Broadband networking of Swiss Post sites

Antitrust law: Federal Supreme Court upholds Swisscom appeal

In its judgement of 5 March 2024, the Federal Supreme Court concluded that Swisscom’s conduct in the 2008 tendering process for the broadband networking of Swiss Post sites was fair. The Federal Supreme Court has thus upheld Swisscom’s appeal and overturned the original penalty decision of the Competition Commission (COMCO) from 2015, with the imposed fine of more than CHF 7 million, as well as a Federal Administrative Court judgement from 2021. Swisscom welcomes the Federal Supreme Court’s ruling.

By Sepp Huber
The Swisscom logo in close-up, on the roof of the Group Headquarters in Worblaufen.

The Federal Supreme Court has upheld the appeal lodged by Swisscom and overturned the contested ruling of the Federal Administrative Court. Swisscom did not force unreasonable prices on Sunrise or Swiss Post and demonstrated fair conduct in the setting of prices for wholesale products. Moreover, the prices charged by Swisscom for these wholesale products were not inflated.

In respect of Swiss Post, the Federal Supreme Court found that the bid price was the result of negotiations and was not set unilaterally by Swisscom. Finally, the court concluded that Swisscom had not imposed a margin squeeze on Sunrise and did not demonstrate anti-competitive conduct.

Proceedings date back to 2008

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 concluded that Swisscom had abused its market position, forced unreasonable prices from competitors and Swiss Post, and imposed a margin squeeze. In response, COMCO imposed a fine of CHF 7.9 million on Swisscom.

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 subsequently lodged an appeal against the COMCO decision with the Federal Administrative Court. In June 2021, the Federal Administrative Court largely upheld the COMCO decision, but reduced the fine imposed to CHF 7.4 million. The Federal Administrative Court also concluded that Swisscom had behaved unlawfully in the tender for the broadband networking of postal sites to the detriment of Sunrise and Swiss Post.

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