Cartel fine: Swisscom goes to the Federal Court

In its ruling, the Federal Administrative Court basically confirms the allegation of abuse of the Competition Commission (Weko), according to which Swisscom had charged its competitors unlawful prices for broadband connectivity services (BBCS) until December 31, 2007. However, it notes that the Weko set the fine imposed for this at CHF 219 million, which is too high, and therefore reduces it to CHF 186 million.

Swisscom regrets the decision of the Federal Administrative Court and considers the sanction unjustified because:

• Swisscom does not identify any market-dominant position, as competitive and price pressure already existed on the part of the cable networks at the time of the investigation;
• there was no obligation to offer the BBCS. However, Swisscom's voluntary offer enabled competitors to market their own broadband Internet services from the outset. Swisscom has continuously improved this service in terms of price and bandwidths, which is why it could not be a means of hindering competitors;
• the investigation concerns the first few years after the launch of ADSL and the initial losses in the broadband business criticized by the Weko due to acquisition costs for new customers were common in this phase and are not objectionable;
• Swisscom's (end-customer) broadband Internet business (and that of equally efficient competitors) is profitable in the long term and a structural deficit or margin squeeze cannot therefore exist;

Given this starting position and the fundamental nature of the ruling, Swisscom will file an appeal with the Federal Court, the company emphasizes.