The Competition Commission needs to be strengthened
The proposed reform of the fines regime fails to address a key shortcoming
Since the Swiss Competition Commission (ComCo) has been able to impose turnover-based sanctions, the debate about its structure has never ceased. Critics point in particular to the lack of separation between the ComCo Secretariat, which conducts investigations and files sanction requests against infringing companies, and ComCo itself, which issues the first-instance ruling.
This lack of separation is evident in the fact that the ComCo Secretariat can only open investigations with the agreement of the presidency and must also seek the presidency’s approval for procedural orders.
Fundamental conflict of interest
Moreover, in first-instance proceedings, the Secretariat assumes a dual role: both as prosecutor and as court clerk and advisor to ComCo. Particularly problematic: after the oral hearing of the companies concerned, ComCo deliberates in the absence of the parties – yet in the presence of the Secretariat's staff who conducted the investigation and drafted the motion submitted to the ComCo for decision.
Violations of antitrust law should and must be sanctioned – that is beyond question. But the current system contains a fundamental conflict of interest. The Secretariat staff advising ComCo usually spend years working on the case files and preparing the sanction request. About two months before the oral hearing, ComCo – a part-time authority – receives the complete case file, which formally transfers control of the proceedings to it. At this point, the Secretariat’s role shifts from prosecutor to court clerk.
It is obvious that this creates an imbalance of knowledge and, in practice, a relationship of dependency between Secretariat and ComCo. It is also unlikely that the Secretariat would answer ComCo's questions during deliberations in a neutral manner. Therefore, an independent judicial review of the facts only takes place in the second instance before the Federal Administrative Court, provided the convicted company lodges an appeal. But there, the company faces the much heavier burden of the claimant’s role.
The draft envisages a somewhat stronger separation between the Secretariat and ComCo. The ComCo would only be involved at the decision-making stage, as the investigative powers of ComCo's presiding body (except for ordering interim measures) would be abolished. The hope is that this will prevent prior involvement of the presiding body and thus avoid a possible confirmation bias during deliberations. In addition, the ComCo shall be reduced in size and strengthened with independent experts.
However, the separation of prosecution and judge in the decision phase still does not occur: while the proposal envisages a proposition according to which the Secretariat’s, during ComCo' deliberations may only answer ComCo's questions and not make submissions in the absence of the parties, the ComCo – still a part-time authority – would continue to rely on the knowledge and expertise of the prosecuting Secretariat in its deliberations, without the parties ever knowing how these deliberations actually take place. The inherent flaw in the current system is thus not remedied by the draft. A more consistent separation between investigation and decision would be needed already at first instance.
Eliminate lack of transparency
To improve the current unsatisfactory and constitutionally questionable situation, at least the oral hearing of the parties should be strengthened, and the lack of transparency of ComCo's deliberations eliminated.
The hearing is the only time in the first-instance proceedings where companies charged with a violation of competition law can present their case directly to the decision-making authority. Currently, they are given about 20 minutes for an oral presentation. Although members of the ComCo are already entitled to ask questions to the parties, in practice the statement is usually just noted without further discussion. Today, proceedings are therefore essentially conducted as written-record cases. Given ComCo's sanctioning powers, the principle of immediacy should be reinforced already at first instance.
In addition, for the ComCo to decide truly independent, it requires resources separate from the Secretariat to advise it and to supervise the drafting of decisions, which currently falls to the Secretariat. Under no circumstances should exchanges between Secretariat and the ComCo take place during deliberations without the parties’ involvement.
Together with the proposed strengthening of the Federal Administrative Court by adding part-time judges with antitrust expertise, such measures could already bring about a significant improvement in the system. One thing is clear: the status quo is not sustainable.