New Comco director calls for action

Switzerland is dragging its feet in the telecoms market compared with Europe swissinfo C Helmle

Switzerland needs to become much more competitive, according to the new director of a federal watchdog.

Rafael Corazza, who recently joined the Federal Competition Commission (Comco), wants to take a much closer look at the awarding of public contracts and the possible collusion between cartels.

Corazza told journalists in Bern on Friday that he was convinced that price-fixing discussions took place between Swiss companies applying for government contracts. Comco has reportedly opened a number of investigations into the matter, but the new director refused to be drawn on details.

To expose the extent of alleged cartel collusion in public contracts, Corazza is relying on companies coming forward to declare their illegal involvement in exchange for exemption from punishment.

The new director also wants to crack down on vertical cartels, where companies fix prices by limiting the number of retailers and markets.

Backed up by a study from the State Secretariat for Economic Affairs (Seco), the competition watchdog also took advantage of the first meeting between the new director and the media to underscore the narrowing gap between prices in Switzerland and the European Union over the past ten years.

Competition is reaping results, it said, but there is still a great deal to do.

Falling prices

Walter Stoffel, the commission’s president, highlighted the example of the difference in prices of new cars in Switzerland and the EU which has fallen dramatically over the past ten years. In 1994 80 per cent of models were more expensive in Switzerland than in the EU.

“The average price of a new car in Switzerland is now eight per cent less than in the EU; a few years ago we were the most expensive country,” said Stoffel.

The retail sector has also evolved positively, he added. Since 2000 competition has increased in the Swiss retail market, dominated by the two leading food groups, Migros and Coop, resulting in falling prices.

And the arrival of foreign retailers from 2002 has further boosted competition and led to a fall in average household spending of around ten per cent over the past ten years, according to the Comco president.

However, Swiss farm products, with the exception of cheese, are still more expensive than the EU, he added.

And greater efforts must be made, particularly in telecommunications and the internet broadband sector, said Stoffel,

“Switzerland is not where it should be,” he commented.

“Switzerland is waltzing while the general public want rock-and-roll,” he declared, referring to the lower speeds and much higher prices in Switzerland compared with neighbouring countries.

swissinfo with agencies

Key facts

The Competition Commission consists of 15 members who are elected by the seven-strong cabinet.
The presidency is made up of three members. The federal cartel law demands that the majority of the members of the Competition Commission are independent experts – usually law and economics professors. Deputies of business associations and consumer organisations take the other seats.
Comco is supported by a full-time secretariat, which examines suspected cartels and prepares decisions for the commission.