Groups of companies in the context of competition law: the privilege and its drawbacks.

We are happy to introduce to the reader Pascal Favre's most recent article entitled « Les groupes de sociétés en droit de la concurrence : le privilège et ses revers » ("Groups of companies in the context of competition law: the privilege and its drawbacks"), featured in the 4/2024 issue of the Swiss Review of Business and Financial Market Law (SZW/RSDA).

Agreements between companies in the same group do not fall within the scope of competition law, as they cannot be treated as agreements relating to competition. Yet, this apparent privilege is counterbalanced by a series of drawbacks. Often referred to as the two sides of the same coin, the privilege and its disadvantages raise a lot of questions for group companies in the context of Swiss competition case law. For example, why is that a company within a group can be penalized for the anticompetition behavior of another group member? And even further, should the penalty amount then be calculated based on the cumulative turnover of all group members?

According to the Swiss Cartel Act (art. 2 par. 1^bis), when a parent company can control its subsidiaries, in the sense that it exercises a decisive influence over their strategy or operational policy, it is the group as a whole that forms an undertaking and becomes an autonomous subject of competition law. Therefore, the group as a whole must comply with the rules of competition law and any infringement by one member makes the other members subject to sanctions. The Swiss law approach is largely identical to that of European law, where the regime applicable to groups of companies is based on the single economic unit doctrine developed by the European Court of Justice. This explains the many interactions between the two laws. Pascal's article, the preview to which is accessible online here, explores in depth these and other important questions by providing an engaging review of the Swiss competition and antitrust regulation and sanctions in light of the most recent competition case law.