Landmark Decision.

The Appeal Commission for competition matters reversed the practice of the Swiss Competition Commission pursuant to which a foreign merger was reportable to the Swiss authorities as soon as each of two undertakings concerned had sales beyond 100 millions Swiss Francs in Switzerland in the year preceding the merger. An appeal is pending against the decision of the Appeal Commission.

Under Swiss competition rules a concentration is reportable if it has "effects" on the Swiss market (Article 2 of the Competition Act) and if it reaches the following thresholds in the year preceding the concentration (Article 9 of the Competition Act):

  • the aggregate world-wide turnover of the undertakings concerned amounted to at least 2 billions Swiss Francs or the aggregate turnover of the undertakings in Switzerland amounted to at least 500 millions Swiss Francs; and

  • the aggregate turnover in Switzerland by each of at least two of the undertakings concerned amounted to at least 100 millions Swiss Francs.

According to a well-established practice, the Swiss Competition Commission held that a "foreign" transaction had "effects" on the Swiss market as soon as the "Swiss" thresholds were met, i.e. as soon as each of two undertakings concerned had a turnover beyond 100 millions Swiss Francs in Switzerland, irrespective of whether the undertakings had a presence in Switzerland through subsidiaries or branches.

The Appeal Commission reversed this practice of the Swiss Competition Commission in a landmark decision concerning the imposing of fines on two undertakings for setting up a concentrative joint venture prior to the approval of the Swiss Competition Commission. The Appeal Commission held that sales beyond the Swiss thresholds were not sufficient to show that the concentration had "effects" on the Swiss market. The test is whether the effects of the concentration in Switzerland are able to influence competition in Switzerland. This is not the case where the only ties of the concentration with Switzerland consist of sales of non competing products (no overlaps in the relevant markets) in Switzerland, even if such sales are beyond the Swiss thresholds or if the undertakings concerned have subsidiaries or branches in Switzerland in other markets than those concerned by the concentration.

An appeal has been brought against this decision before the Swiss Supreme Court.

The decision of the Appeal Commission is not published yet.

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