Switzerland: Competition Switzerland – Q 3 2012

Last Updated: 2 October 2012
Article by Pascal Favre

HORIZONTAL AGREEMENTS

The Swiss Competition Commission fines IFPI Switzerland and Phononet for preventing parallel imports

In July 2012, the Swiss section of the International Federation of the Phonographic Industry (IFPI Switzerland), one of the largest industry associations in the music industry, as well as Phononet AG, a platform for the electronic data exchange in the Swiss entertainment industry, reached an amicable settlement with the Swiss Competition Commission in the context of an investigation launched for alleged restrictions of parallel imports. IFPI Switzerland and Phononet agreed upon a fine in the amount of, respectively, 3.5 million and CHF 20,000 Swiss francs. They also committed to not restrict or impede parallel imports of sound and/or sound carriers in Switzerland in the future.

In its decision of July 16 2012, the Competition Commission approved the amicable agreement with IFPI Switzerland and Phononet AG that was proposed by its Secretariat. Whilst the exact terms of the settlement have not been released, it is known for certain that IFPI Switzerland and Phononet AG have committed to (i) not demand in the future the signing of a waiver for parallel imports of phonograms and/or videograms (e.g. CD) from new members of IFPI Switzerland, and (ii) not restrain or prevent unduly such imports1. The investigation, which was opened by the Competition Commission on June 6 2011, has shown that members of IFPI Switzerland had agreed, within the association, to impede the parallel importation of phonograms and/or videograms into Switzerland. According to the Competition Commission's press release, Phononet AG has supported the effects of this agreement. The investigation was also about the terms of joining the association, the organization of the "offizieller Schweizer Hitparade" and some indications of possible discriminating policy of the Music Promotion Network (Switzerland), a technology used to provide promotion information and tracks to media partners. However, no violation of the Swiss cartel act was established in that regard. The investigation has therefore been closed on these points. Concerning the Hitparade, IFPI Switzerland has accepted to modify its practice with a view to offering a better transparency.

Under Swiss law, the Competition Commission may impose a fine of up to 10 per cent of the respective companies' turnover in Switzerland in the previous three business years. The amount of the sanction is dependent on the duration and severity of the unlawful behavior. A remedy may consist in reaching an amicable settlement, which will be decided by the Competition Commission on a proposal of its the Secretariat. According to the Competition Commission's practice, reaching an amicable settlement does not rule out fines in respect of infringements that took place before the amicable settlement's conclusion.

A restriction on parallel imports is a type of restraint which is of particular importance to the Competition Commission. The Competition Commission has announced that it will be particularly vigilant in its fight against any contractual provisions or measures aimed at foreclosing the Swiss market.

The Competition Commission puts an end to the tariff recommendations in Neuchâtel's real estate sector

The Competition Commission has found that the utilization of tariff recommendations for the management fees in the Canton of Neuchâtel violated the Swiss cartel act. The real estate professionals of USPI Neuchâtel, the local section of the Swiss Association of Real Estate Agents, agreed to reach an amicable settlement with the Competition Commission, on the basis of which the Competition Commission pronounced a reduced sanction of CHF 35,000.

The aide-mémoire of the USPI-Neuchâtel was taking the form of price recommendations. It set ranges of rates for the services billing related to the property management. It also provided fixed rates for the real estate brokerage. According to the Competition Commission's press release2, the investigation has shown that more than a third of the association members were following these price recommendations in the management sector. As to the brokerage sector, the investigation has been closed due to a lack of significant restriction on competition.

Footnotes

1. A version in French and German is available at: http://www.news.admin.ch/message/index.html?lang=fr&msg-id=45436.

2. A version in French and German is available at: http://www.news.admin.ch/message/index.html?lang=fr&msg-id=45378.

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