On 17 March 2023, the Federal Council defined the next steps for the partial revision of the Swiss Cartel Act (CartA). A dispatch for a revision draft will be presented by mid-2023. At the same time, the Federal Council has begun initial work on a reform of the competition agencies.
Draft for the partial revision of the Swiss Cartel Act by mid-2023
After the Federal Council had published the consultation draft for the partial revision of the Swiss Cartel Act (CartA) (in German only) on 24 November 2021, the Federal Department of Economic Affairs, Education and Research (EAER) initiated a public consultation period that was completed by 11 March 2022. On 17 March 2023, the Federal Council published the results of the consultation (in German only) and instructed the EAER to present a dispatch on the draft revision by mid-2023.
While it is expected that the Federal Council and Parliament will likely make changes to the details of the consultation draft, the proposed legislation includes in particular the following amendments, which are intended to improve the effectiveness of the Swiss Cartel Act and address three parliamentary requests:
At the heart of the revision is the modernization of the Swiss merger control regime. The change from the current qualified market dominance test to the so-called "significant impediment to effective competition" test (SIEC test) aims at bringing the standard of review for mergers into line with international practice. The main difference between the qualified market dominance test and the SIEC test is the threshold for intervention. The SIEC test provides the basis for prohibiting or imposing conditions and obligations on mergers if they would result in a significant impediment to effective competition. Under today's applicable test, this is only possible if a merger is found to completely eliminate effective competition by creating or strengthening a dominant position.
The proposed amendments are also intended to improve civil antitrust law and the consultation procedure (Widerspruchsverfahren). Last but not least, three parliamentary motions are to be implemented – these relate in detail to:
(i) The simplification and acceleration of competition lawsuits by introducing procedural rules and party compensation in first-instance proceedings (Motion 16.4094 Fournier);
(ii) The reintroduction of the effects control for hardcore agreements under Article 5 CartA in response to the criticized Gaba case law of the Federal Supreme Court, so that both qualitative and quantitative effects on competition are to be taken into account (Motion 18.4282 Français ); and
(iii) The inclusion of the constitutional presumption of innocence in the CartA and especially the strengthening of the principle of ex-officio investigation (Motion 21.4189 Wicki). This last motion is not yet addressed in the current consultation draft.
The Federal Council launches work on an institutional reform
The published results of the consultation on the partial revision show that the proposed changes are essentially uncontroversial. However, widely supported demands have emerged criticizing the lack of a reform of the competition authorities, i.e. of the Competition Commission (ComCo) and its secretariat. The Federal Council is taking this concern into account and has therefore instructed the EAER to draft a proposal for a corresponding reform by the first quarter of 2024. The institutional reform will be driven forward in parallel and separately from the ongoing partial revision.
Regarding the current partial revision of the Swiss Cartel Act, for the time being, it remains to be seen what amendments the Federal Council will make to its draft in its dispatch by mid-2023 and how Parliament will then vote on it. The final provisions are expected to come into force earliest in 2024.
With regard to the ongoing institutional reform, the EAER will examine various reform options by the end of 2023 and present such to the Federal Council by the beginning of 2024.
For questions regarding the ongoing revision of the Swiss Cartel Act, please do not hesitate to contact us. We look forward to keep you informed of further developments – as soon as the Federal Council’s dispatch is published, we will be happy to provide you with an updated overview of the proposed amendments.