In its judgement of 24 June 2021, the Federal Administrative Court (FAC) came to the conclusion that Swisscom had behaved improperly in the 2008 tendering process for the broadband networking of Swiss Post sites and largely upheld the penalty decision of the Competition Commission (COMCO). Swisscom will now refer the judgement to the Federal Court.
In 2008, Swiss Post had put out a call for tender to set up a broadband network between its sites (WAN, Wide Area Network). After a suitability test, it requested bids from Sunrise, UPC and Swisscom. It then accepted Swisscom’s bid in January 2009. Sunrise responded by filing a complaint against Swisscom with the competition authority, claiming that Swisscom had violated the Federal Cartel Act.
In September 2015, COMCO came to the conclusion that Swisscom had abused its market position, forced unreasonable prices from competitors and Swiss Post, and imposed a margin squeeze. As punishment, COMCO imposed a fine of CHF 7.9 million on Swisscom, which has now been reduced to CHF 7.4 million by the Federal Administrative Court.
Swisscom contested COMCO’s decision
Swisscom had previously demonstrated to COMCO that Sunrise would have been in a position to submit a competitive bid if it had made prudent use of its own and intermediate inputs.
The allegation of misconduct to the detriment of Swiss Post is also incomprehensible: as a powerful buyer, it had awarded the contract to the party submitting the most competitive bid, from its perspective, within the context of a GATT/WTO tendering process and in accordance with the strict rules that such a process entails. Swisscom had therefore contested COMCO’s decision.
Swisscom will now refer the judgement to the Federal Court
In its judgement of 24 June 2021, the Federal Administrative Court has largely upheld COMCO’s 2015 decision and also came to the conclusion that Swisscom had behaved improperly and to the detriment of Sunrise and Swiss Post in the tendering process for the broadband networking of Swiss Post sites.
Swisscom remains of the opinion that its behaviour in this tendering process was entirely in accordance with the law. Swisscom’s intermediate inputs do permit competitive bids from other telecom providers if prepared in a prudent way. Swisscom will lodge an appeal against the judgement with the Federal Supreme Court.