Switzerland - Inquiry into Possible Relative Market Power of Pharmaceutical Company that Charges Different Wholesale Prices in Switzerland and Abroad

• 23/08/2022
• Articles

On 16 August 2022, the Swiss competition authority announced the start of an inquiry into the pricing practices of an unidentified pharmaceutical company to determine whether that company infringed the newly adopted Swiss rules governing abuse of economic dependency (see, attached press release). A Swiss pharmaceuticals wholesaler had complained that it had not been given the opportunity to procure specific oral and intravenous nutritional products from a supplier at the financial conditions which the supplier applies abroad.   In March 2021, the Swiss Parliament adopted an amendment to the Cartel Act which entered into force on 1 January 2022 and established the concept of relative market power. Pursuant to this new rule, a firm may be found to have relative market power if one or more other firms, buyers or sellers, are dependent on it in such a way that there are no sufficient and reasonable possibilities for them to switch to another partner. All abuses applying to firms in a dominant position are now also relevant for firms with relative market power. Moreover, in a move designed to free Switzerland from the shackles of being an “economic island”, Parliament created a new category of abusive pricing conduct described as “limiting the possibility for buyers to obtain abroad goods or services offered in Switzerland and abroad at market prices and under conditions customary in the industry”.   It is not known when the Swiss competition authority expects to wrap up its investigation.

In March 2021, the Swiss Parliament adopted an amendment to the Cartel Act which entered into force on 1 January 2022 and established the concept of relative market power. Pursuant to this new rule, a firm may be found to have relative market power if one or more other firms, buyers or sellers, are dependent on it in such a way that there are no sufficient and reasonable possibilities for them to switch to another partner. All abuses applying to firms in a dominant position are now also relevant for firms with relative market power. Moreover, in a move designed to free Switzerland from the shackles of being an “economic island”, Parliament created a new category of abusive pricing conduct described as “limiting the possibility for buyers to obtain abroad goods or services offered in Switzerland and abroad at market prices and under conditions customary in the industry”.

It is not known when the Swiss competition authority expects to wrap up its investigation.