Swiss Competition Commission Updates Notice On Vertical Restraints And Releases Explanatory Guidelines

Author:Dr. Mani Reinert
Profession:Bar & Karrer
 
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The Swiss Competition Commission (ComCo) has updated its notice on vertical restraints of 28 June 2010 (Notice on Vertical Restraints) following the Colgate-Palmolive judgment of the Swiss Federal Supreme Court (FSC). In this judgment, the FSC held that an export ban in an Austrian licence agreement had infringed the Swiss Act on Cartels (CA). In addition, ComCo has released explanatory guidelines on the Notice on Vertical Restraints (Guidelines).

Background

On 28 June 2017 (see Bär & Karrer Briefing of April 2017) the FSC held that Colgate-Palmolive Europe Sàrl (Colgate-Palmolive, the successor of GABA International AG) had infringed the Swiss Act on Cartels by barring its licensee Gebro Pharma GmbH (Gebro) from making parallel exports out of Austria.

The FSC held that a restriction of passive sales would 'generally' restrict competition significantly without ComCo having to establish a quantitative significant restriction of competition (for example based on high market shares of the parties or on a high adherence rate to the agreement).

Updated Notice on Vertical Restraints

ComCo has now updated its Notice on Vertical Restraints to reflect the Colgate-Palmolive judgment.

The updated Notice on Vertical Restraints clarifies that vertical agreements falling under Article 5(4) CA generally restrict competition significantly. Article 5(4) CA states that the following two types of agreements between a supplier and buyer are presumed to eliminate effective competition:

Agreements restricting the buyer's ability to determine its resale price;

Distribution agreements restricting the territory into which the buyer may make passive sales.

Historically, Article 5(4) CA was intended to mirror Article 4(a) and 4(b) (first exception) of the Block Exemption Regulation (EC) No 2790/1999 of 22 December 1999 of the European Commission on vertical agreements.

Guidelines

ComCo has also published explanatory Guidelines on the Notice on Vertical Restraints.

Generally, the Guidelines tend to be in line with the Block Exemption Regulation (EU) No 330/2010 of 20 April 2010 of the European Commission on vertical

 agreements and the European Commission's guide- lines on vertical restraints of 2010. Vertical agree- ments that do not contain hardcore restrictions, are generally deemed to be justified for reasons of economic efficiency, if the market share held by the supplier does not exceed 30% of the relevant market on which it sells the contract goods or...

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