Competition Switzerland - Q 3 2011

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

On July 11 2011, the Competition Commission ("Comco") closed its investigation against Electrolux AG and V-Zug AG in connection with restrictions on online retailing of household appliances (white goods) by reaching an amicable settlement. The Comco came to the conclusion that the prohibitions on sales via online stores are in principle unlawful and that Internet sales should only be restricted under some very strict conditions. This procedure allowed the Comco to establish guidelines on restrictions to online retailing, drawing on the practice of the European Commission1 and certain member states' national authorities2. The decision also provides guidance on Comco's practice in relation to selective distribution systems.

Content of the amicable settlement

The investigation opened on September 15 2010 was directed against Electrolux AG and V-Zug AG. Electrolux AG had completely forbidden its distributors (be they members of its selective distribution network or not) from selling household appliances online; as for V-Zug AG, it was imposing various restrictions on its distributors regarding such sales. Based on an amicable settlement entered into with the Comco at the end of the investigation procedure, Electrolux AG and V-Zug AG made a commitment to allow retailers who are members of their selective distribution network to trade online, and also (in principle) to do so under a different domain name from the one they use for their physical sales points. The Comco however authorised Electrolux AG and V-Zug AG to impose specific qualitative requirements on online retailing and to oblige their resellers to simultaneously run a physical sales point. The Comco also agreed that Electrolux AG and V-Zug AG may oblige their approved resellers to set up their website so as to make sure their contact details (company name and full address) as well as the addresses of their physical points of sale clearly appear on it and at first glance.

The reasoning of the Comco

The Comco considered that the bans imposed by Electrolux AG and V-Zug AG amounted to unlawful "agreements" affecting competition, despite the fact that such bans could appear as being the result of measures unilaterally imposed by these two manufacturers. As a matter of fact, it is not necessary under Swiss law to have a binding agreement between the parties involved in order to conclude to the existence of an "agreement affecting competition" (cf. Article 4 para. 1 ACart); it is sufficient to prove the existence of some sort of – conscious and intended – cooperation that may objectively affect competition on the market. In this respect, the Comco highlighted the fact that the ban on online sales announced by Electrolux AG and V-Zug AG, if it had been implemented, would have been abided by the "mixed" resellers (that is to say those who are both trading on the Internet and selling goods in physical points of sale), since their refusal to respect the...

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