Could Switzerland be at risk of reverting to the traditional cartel economy?

Business circles are pushing to slow down competition supervision, but supervisors are concerned about Switzerland reverting to a country of cartels. The Council of States is facing a significant decision that has sparked debate and emotions in both politics and business. The dispute revolves around the legal framework for combating cartels, with some advocating for a slower pace for state competition authorities and others warning against the threat of a loss of prosperity if Switzerland falls back into a country of cartels.

Switzerland has a Cartel Act in place to protect competition, which is essential for stimulating productivity and prosperity in the economy. The Federal Competition Commission (Weko) is responsible for enforcing the Cartel Act, particularly focusing on “hard” cartel agreements that harm competition. Over the years, the Weko has imposed fines totaling over 800 million francs on offenders. However, recent debates have prompted a revision of the Cartel Act, with concerns raised about the potential impact on combating cartels.

In 2016, a groundbreaking ruling by the Federal Supreme Court highlighted the harmful nature of certain cartel agreements, leading to stricter enforcement by the Weko. The construction sector has been a frequent target of cartel investigations, as consortiums of construction companies have come under scrutiny for potentially stifling competition. Parliament’s motion to clarify the effects of hard cartel agreements on a case-by-case basis has added fuel to the debate over the Cartel Act’s revision.

Critics of the current anti-cartel system argue for a more stringent burden of proof on the Competition Commission to demonstrate the harmful effects of cartels. They believe that the proposed revision could hamper the effectiveness of combating hard cartels, potentially tarnishing Switzerland’s international reputation. Supporters of the status quo maintain that the Swiss legal framework is in line with the EU and OECD guidelines, emphasizing the importance of maintaining strong anti-cartel measures for a competitive economy.

The ongoing debate around the revision of the Cartel Act underscores the complex balance between competition and regulation in Switzerland. The outcome of the Council of States’ decision on the proposed changes will have far-reaching implications for businesses, competition authorities, and the overall economic landscape of Switzerland.