Philipp E Zurkinden, Bernhard C Lauterburg, Andrea Schütz and Marino Baldi1
Introduction
Swiss competition law
Swiss competition law is primarily governed by the Federal
Law on Cartels and other Restraints of Competition
(LCart).2 The LCart is primarily enforced by the
Competition Commission (ComCo) whose decisions can be appealed to
the Federal Administrative Court and the Federal Supreme Court.
Civil courts play only a marginal role in the enforcement of the
LCart due to procedural hurdles. The purpose of the LCart is to
prevent harmful economic or social effects of cartels and other
restraints of competition and for this purpose sets out behavioural
and structural rules. It applies to anticompetitive practices that
have an effect in Switzerland, even if they originate in another
country. The current LCart has been in effect since 1 July 1996 and
has twice been substantially amended (in 2004, with the
introduction of direct sanctions and the precision of the market
dominance definition, and in 2022, with an extension of the control
of abusive conduct in Swiss competition law to companies with
relative market power).
The LCart has largely been inspired by and rests on the same premise as EU competition law (i.e., Articles 101 and 102 of the Treaty on the Functioning of the European Union (TFEU) as well as certain secondary legislation). As it is in the EU, Swiss merger control is based on a preventive notification system. It is therefore common practice in Switzerland to look at pertinent EU precedent and guidelines.
In substance, the LCart rests on three pillars.
- It provides that agreements that significantly restrict competition in a market for specific goods or services and that are not justified on grounds of economic efficiency, and all agreements that eliminate effective competition, are unlawful.3 For certain types of agreements, hardcore agreements, the LCart presumes they eliminate effective competition.
- The LCart provides that dominant undertakings and undertakings with relative market power behave unlawfully if they, by abusing their position in the market, hinder other undertakings from starting or continuing to compete, or disadvantage trading partners.4
- The LCart requires that planned concentrations of undertakings must be notified to the ComCo before their implementation if the undertakings concerned exceeded certain turnover thresholds in the financial year preceding the concentration.5
Life sciences regulation
The field of life sciences is heavily regulated in
Switzerland. Various laws and regulations at federal and cantonal
level interact to create a framework that promotes the development
and spread of new technologies and minimises the risks associated
with them. It would be beyond the scope of this chapter to
enumerate all relevant laws.
The Therapeutic Products Act (TPA) is particularly relevant.6 The purpose of the TPA is to protect human and animal health and to guarantee that only high quality, safe and effective therapeutic products (medicinal products and medical devices) are placed on the market. The TPA applies to the handling of therapeutic products, narcotics that are used as therapeutic products and therapeutic treatments such as gene therapy insofar as they directly relate to therapeutic products.
The provisions of the TPA are specified in various ordinances (e.g., the Medicinal Products Licensing Ordinance,7 the Ordinance on Medical Devices (MedDO)8 and the Ordinance on In Vitro Diagnostic Medical Devices (IvDO)).9
The Epidemics Act (EpidA)10 has gained increasing importance recently as a result of the covid-19 pandemic. This Act regulates protecting people against communicable diseases and provides for the measures required to do so. On the basis of the EpidA, various new implementing regulations with limited validity have been adopted (e.g., Ordinance 3 on Measures to Combat the Coronavirus).11 This Ordinance serves to ensure Switzerland's capacities to manage the pandemic, particularly to provide the population with adequate care and a sufficient supply of essential medical goods.
Behavioural control
Unlawful agreements
Agreements affecting competition are binding or
non-binding agreements and concerted practices between undertakings
operating at the same or at different levels of production that
have a restraint of competition as their object or
effect.12 Pursuant to Article 5(1) of the LCart, these
agreements are unlawful if they significantly restrict competition
in a market for specific goods or services and are not justified on
grounds of economic efficiency or they eliminate effective
competition.
The anticompetitive effects of an agreement need not arise in the market in which it was concluded. The LCart presumes that certain types of agreement eliminate effective competition:
- agreements between actual or potential competitors to directly or indirectly fix prices, to limit the quantities of goods or services to be produced, purchased or supplied, or to allocate markets geographically or according to trading partners;13 and
- agreements between undertakings at different levels of the production and distribution chain regarding fixed or minimum resale prices, and agreements contained in distribution contracts regarding the allocation of territories to the extent that sales by other distributors into these territories are not permitted.14
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Footnotes
1. Philipp E Zurkinden is a partner, Bernhard C Lauterburg is counsel, Andrea Schütz is an associated partner and Marino Baldi is of counsel at Prager Dreifuss AG.
2. SR 251. The competition law system is complemented by the Law against Unfair Competition (SR 241), the Federal Law on the Internal Market (SR 943.02) and the Federal Law on Price Surveillance (SR 942.20).
3. Article 5(1), Federal Law on Cartels and other Restraints of Competition (LCart).
4. id., Article 7(1).
5. id., Article 9(1).
6. SR 812.21.
7. SR 812.212.1.
8. SR 812.213.
9. SR 812.219.
10. SR 818.101.
v11. SR 818.101.24.
12. Article 4(1) LCart.
13. id., Article 5(3).
14. id., Article 5(4).
15. Marino Baldi, 'Zur "Grundsätzlichkeit" der Bundesgerichtsurteile GABA und BMW', AJP 2018, pp. 68, 71.
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.
