Decision of the Swiss Federal Supreme Court in the Gaba / Gebro case – Tightened standards in Swiss competition law
On 21 April 2017, the Swiss Federal Supreme Court published its decision in the case regarding the manufacturing and distribution of Elmex products (teeth and mouth care products). A public deliberation of the judgement had already taken place on 28 June 2016. The decision addresses fundamental questions of Swiss competition law and has resulted in tightened standards in the application of Swiss competition law both with regard to horizontal and to vertical greements.
According to the Federal Supreme Court, agreements on price-fixing, quantity limitation and market allocation are especially detrimental to competition due to their subject matter and, in principle, unlawful and subject to sanctions based on their very existence and regardless of their actual effect on competition. These agreements are directly sanctionable except if justifiable on grounds of economic efficiency. The element of significance as in “significant restriction of competition” as provided by the statute has, according to judgement, only the meaning of a de minimis threshold. As to the level of such threshold, and its applicability to agreements considered to be of an especially detrimental nature due to their subject matter, the judgement remains vague. In addition, the Federal Supreme Court states that the mere potential for events which have occurred abroad to have an effect in Switzerland brings them within the territorial scope of application of the Swiss Cartel Act, regardless of the intensity of such effect.
In light of this, in order to avoid the risk of fines by the Swiss Competition Commission (ComCo), the decision must be taken into account in the context of contracts dealing with a situation abroad which has the mere potential for having a marginal effect in Switzerland, such as an export ban on a retailer in a remote foreign country.
Please see attachment below.