Six years ago, Swisscom had to pay a fine of CHF 186 million for market abuse. The telecom group recently dug deep into its pockets again. The rival Sunrise, of all people, receives the money.
The wheels of justice grind slowly, but they grind. This is expensive for Swisscom.
Swisscom and the Competition Commission (Weko) are not a love story. The telecom company feels unfairly treated by the authorities. Even if a Weko fine is confirmed by a court, Swisscom cannot always be dissuaded from its view that it was wrongly punished. At least that was the case with the so-called ADSL process.
After a ten-year tour of the instances, the Federal Supreme Court confirmed the verdict of the competition authorities at the end of 2019. The Lausanne judges were also of the opinion that the blue giant had abused its dominant position. A cartel fine of CHF 186 million imposed by the Federal Administrative Court thus became final. That didn’t impress Swisscom. The company announced in a communiqué Withthat it considers the sanction to be unjustified.
An expensive sequel
Swisscom had already paid the fine in 2016, before the decision of the Federal Supreme Court. That was not the end of the matter for the telecom group financially, as it later turned out to be. In mid-2020, Sunrise filed a civil lawsuit with the Bern Commercial Court for damages of 350 million. Since market abuse by Swisscom had already been determined in the last instance, Sunrise “only” had to prove the damage it had suffered.
After the lawsuit was filed, not much was heard of the matter. Now it turns out that Swisscom has reached an out-of-court agreement with Sunrise. The semi-state group is likely to have paid its competitor at least 100 million francs.
The two companies did not want to comment on this when asked. But that is not necessary either. Swisscom does not announce the multi-million dollar payment to rival Sunrise. However, the facts can be reconstructed well from the annual reports of the telecom group. Because Swisscom only reports figures for the total provisions for competition law disputes, the sum that the two companies have agreed on cannot be determined exactly. But the fact is: After the judgment of the Federal Supreme Court at the end of 2019, Swisscom increased the provisions by more than CHF 100 million in several steps. In the annual reports, this was justified, among other things, with civil law claims in connection with the ADSL procedure.
Probably because of the hype about the resignation of the CEO Urs Schaeppi, which was announced on the same day, one point was omitted last February when the annual figures for 2021 were published: Swisscom disclosed in the annual report that a settlement had been reached in connection with civil law claims relating to the ADSL process had been. At the same time, it was reported that provisions in the amount of CHF 140 million had been “used” for antitrust proceedings. Since no high Weko fines or the like were confirmed by a court during this period, the case is clear: Swisscom has agreed to pay damages of this magnitude to Sunrise.
Swisscom has already paid
The annual report for the first quarter of 2022 shows that Swisscom has already paid off CHF 100 million. The company may have to pay further tranches in the coming quarters. However, it is also possible that she settled part of the bill by waiving certain claims against Sunrise. The annual report also shows that Swisscom has reached an out-of-court settlement with at least one other Internet provider. It is unclear who it is. Possible candidates such as Green or Quickline did not want to comment on the request.
The ADSL procedure was initiated by ComCo in 2005. After a four-year investigation, the authority determined that Swisscom had abused its dominant position in the market for broadband internet. The group charged other providers for wholesale services a tariff that was too high compared to the price for Swisscom Internet customers. So the competition had no chance to make a profit with their Internet offers. In jargon one speaks of a cost-price squeeze. In the eyes of Internet providers Init7, Solnet and Ticinocom, history is repeating itself. A year ago, you filed a complaint against Swisscom with ComCo. The telecom group rejects the accusation.