, all decisions or just the final decision) and to which reviewing authority? What is the standard of review applied by the reviewing authority (eg, limited to errors of law or a full review of all facts and evidence)?
The decisions of the Competition Commission (ComCo) which close an in-depth investigation may be challenged within 30 days of notification by lodging an appeal with the Federal Administrative Court. As part of the appeal procedure, the Federal Administrative Court may review the ComCo's decision by examining whether:
- there has been a violation of federal law;
- the relevant facts have been ascertained inaccurately or incompletely; or
- the decision is inadequate.
The decision of the Federal Administrative Court may then be appealed to the Federal Supreme Court, also within 30 days of notification. The standard of review applied at this stage of the procedure is limited to questions of law. Grievances relating to the establishment of the legally relevant facts of the case are limited to arbitrariness.
7.2 Can third parties appeal the enforcement authorities' decision, and if so, in what circumstances?
Pursuant to Article 48 of the Federal Act on Administrative Procedure, a right of appeal may be accorded to a third party that:
- has participated or has been refused the opportunity to participate in proceedings before the lower instance;
- has been specifically affected by the contested ruling; and
- has an interest in the revocation or amendment of the ruling that is worthy of protection.
8 Private enforcement
8.1 Are private enforcement actions against cartels available in your jurisdiction? If so, where can they be brought?
Yes. Swiss law provides for civil actions in cartel matters; however, this aspect of cartel law has only very limited application in practice. Pursuant to Article 5, paragraph 1 of the Swiss Civil Procedure Code (CPC), civil actions concerning cartel law disputes must be brought before a court of sole cantonal instance. In the cantons of Aargau, Bern, St Gallen and Zurich, such actions must be brought before the commercial court; in the other cantons, before the court specifically designated by cantonal law.
8.2 Can private enforcement actions be brought against both companies and individuals?
Civil actions may be brought against both companies and individuals, provided that these meet the definition of an ‘undertaking' in accordance with Article 2, paragraphs 1 and 1bis of the Cartel Act and are liable for an unlawful restraint of competition.
8.3 Are class actions or other forms of collective action available in your jurisdiction?
Class actions are not provided for under Swiss law. As mentioned in question 3.4, consumer protection associations can participate in the investigation, but in principle lack the active legitimacy to conduct proceedings before civil courts.
8.4 What process do private enforcement actions follow?
In addition to the few procedural provisions contained in the Cartel Act, civil actions concerning cartel law disputes are governed by the law of civil procedure, more specifically the CPC.
8.5 What types of relief may be sought and what types of relief are most commonly awarded? How is the relief awarded determined?
Pursuant to Article 12 of the Cartel Act, a person who is hindered from entering or competing in a market by an unlawful restraint of competition may request:
- the removal or termination of the restraint;
- compensation for damages and moral harm; and
- repayment of unlawfully earned profits.
8.6 Can the decision in a private enforcement action be appealed? If so, to which reviewing authority?
Decisions of the court of sole cantonal instance can be challenged by means of a civil appeal to the Federal Supreme Court (Articles 72 and following of the Federal Act on the Swiss Federal Supreme Court), irrespective of the amount in dispute.
9 Trends and predictions
9.1 How would you describe the current cartel enforcement landscape and prevailing trends in your jurisdiction? Are any new developments anticipated in the next 12 months, including any proposed legislative reforms?
On 29 May 2019 the Federal Council issued its official message on the popular initiative "Stop the high price island - for fair prices (Fair price initiative)" and its indirect counter-proposal (the amendment of the Cartel Act). The initiative aims to strengthen the competitiveness of Swiss companies by guaranteeing freedom of supply in Switzerland and abroad. Although it shares the concerns raised by the initiative, the Federal Council is of the opinion that the measures proposed by the initiative go too far and could ultimately have negative side effects on the economy. The Federal Council has therefore proposed an indirect counter-proposal which provides for the introduction of the concept of ‘relative market power'. According to this approach, Swiss and foreign companies with relative market power would, under certain circumstances, be obliged to supply Swiss companies through foreign distribution channels.
10 Tips and traps
10.1 What would be your recommendations to companies faced with a cartel investigation and what potential pitfalls would you highlight?
Where a violation of antitrust law appears to be founded, companies confronted with a cartel investigation would be well advised to assess as soon as possible the opportunity of subscribing to the leniency programme, or even approaching the authorities with a view to reaching an amicable settlement, in order to reduce any possible sanction to a minimum. On the other hand, where the outcome of the proceedings appears less clear-cut, a strategy should be defined and adhered to, making use of the rights available to the parties to the proceedings. In all cases, and in view of the technical nature of the matter, recourse to antitrust law specialists is recommended.
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