Competition Update Switzerland - Q4 2008

Author:Mr Silvio Venturi
Profession:Tavernier Tschanz
 
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INVESTIGATIONS

Swiss Supreme Court acknowledges limited privilege for

in-house solicitors

On 28 October 2008, the Swiss Supreme Court handed down an

important ruling in which it extended in some way the scope of

legal professional privilege to communications between parties and

their in-house solicitors in the context of Swiss competition law.

The Swiss Supreme Court confirmed the view, already expressed by

some commentators, according to which privilege extends to protect

internal communications involving in-house solicitors from

disclosure during competition investigations by the Federal

Competition Commission (FCC), provided that such communications

have not been made available by the company's corporate bodies

to other persons within the company and have been subject to steps

by the solicitor concerned to keep the information under his

control. That protection only applies to communications with

in-house "solicitors", which is deemed to exclude lawyers

having not completed a bar exam.

In contrast, the Swiss Supreme Court refused to extend the scope

of privilege to correspondence and advice from off-counsels,

whenever such correspondence is kept in the company's

premises.

The power to order house searches and seizures is one of the

substantial amendments of the Competition Act of 1 April 2004

(ACart). Under this investigative power, the Secretariat of the FCC

conducted its first dawn raids in 2006 and 2007. However, one issue

that remained to be clarified was the protection of documents

subject to professional privilege during house searches. Based on

precedents in criminal proceedings, the Secretariat considered that

privileged documents are excluded from seizure, provided that they

relate to the current investigation; the Secretariat was also of

the opinion that in-house lawyers were not subject to lawyers'

professional secrecy.

Off-counsels and their clients will no doubt be disappointed at

the Swiss Supreme Court's refusal to extend the scope of legal

privilege to correspondence held by the client in the context of

Swiss competition law. However, the Swiss Supreme Court's

findings in respect of the procedure to be followed by the FCC

during an investigation will provide some comfort.

CARTELS

Unlawful agreements to be held null and void

In a decision dated 12 June 2008, the Swiss Supreme Court

confirmed the view of many commentators that unlawful agreements

under the ACart are, in principle, entirely null and void. The

Swiss Supreme Court also ruled that, if either party has obtained

any service or other benefit from the other on the basis of such an

agreement, then the beneficiary shall make restitution to the

benefactor in accordance with the unjust enrichment rules of the

Swiss Code of Obligations.

FCC opens investigation against members of the

perfumery industry

On 1 December 2008, the FCC opened an in-depth investigation

against the Geneva-based Association of Manufacturers and Suppliers

of the Cosmetic and Perfumery Industry (ASCOPA) for possible price

fixing. Members of ASCOPA include, amongst others, Chanel SA

Genève, Clarins SA, L'Oréal Produits de Luxe

Suisse SA, Parfums Christian Dior AG and Coty (Schweiz) AG.

The FCC said it had received a complaint that pricing

information could have been exchanged among members of ASCOPA.

The investigation has to show whether the sharing of information

between ASCOPA members has an impact on the competitiveness of the

members and whether it may constitute an unlawful agreement under

the ACart.

FCC opens investigation against distributors of door

components

On 8 December 2008, the FCC opened an investigation against

distributors of doors components (doorknobs, hinges, locks, etc.).

Those undertakings are suspected of having concluded agreements on

prices, discounts and price conditions. The investigation has to

show whether such agreements between distributors actually existed

and what effects they may have in the Swiss market.

In July 2007, the FCC had already opened an investigation in the

field of hardware for windows, doors and gates. During this

procedure, information on a new cartel has been brought to the

attention of the competition authorities. Under the ACart, if

undertakings voluntarily provide information or evidence regarding

a second, still-hidden, hard-core cartel, they are likely to enjoy

a reduction of fines by up to 80%.

FCC conducts searches and opens investigation

against undertakings active in the sanitation, heating and air

conditioning sectors

On 16 December 2008, the FCC opened an investigation against

several undertakings active in the field of sanitation, heating and

air conditioning products. Following a self-denunciation, the FCC

conducted searches and found indication that the undertakings

concerned may have exchanged information on prices, contemplated

price increases, discounts and sales turnovers for various

products.

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