Protecting Market Participants: New Swiss Antitrust Law Tackles High Prices But May Not Solve All Price Discrepancies

The Swiss government has taken a step to address the high prices of goods and services in the country. A change was made to the antitrust law, which aims to prevent foreign companies from “ripping off” their customers in Switzerland by charging excessive prices. The new instrument is an innovation in competition policy, focusing on protecting individual market participants instead of competition. Companies can turn to the Competition Commission (Weko) if they believe they are being disadvantaged by a supplier or buyer.

The rules apply between companies within Switzerland as well as between companies operating in different countries. One application case is Swiss surcharges, where a powerful foreign supplier demands possibly excessive prices from its customers in Switzerland. However, discussions have arisen within Switzerland about whether two major retailers, Migros and Coop, may have relative market power compared to their suppliers and are abusing this position.

The Weko has now made its first decision on the question of relative market power, specifically regarding a case in the healthcare sector involving Galexis, a wholesaler that purchases medicines and healthcare products from companies in Switzerland and abroad and sells them in Switzerland. The plaintiff accused Fresenius Kabi, a leading manufacturer of sip and tube feeding formula used primarily to feed patients in hospitals, of refusing to allow Galexis to purchase these products at favorable conditions abroad.

The Weko found that Galexis was not dependent on Fresenius Kabi and could switch to liquid nutrition from other manufacturers with limited options available. Additionally, Weko did not find any abuse by Fresenius Kabi as it believed that the company would not have behaved abusively even with its strong market position due to slightly better foreign conditions for delivering the products compared to Switzerland.

Critics have always complained that the reasons for high-priced islands like Switzerland lie primarily within domestic markets such as food, energy supply or construction sector rather than external factors like trade policies or currency exchange rates.

Overall, while the new instrument is an innovation aimed at protecting individual market participants instead of competition itself, it seems that it may not be enough to significantly address price disparities between countries or regions.

In conclusion, while the new tool provides some protection against abuses of relative market power by foreign companies operating domestically or internationally; it may not be sufficient to solve all pricing issues faced by consumers in high-price regions like Switzerland.