INTERNATIONAL: APPLICABLE LAW - GEOGRAPHIC MARKET- PARALLEL IMPORTS

Switzerland: Prohibition of parallel imports and market integration - The role of the “effects doctrine” and the development of the substantive laws

Possible effects in Switzerland are sufficient to assert jurisdiction of Switzerland over conduct taking place outside Switzerland. The Supreme Court adopted a broad definition of the territorial scope of the Cartel Act, by not only refusing, but also prohibiting, to consider any level of intensity and probability of occurrence of effects in Switzerland. In addition, the Supreme Court established a restriction “by object” for agreements amounting to absolute territorial protection of the Swiss market. The unilateral expansion of the reach of the Swiss competition law operates as a means to integrate the Swiss market with the EU’s single market and to open other markets to Swiss costumers. A form of comity is however necessary to balance the positive effects for Swiss consumers with adverse effects abroad, particularly with regard to sales from distant territories.

1. The Federal Supreme Court of Switzerland has issued the reasoning behind an important ruling handed down in June 2016, whereby the prohibition of parallel imports from outside Switzerland was considered to restrict competition, as a rule, and be liable to fines (hereinafter “Elmex ruling”). [1] It was specified that the “effects doctrine” embodied in the Swiss Cartel Act (hereinafter “Cartel Act” [2]) is not contrary to international law, [3] that only the substantial rules may determine what intensity such effects must have on the Swiss market, and that, as a rule, prohibition of parallel imports is unlawful. The ruling is significant regarding not only several pending cases, but also the future enforcement of Swiss competition law. 2. With regard to cross-border parallel trade between

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Pranvera Këllezi, Switzerland: Prohibition of parallel imports and market integration - The role of the “effects doctrine” and the development of the substantive laws, September 2017, Concurrences N° 3-2017, Art. N° 84421, pp.185-192

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