The Swiss Competition Commission is consulting stakeholders on its revised Communication concerning the Competitive Assessment of Vertical Agreements (“the Swiss Vertical Communication”) and the accompanying Explanatory Note.
The review of the Communication and the Explanatory Note was triggered by the European Commission’s review of the EU Vertical Block Exemption Regulation and the Vertical Guidelines. As in the EU, the treatment of online platforms is of particular concern. In addition, the Swiss Competition Commission wishes to incorporate new developments that have taken place in Switzerland.
According to the Competition Commission, the purpose of the review is to ensure an alignment with EU competition rules and regulations, in the interest of open markets and legal certainty. However, on closer inspection, the Swiss regime is not completely aligned with EU law and practice. In comparison to the European Commission and the EU Courts, the Competition Commission and the Swiss courts Swiss have taken a stricter line on certain aspects. Generally, it is not uncommon for the Swiss authorities to diverge from EU precedents, with a certain tendency for a “Swiss finish”. For these reasons, companies with international operations need to take account of Swiss specifities, and they cannot simply assume that a distribution system that has been developed for the EU market will be compliant with Swiss competition rules and regulations.
The following features of the proposed revised Swiss Vertical Communication and Explanatory Note are particularly worthy of a mention.
- The Swiss Competition Commission has effectively removed the safe harbour for non-binding price recommendations, in line with a precedent set by the Swiss Federal Tribunal in a matter concerning the pharma company Pfizer. According to the proposed new rules, a supplier issuing non-binding price recommendations would now be considered to be creating the conditions for a tacit price alignment with its dealers. Consequently, the supplier runs the risk of being accused of enganging in unlawful concerted behaviour with the dealers. Whether or not such concerted action has occured will be determined on a case-by-case basis, taking individual circumstances into account, including the intensity at which the recommended prices were being communicated. A non-binding price recommendation may further be deemed to be unlawful, when accompanied by threats or incentives rendering it de facto binding.
- The Competition Commission further proposes introducing specific rules for non-Swiss suppliers that supply third party products and services to intermediate Swiss distributors (“general importers”) for distribution to dealers in Switzerland. According to the Competition Commission, non-Swiss suppliers may agree with their Swiss general importers that they will refer any unsolicited customer requests to them when this concerns requests for the suppliers’ own products. However, they may not do so for third-party products that are being resold by the supplier. This proposal takes note of a precedent that was set by the Swiss Federal Tribunal in a matter concerning the French publisher Flammarion.
The consultation is open until 2 September 2022.