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A tough battle is raging behind the scenes in Parliament. The subject is changes in antitrust legislation. Councilors of states and representatives of the business community face charges and accusations of abuse of power by an antitrust authority. It is about ideology and the question of whether companies should be able to reach agreement more easily on prices, sales areas, quantities and distribution contracts.
Cartels were allowed for a long time; they were part of the Swiss economy. The most famous was the Beer Brewers Cartel. It regulated which brand ended up in restaurants in which region. Then, during the economic crisis of the 1990s, it dawned on the economy that cartels were harmful. Those involved make guaranteed profits, competition is kept out of the market, innovation is hampered and prosperity is reduced.
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This article was first published in the paid service of Handelszeitung.ch. Blick+ users have exclusive access as part of their subscription. You can find more exciting articles at www.handelszeitung.ch.
In 1995, Parliament put an end to this. Cartels were prohibited in principle, but exceptions remained. It was not until 2004 that a bus catalog was added. Since then, the Comco has also been allowed to conduct raids and reward whistleblowers among cartel members in an lenient manner.
The case law was tightened in 2016. Since then, almost any agreement has been considered a crime, as in most industrialized countries. This is to the dismay of parts of the industry that want to restore the previous situation. Two FDP members of the Council of States join the battle: Olivier Français from Vaud and Hans Wicki from Nidwalden.
Anonymous accusations from two FDP councilors
Français advises the construction sector, which is often involved in cases. Wicki is on the board of directors of elevator manufacturer Schindler. Ten years ago, the successful company was sentenced to a cartel fine of 234 million francs for price fixing in the EU.
Français and Wicki slandered the Competition Commission (Weko) with anonymous accusations. In his most recent contribution to Comco, Français writes that the suspect and his company “are publicly exposed by (…) the lack of presumption of innocence, which may lead to the company not continuing its business activities and development. can”. He does not write down which cases he means.
Wicki sounds the same. In an attack, he claims that the Comco “blatantly violates the presumption of innocence.” A company is “condemned across the board” instead of the competition authority proving that it has actually damaged the national economy. He only gave a single example in the Council of States. The ski manufacturer Stöckli. He was convicted of conspiring with his dealers. They were not allowed to undercut each other’s prices. That’s why Wicki took on the case of a legally convicted person guilty of illegal price fixing.
Français also claims that “civil society is sharply criticizing the functioning of the Competition Commission”. He does not describe who this ‘civil society’ is. That doesn’t exist, except for a few antitrust lawyers who peddle their clients’ attitudes. On the sidelines of an event this summer, Français told Handelszeitung that he wanted to wipe out the Comco with this motion before he resigned.
Commercial politicians against the competition police
The Comco is chaired by 37-year-old lawyer Laura Baudenbacher. On Wednesday she had three Swiss steel traders robbed. The suspicion: price agreements for rebar. Such raids occur approximately every two months.
She rejects Wicki and Français’ allegations. She and her predecessors have often been successful in court in recent years. Even the opponents confirm this. The best-known case is the construction cartel from Graubünden. But the asphalt cartel from Ticino, the plumbers cartel and various gravel and concrete cartels were also in the news.
This success led to resistance. Those affected have organized themselves politically and started to defend themselves. The core behind this is Henrique Schneider, deputy director of the trade association. According to sources, he helped the FDP council members formulate these proposals.
With the help of Schneider and Français, Parliament has put forward a proposal that would weaken the current cartel ban. In concrete terms: Competitors who agree on prices, quantities or territories should go unpunished, as long as they do not significantly impede competition in terms of volume.
The consequence of such a new arrangement would be that cartel members could excuse themselves by saying that their product is not very important on the market or that the barrier to competition is not great. Or they can get away with the justification that an agreement was made but never implemented or undermined.
The competition police, the Comco Secretariat, would then have to prove, on the basis of market studies and extensive analyses, that customers and companies have suffered significant damage as a result of the agreement. The Comco had to provide such evidence earlier. However, because proving negative economic impacts is not an exact science, such ComCo market analyzes often led to fiascos in higher courts.
The Comco has been exempt from this since 2016. The Federal Court decided this in a groundbreaking case – it concerned Elmex toothpaste. Since then, competition law has applied what is normal in traffic control: a radar image is sufficient to demonstrate that a vehicle driver was driving too fast. The police do not have to prove that excessive speed endangers lives.
The same applies to the competition: ComCo only has to prove that a firm agreement has taken place. But it does not have to prove that the cartel has harmed competition. In the case of a hard agreement, this is legally assumed. Since then, hard cartels have been considered punishable without any ifs or buts. This has significantly increased the efficiency of the Comco – much to the chagrin of those affected.
A campaign by the trade association
Schneider, himself an antitrust judge at ComCo from 2016 until last September, gave this anger a platform. One person who has used this platform is Valais plumbing entrepreneur Jean-Pierre Bringhen. In the Gewerbezeitung he described the search as traumatic. “About eight people, accompanied by two police officers, literally attacked me, searched every corner of the company, seized everything they could and held me until the late hours of the evening.” He was treated like a criminal. The buses were “exorbitant” and threatened his business. Where it does not achieve its goal “as in our case”, the Comco tries to “accumulate guilt from many assumptions”.
In 2015, the Comco, which means ‘order’, ruled. The sanitary ware wholesaler, the association and its members agreed, among other things, to set gross prices. Fines were imposed. Those affected, including Bringhen, appealed. Now they have been waiting for a ruling from the Federal Administrative Court for eight years.
Schneider, influenced by Bringhen, henceforth spoke derogatorily about the work of his agency. The conflict culminated in a comparison to a dictatorship, with the ComCo having virtually unlimited powers. Guy Parmelin intervened. The Handelszeitung reported about it. Schneider resigned in the summer of this year, officially for other reasons.
Five former presidents enter parliament
Next Tuesday, the responsible committee of the Council of States will consider the matter for the second time. A month ago, during the first consultation, there was a chaos of opinions and terminology, according to one person involved. Now everyone is confused as to whether there is actually a need for revision. The outcome is uncertain.
One reason is the five previous Comco presidents. You warned of a revision in a sharp NZZ article. “Now certain circles are apparently trying to reverse course with the latest revision and open a new line of defense for the cartels,” say the authors Pierre Tercier, Roland von Büren, Walter Stoffel, Vincent Martenet and Andreas Heinemann. This is extremely dangerous: “Even with hard cartels, one would expect lengthy legal proceedings on issues that have in fact been resolved a long time ago. The resulting legal uncertainty could open the door to cartelists and market isolators.”
Current President Baudenbacher puts it even more sharply: “If the revision of the law, as requested by business associations and lawyers, is successful in parliament, this would promote and encourage the formation of cartels.”
Wicki and Français did not respond to questions from the Handelszeitung at the time of going to press.
Source:Blick
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