Swiss Federal Court upholds Swisscom appeal in anti-trust case

Swisscom demonstrated fair conduct, according to the Federal Court. Keystone/Gaetan Bally

The Swiss Federal Court has upheld an appeal by telecommunications provider Swisscom against a decision by the Competition Commission (ComCo).

In 2015, the Competition Commission had fined Swisscom more than CHF7 million ($7.7 million) for an anti-trust violation relating to a tender for Swiss Post. 

The country’s highest court overturned a judgement by the Federal Administrative Court, which had largely upheld the Competition Commission’s decision. According to the Federal Court judgement published on Thursday evening, Swisscom did indeed have a dominant market position when it won the bid for a Swiss Post network. 

However, the court found that Swisscom did not impose unreasonable prices on either its competitor Sunrise or Swiss Post. In both cases, the element of coercion was missing. According to the Federal Supreme Court, Swisscom behaved correctly when setting prices for wholesale products, on which Sunrise was dependent. Furthermore, it was not proven that the prices were unreasonable or grossly excessive. 

In the case of Swiss Post, the contract price was the result of negotiations and was therefore not determined unilaterally by Swisscom. Apart from this, the Federal Court found that there was no element of unreasonableness, as the contract price and Swisscom’s profit margin could not be considered excessive. Finally, there was also no abusive behaviour on the part of Swisscom in the sense of a margin squeeze vis-à-vis Sunrise. 

In 2008, Swiss Post invited tenders for the construction and operation of a wide area network (WAN) for its approximately 2,300 locations. Swisscom was awarded the contract. Sunrise, which lost out, filed a complaint with the Competition Commission. The ComCo came to the conclusion that Swisscom had violated the Swiss Cartel Act by abusing its dominant market position. 

Specifically, the Competition Commission accused Swisscom of imposing unreasonable prices on Sunrise and Swiss Post as well as a margin squeeze on Sunrise. The Competition Commission imposed a fine of CHF 7.9 million for this. The Federal Administrative Court dismissed the main points of Swisscom’s appeal, but reduced the fine to CHF 7.5 million. 

With margin squeezes, dominant companies cut the profit margins of the competition in the downstream market in which the competition sells its products. 

Adapted from German by DeepL/kc

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