Sunrise filed a complaint against Swisscom suggesting the telco had behaved improperly in the 2008 tender process to set up a broadband network at Swiss Post sites
Switzerland’s Federal Supreme Court has concluded that Swisscom’s conduct in the 2008 tendering process for the broadband networking of Swiss Post sites was fair. As a result of the decision in the long-running legal proceedings, last month the court 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 welcomed the Federal Supreme Court’s ruling which also overturned the contested ruling of the Federal Administrative Court, which in 2021 concluded that the telco “behaved improperly” in the 2008 tender process to set up a broadband network at Swiss Post sites.
The Federal Supreme Court found that 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.
Long-running dispute
The proceedings date back to 2008 when Swiss Post had put out a call for tender to set up a broadband WAN between its sites. 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 said it had previously demonstrated to COMCO that Sunrise would have been able to submit a competitive bid if it had made “prudent use of its own and intermediate inputs”. The telco said in a statement: “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.
Swisscom lodged an appeal with the Swiss Federal Supreme Court stating that it acted in accordance with the law during the tender process launched by Swiss Post, which requested bids from Swisscom and Sunrise.
Salty ending
In February, Swiss Post signed a strategic partnership with Salt to offer prepaid and postpaid “Post Mobile” services from its branches. Despite offering subscriptions, smartphones and telecom accessories from various providers in its branches for more than 20 years, Swiss Post has moved to a single partner. However, Swiss Post is still tied to Swisscom for several ICT services.