Swatch Group investigated over cartel law

Swatch Group, the world’s biggest watchmaker, is being investigated by the Swiss competition commission (Comco) for its plan to stop supplying components to other firms.

This content was published on June 8, 2011 - 11:27

Comco said on Wednesday that the purpose was to determine whether Swatch Group’s decision was an abuse of its dominant market position, and thus in violation of the law against cartels.

Swatch Group said in a press statement that it had initiated the investigation itself. The aim was to find a mutually agreable solution to allow the group to gradually reduce its deliveries to third parties “in the interests of the entire watch industry”.

The two sides have agreed on provisional measures for the duration of the investigation, under which the Swatch Group will be allowed to decrease deliveries next year.

The Swatch Group supplies mechanical movements and assortments – a component which regulates a mechanical watch - to third parties, but has long wanted to phase out these sales.

The founder of Swatch Group, Nicholas Hayek, told back in 2003 that he intended to halt sales of “ébauches”, or incomplete movements, in order to encourage other companies to try to do their own production.

“Otherwise the Swiss watch industry will suffer exactly the same problems it had before, and it will go down,” he said.

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