Federal Court approves Swisscom's complaint against Weko

The Federal Supreme 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 over CHF 7 million for a violation of antitrust law in a tender for Swiss Post.

The highest court of instance overturned a ruling by the Federal Administrative Court, which had largely confirmed the decision of the Competition Commission. According to the Federal Supreme Court ruling published on Thursday evening, Swisscom did have a dominant market position when it was awarded the contract for a Swiss Post network.

However, it did not impose unreasonable prices on either its competitor Sunrise or Swiss Post. In both cases, the element of enforcement was missing. According to the Federal Supreme Court, Swisscom acted 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 hammer price was the result of negotiations and was therefore not unilaterally determined by Swisscom. Apart from this, the Federal Court found that there was no element of unreasonableness, as the award price and Swisscom's profit margin were not to be regarded as excessively excessive. Finally, there was also no abusive behavior 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 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 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 rejected the main points of Swisscom's appeal against this, but reduced the fine to CHF 7.5 million.

With the margin squeeze, dominant companies cut the profit margins of competitors in a downstream market in which the competition sells its products. (SDA)

(judgment B-8386/2015)

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