Prohibitions Of Parallel Imports Into Switzerland Generally Unlawful – No Need To Show Actual Effects

Author:Dr. Mani Reinert
Profession:Bar & Karrer
 
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The Swiss Federal Supreme Court (FSC) has upheld a fine of CHF 4.8 million against Col- gate-Palmolive Europe Sàrl (Colgate-Palmolive) for barring its licensee Gebro Pharma GmbH (Gebro) from making parallel exports out of Austria. A 3-2 majority of the FSC ruled that this export ban would infringe the Swiss Act on Cartels (CA) regardless of whether there would have been actual appreciable effects in Switzerland and regardless of quantitative aspects such as the degree of interbrand-competition.

Facts

Colgate-Palmolive had obliged its Austrian licensee Gebro not to export Elmex toothpaste products out of Austria into any other country.

The Swiss Competition Commission (ComCo) held that this export ban would be unlawful under Swiss competition law and imposed a fine of CHF 4.8 million on Colgate-Palmolive. ComCo held that the export ban did significantly restrict competition in Switzer- land and that it could not be justified on grounds of economic efficiency.

Comco's decision was upheld by the Federal Admin- istrative Court (FAC). The parties appealed the FAC-judgment. The FSC, however, rejected the appeal (see reasoned judgment of 28 June 2016, 2C_180/2016, published 21 April 2017 on http://www. bger.ch/index/juridiction/jurisdiction-inherit-template/ jurisdiction-recht/jurisdiction-recht-urteile2000neu. htm).

Appreciable effects not necessary for jurisdiction of ComCo

The parties first argued that ComCo had not estab- lished that the export ban had had appreciable effects in Switzerland; as a result, ComCo would not have jurisdiction.

The FSC rejected this argument. The FSC held that potential effects in Switzerland would be sufficient for ComCo to have jurisdiction. The FSC stated that the export ban would prohibit exports of Gebro out of Austria; this would restrict potential competition in Switzerland and, for this reason, there would be potential effects in Switzerland.

No implementation of agreement necessary

The parties further argued that the export ban had not restricted competition at all because the parties had not implemented the export ban.

The FSC rejected this argument too. The FSC held that there would be no need to establish that an alleged restriction had actually occurred. The FSC held that a potential restriction of competition would be sufficient.

Quantitative criteria irrelevant for significance of restriction

Moreover, the parties argued that the FAC should have considered quantitative factors such as the...

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