Reporting Period January 02-March 02: Enforcement Policy & Legislative Developments

Competition Act. On November 7, 2001 the Swiss Federal Council submitted for parliamentary debate a draft amending the Competition Act as to the following aspects†:

Direct Sanctions. The FCC should be entitled to impose (administrative) fines on undertakings, which can reach up to 10†% of the turnover achieved in Switzerland during the last three financial years, in case of participation in "hardcore" cartels (price fixing, customer or market sharing) and abuse of dominant position (see also 2000/3 and 2001/1 reports). In its report on the draft law, the Swiss Federal Council reiterated the opinion according to which fault is not a condition for imposing sanctions; this is in contradiction with the arguments developed by the Appeal Commission in its latest decision in the Merial case (see Administrative and judicial decisions hereinafter). Further, a system of preliminary notification of possibly unlawful agreements and practices is provided for in order to permit undertakings to avoid fines in cases where the FCC holds, after investigation, that the agreement or practices are unlawful. In addition, the FCC should be entitled to reduce or not to impose fines when cooperation with a hardcore cartel member allows the cartel to be discovered or suppressed (leniency programme).

Notification Thresholds. The thresholds for concentrations in the media sector would be removed (see also 2001/3 report). In order to protect the media diversity, Article 9 (2) of the current Competition Act provides that a concentration in the media sector must be notified if the turnovers of the undertakings concerned are as low as 1/20 of the thresholds applicable to other sectors. If the draft law is passed, concentrations in the media sector will be subject to the "normal" thresholds. As to banks and other financial intermediaries, the calculation of the thresholds would be based, not on turnover, but on gross income. For insurance companies, the calculation would be based on the total value of annual gross premiums.

Other Important Amendments. Unlike the initial draft, the Swiss Federal Council has given up modifying the composition of the FCC. Therefore, the FCC should still comprise a majority of independent experts. It would, however, be entitled to appoint only one vice-president and thus consist of only two chambers. Further, the following areas would be subject to amendment: (1) Pursuant to an order of a member of the FCC's presiding body, the competition authorities would be entitled to order searches and seize documents. The Federal Act on Administrative Criminal Law would apply to such investigative measures in order to offer a better protection of the undertakings' rights. (2) In order to clarify uncertainties connected with the current legislation, the power of the FCC and the Secretariat to receive fees for their investigations, expert advices, and other services would be ruled on in a specific Ordinance of the Swiss Federal Council. (3) In conformity with Article 170 of the Swiss Federal Constitution, the efficiency of Competition Law - in particular its ability to prevent damaging restraints of competition - would be subject to (systematic and scientific) evaluation. (4) As a transitory rule, no direct fines could be imposed if undertakings notify or suppress their unlawful restraints within...