SWITZERLAND Law and Practice Contributed by: Marcel Dietrich, Richard Stäuber and Katharina Bratvogel, Homburger
4.4 Competition Concerns As mentioned in 4.1 Substantive Tes t, the cur - rent substantive test in Switzerland is a dom - inance-plus test. Applying this test, ComCo investigates unilateral effects, co-ordinated effects in the case of oligopolies, conglomer - ate effects, as well as vertical concerns and the elimination of potential competition. 4.5 Economic Efficiencies In the past, ComCo often did not consider eco - nomic efficiencies as a mitigating factor. In theo - ry, efficiencies may be taken into account if they are likely to prevent the elimination of effective competition. Furthermore, under the Swiss substantive test, economic efficiency gains in one market may outweigh the effects of creating or strengthen - ing a dominant position in another market (see 4.1 Substantive Test ). This part of the test has, for a long time, not had practical relevance. In a recent case, however, for the first time, Com - Co authorised a concentration (Gateway Basel Nord, 2019) explicitly based on that provision (Article 10 (2)(b) Cartel Act), which indicates the increased role of economic efficiencies in Swiss merger control law (see 10.2 Recent Enforce- ment Record ). 4.6 Non-Competition Issues ComCo does not consider non-competition issues, such as industrial policy, national secu - rity, foreign investment, employment or other public interest issues, in its review of planned concentrations. As an exception to that princi - ple, the Cartel Act provides that in a concen - tration of banks that is deemed necessary by FINMA for reasons related to creditor protection, the interests of creditors may be given priority (Article 10 (3) Cartel Act). In such a case, FINMA takes the place of ComCo. To give an example,
the takeover of CS by UBS by way of an absorp - tion merger within the meaning of Article 3 (1)(a) and Article 4 (1)(a) of the Merger Act was subject to the review competence of FINMA as a merg - er within the meaning of Article 4 (3)(a) CartA because the protection of creditor interests has been decisive for the assessment of admissibil - ity and FINMA has assumed jurisdiction. If ComCo prohibits a concentration, the com - panies involved can request that the Federal Council of Switzerland authorise the concentra - tion based on public interest. In these instances, the Federal Council may consider both competi - tion-related and non-competition-related factors when evaluating the concentration. To date, no such authorisation has been granted. Proposed Federal Act on Foreign Direct Investment Control The Federal Council conducted a consultation process for a new Federal Act on Foreign Direct Investment Control in May 2022. In May 2023, the Federal Council decided to substantially revise the proposal from the consultation, fol - lowing which a revised draft of the Investment Control Act was published on 15 December 2023. The proposed Federal Act will introduce foreign investment control into the Swiss legal framework (see 1.2 Legislation Relating to Par- ticular Sectors ). It is proposed to introduce a notification and approval requirement for certain takeovers of domestic undertakings by foreign state investors (prior to closing) that endanger or threaten the public order or security of Switzer - land. The investment control rules will be sepa - rate from the merger control rules. It is envisaged that the notification must be submitted to the State Secretariat for Economic Affairs (SECO) but that the competence not to approve a noti - fiable investment will, however, be held exclu - sively by the Federal Council at the request of
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