New competition boss takes aim at cartels

The new president, Walter Stoffel, will crack down on cartels Keystone

The new president of Switzerland's Competition Commission is stepping up pressure on cartels, accused by consumer groups of rigging prices and harming competition.

Walter Stoffel, who took over the post on January 1, has reiterated calls for reforms to the cartel law, which would play a pivotal role in busting price fixing.

Speaking during the Commission’s annual press conference, Stoffel said the reformed law – currently making its way through parliament – would use a stick and carrot approach by encouraging companies involved in a cartel to inform the authorities.

The law will also give the Commission greater power to impose sanctions on companies found to be abusing their dominant market position.

“[The leniency reforms] mean that a cartel would have a much harder life, even at the start because it knows it cannot count upon the solidarity of each member,” Stoffel told swissinfo.

“[It’s] a way to destabilise a cartel because it means that the companies which are not ring leaders are more easily inclined to step out and [furnish us with information].”

Cartels operating in fields as varied as cable networks and car importing could come under pressure under the new law, Stoffel says.

“The US introduced [similar reforms] in 1993… and up to 40 cartels were discovered by this means,” he continues. “There is no reason to believe that it is different in our country.”

Cheaper living

Stoffel also believes that reforms would help to bring down the cost of living in Switzerland.

A new study comparing prices shows Switzerland remains the most expensive country in Europe. Stoffel says part of the problem can be attributed to the strength of the Swiss franc, but adds that the exchange rate cannot account for why prices are 40 per cent higher than in neighbouring countries.

Lack of competition – and by association the existence of cartels – also play their part, he says.

“We really see a problem in these price differences which continue to be high even though the production indices went down in the past ten years. There are several reasons for that and one of those is competition law – and this is where we have to intervene.”

As well as the new law, Stoffel hopes that increased staffing levels – from 55 to 70 permanent employees – and an annual budget of SFr7 million will also give the Commission more clout.

Independent man

Stoffel’s appointment as the head of the Competition Commission may go a long way to countering criticism from consumer groups that the authority has been run by those with vested interests.

Stoffel, a law professor at Fribourg University, has no links to business unlike his predecessor, Roland von Büren, who sat on the board of the Swiss bank, Valiant, and had to exclude himself from investigations into the banking sector.

“It’s important…that there are as many independent experts as possible,” Stoffel said. “Of course, it’s also good [to have a balance] and that’s why we also have people with practical experience representing other fields of the economy.”

swissinfo, Jonathan Summerton and Vanessa Mock

Key facts

Walter Stoffel took over from Roland von Büren on January 1, 2003.
Stoffel is a law professor at the University of Fribourg.
The Commission’s permanent staff has been increased from 55 to 70 for 2003.
Proposals to reform to the cartel law have already passed through both the House of Representatives and the Senate and are due to be presented to parliament again this year.
A recent survey shows that Switzerland is the most expensive country in Europe with price differences as high as 40 per cent.