Swiss telecommunications provider Sunrise accuses its rival Swisscom of having abused its dominant market position from 2001 to 2007, unlawfully hindering competition with its pricing policy for ADSL services.
The former monopolist practiced a margin squeeze which made it impossible for Sunrise as a wholesale customer to operate its ADSL business profitably, argues the company. This was confirmed by the Federal Supreme Court on December 9, 2019 after a 10-year appeal process. Swisscom was sentenced to a fine of CHF186 million (€177 million). On the basis of this ruling, Sunrise is claiming damages of CHF350 million (€333 million) plus interest from Swisscom.
“Swisscom has abused its dominant market position, hindered competition and damaged the market. Not least in the interests of our customers and shareholders, we are now suing for damages in court,” said André Krause, CEO of Sunrise.
In its decision of November 5, 2009, the Competition Commission (COMCO) concluded that Swisscom had abused its dominant market position in broadband Iinternet access (ADSL) for years. COMCO sentenced Swisscom to a fine of around CHF220 million, which the former monopolist appealed.
The Federal Administrative Court confirmed the illegal conduct and reduced the fine to CHF186 million, after making various corrections to the calculations of the sanction. Swisscom appealed again, before the Federal Supreme Court confirmed the ruling of the Federal Administrative Court on December 9, 2019.
Sunrise commissioned consulting company Swiss Economics to calculate the damage of Sunrise. This is due to loss of market share and prevented gain in the broadband internet market and adjacent markets (landline and mobile communications). The total amounts to CHF457 million, a greater number than originally assumed.
As a precautionary measure to prevent limitation, Sunrise had interrupted the statute of limitation for a claim of CHF350 million, and is filing a claim for damages of CHF350 million plus interest with the Bern Commercial Court today.
Sunrise hopes the lawsuit can be processed quickly, but stresses that “previous experience shows that Swisscom is likely to drag the case through all instances again and that it could be years before a final judgment is issued.”
Swisscom said in a statement that the claim would be examined. No information was provided on the pending legal proceedings. The financial guidance for the current financial year remains unchanged, stresses Swisscom, but provisions have been made for possible civil law claims.
