Competition Switzerland - Q 1 2012

Author:Mr Silvio Venturi and Pascal Favre
Profession:Tavernier Tschanz


Competition Commission launches an investigation into possible manipulation of the LIBOR and TIBOR reference rates

On February 3, 2012, the Competition Commission launched an investigation into possible manipulation of the London interbank offered rate (LIBOR) and its Japanese equivalent TIBOR against the two major Swiss banks (UBS and Credit Suisse), ten foreign financial institutions (Bank of Tokyo-Mitsubishi UFJ, Citigroup Inc., Deutsche Bank Aktiengesellschaft, HSBC Holdings plc, JP Morgan Chase & Co., Mizuho Financial Group Inc., Rabobank Groep N.V., Royal Bank of Scotland Group plc, Société Générale S.A., Sumitomo Mitsui Banking Corporation) and some other financial intermediaries.

The investigation concerns how the banks set LIBOR and TIBOR, the key reference interbank lending rates for vast quantities of financial instruments set in London and Tokyo. LIBOR and TIBOR are derived from rates banks charge each other. Both are used widely as international benchmarks.

The Competition Commission announced that the information had come to light following an application under its leniency programme, suggesting a whistleblower may have prompted the inquiry. Such information indicated that collusion between derivative traders might have influenced the LIBOR and the TIBOR reference rates; market conditions regarding derivative products based on these reference rates might have been manipulated too.

The Competition Commission is focusing on the impact in the Swiss market. Other antitrust regulators probing LIBOR rates include the U.S. Securities and Exchange Commission, the U.S. Commodity Futures Trading Commission, Japan's Financial Supervisory Agency, the U.K. Financial Services Authority, and European Union regulators.

Merger Control

Competition Commission approves Orange Switzerland acquisition by Apax

On February 17, 2012, the Competition Commission cleared the contemplated acquisition of Orange Switzerland by Apax Partners LLP. The preliminary investigation did not reveal any indication that the contemplated acquisition would create or strengthen a dominant position of any of the network providers in the Swiss mobile telecommunication market.

Swisscom, Sunrise and Orange are the three major market players on the Swiss mobile telecommunication market. The preliminary investigation revealed that the acquisition of Orange Switzerland by the UK private equity investment firm Apax Partners LLP does not change the present...

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