Swiss Competition Commission fines Companies for Export Bans
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In December 2009, the Swiss Competition Commission imposed a fine of CHF 4.8 million on Gaba International AG, a manufacturer of toothpaste, because this company had imposed an export ban on its Austrian licensee who was also fined with a symbolic amount of CHF 10,000. This export ban had prevented Swiss retailers from buying the toothpaste at lower prices in neighboring markets.
The Swiss Competition Commission qualified this export ban as an illegal impediment of parallel imports into Switzerland by means of a vertical agreement. While the Swiss Competition Commission acknowledges that a prohibition of parallel imports may be acceptable in an initial phase to allow the launch of a new product on the Swiss market, such exception did not apply in the particular case.
In September 2006, the parties set aside the export ban but the licensee agreed to inform the manufacturer about any exports. The Swiss Competition Commission stressed that depending on the circumstances, such information could have led to an export ban but went on to say that this did not apply in the case at hand.
Even though the parties may appeal the decision, manufacturers should review their agreements and make sure that they do not impose any restrictions on their contractual parties on imports to Switzerland. Only if the product in question is protected by a patent can the parallel import in principle be prevented; but one will have to assess thoroughly whether the measures taken violate Swiss competition law because they might qualify as an abuse of a dominant position. Furthermore, parallel imports from the European Economic Area cannot be prohibited save for products such as pharmaceuticals where the price is set by governmental authorities. Trademarks and copyrights, on the other hand, can under no circumstances be invoked to prevent parallel imports into Switzerland.