1Economic freedom is guaranteed.
2Economic freedom includes in particular the freedom to choose an occupation as well as the freedom to pursue a private economic activity.
#Overview
Art. 27 Cst. protects economic freedom as an independent fundamental right. This encompasses three main areas: the free choice of profession, free access to private economic activity and its free exercise. Economic freedom applies to all persons who wish to engage in economic activity in Switzerland.
Protected activities: Economic freedom protects any private economic activity that is exercised professionally and aimed at profit or income (BGE 130 I 26). This includes, for example, opening a restaurant, working as a lawyer or operating a business. Freedom of contract (the right to conclude contracts with whomever one wishes and under whatever conditions) is also part of economic freedom.
Limits of protection: Activities without an economic character are not protected. Thus, the Federal Court decided that begging does not fall under Art. 27 Cst. because no professional economic activity is present (BGE 134 I 214, BGE 149 I 248). Consumer freedom (the right as a customer to buy what one wants) is also disputed: the Federal Court rejects its protection under Art. 27 Cst., while parts of the doctrine such as Vallender and Biaggini criticise this (Uhlmann, BSK BV, Art. 27 N. 12).
State restrictions: The state may only restrict economic freedom under strict conditions. Required are: a legal basis, a public interest, proportionality and preservation of the core content (→ Art. 36 Cst.). Additionally, the state must act in a competition-neutral manner (↔ Art. 94 Cst.). Licensing requirements for certain professions are permissible in principle, but must be justified (BGE 130 I 26).
State economic activity: When the state itself engages in economic activity (e.g. a state bank), it must preserve competition neutrality. It may not unfairly compete with or displace private enterprises (BGE 138 I 378). In the case of monopolies (exclusive rights of the state), particularly strict requirements must be fulfilled.
Practical significance: Economic freedom is particularly important in licensing procedures, professional regulations and spatial planning measures. It also protects foreign persons and companies that are active in Switzerland (BGE 131 I 223). However, the fundamental right does not generally establish claims to state services, but protects against state interference.
Art. 27 FC — Freedom of Economic Activity
#Doctrine
#1. Legislative History
N. 1 Art. 27 FC continues Art. 31 of the former Federal Constitution (aFC) (freedom of trade and commerce). In its Dispatch of 20 November 1996 (BBl 1997 I 174 ff.), the Federal Council decided to replace the traditional term «freedom of trade and commerce» with the more comprehensive term «freedom of economic activity», without altering the substantive scope of protection (BBl 1997 I 175). This was intended to ensure full coverage of new forms of private-sector gainful activity that could not be subsumed under «trade and commerce».
N. 2 The Dispatch expressly rejected the anchoring of the social embeddedness and environmental responsibility of the economy within the fundamental rights article itself, as well as the recognition of freedom of consumption as a sub-element (BBl 1997 I 175 f.). The dual dimensions — an individual-law guarantee (Art. 27 FC) and an institutional ordering principle (Art. 94 FC) — were deliberately distributed across two separate provisions (BBl 1997 I 289 ff.).
N. 3 In the Council of States, rapporteur Marty Dick (R, TI) characterised Art. 27 FC exclusively as an individual-law guarantee of the right of the individual to engage in gainful activity; the institutional understanding was to be located in Art. 94 FC. The provision was approved unanimously in the Council of States.
N. 4 In the National Council, three competing conceptions were debated: The majority (supported by Dettling, R, SZ, and Sandoz, L, VD) approved the Federal Council's draft. Minority I (Gysin, S, BS) moved to replace «freedom of economic activity» with «private-sector initiative» together with a commitment to the common good: «Economics and commerce are not ends in themselves, but merely means to an end.» (Gysin Remo). Minority II (Vallender, R, AR; Bührer, R, SH; Weigelt, R, SG) called for a constitutional reservation for derogations to be included directly in the fundamental rights article itself, and not only in Art. 94 para. 4 FC: «Where does the core content of the freedom of economic activity stand with regard to railways? Nuclear energy? Agriculture?» (Vallender Dorle). Rapporteurs Pelli (R, TI) and Gross Jost (S, TG) considered a duplication of the reservation unnecessary: «The requested anchoring of the constitutional reservation for derogations in Article 23 as well leads to an unnecessary duplication and, if the wording is not identical, is also a source of new legal uncertainty.» (Gross Jost). The Federal Council's draft ultimately prevailed.
N. 5 The Federal Supreme Court has confirmed the continuity of the consolidation: BGE 130 I 26 E. 4.1 establishes that, even under the new constitutional law, the existing case law on Art. 31 aFC remains applicable in principle, and BGE 138 I 378 E. 6.1 affirms the dual structure (individual-law content in Art. 27 FC, institutional dimension in Art. 94 FC) with explicit reference to the Dispatch (BBl 1997 I 175 ff., 293, 296).
#2. Systematic Classification
N. 6 Art. 27 FC forms part of the third section on fundamental rights (Art. 7–36 FC) and is therefore subject to the general reservation of restriction under → Art. 36 FC (legal basis, public interest, proportionality, protection of the core content). As a liberty right, it establishes primarily a defensive dimension against state interference. A positive dimension — such as a claim to state promotion of economic activity — does not in principle follow from Art. 27 FC (BGE 130 I 26 E. 4.1).
N. 7 The close connection with ↔ Art. 94 FC is structurally fundamental: Art. 27 FC protects the individual-law content; Art. 94 para. 1 FC obliges the Confederation and the Cantons to comply with the principle of freedom of economic activity; Art. 94 para. 4 FC establishes the constitutional reservation for derogations from this principle, in particular for measures that distort competition. The Federal Supreme Court describes Art. 27 and Art. 94 FC as closely interrelated, such that neither provision can be considered in isolation (BGE 138 I 378 E. 6.1). A pivotal function is performed in this regard by the principle of equal treatment of persons engaged in the same trade or business and the requirement of state competitive neutrality (BBl 1997 I 177 fn. 266).
N. 8 Further distinctions are relevant with respect to: → Art. 26 FC (guarantee of property, which protects economic assets but not gainful activity), → Art. 28 FC (freedom of association in labour matters, as a specialised labour-constitutional norm), and → Art. 16 f. FC (freedom of opinion and information, which does not encompass an economic component). The freedom of economic activity must be distinguished from these guarantees, but may stand alongside them in ideal concurrence. At the level of international law, Art. 27 FC has no direct parallel in the ECHR; Art. 1 of Protocol No. 1 to the ECHR (protection of property) is partly applicable, but its scope of protection does not extend as far as Art. 27 FC.
#3. Elements of the Provision and Normative Content
3.1 Personal Scope
N. 9 The holders of the freedom of economic activity are primarily natural persons. The Federal Supreme Court also recognises that legal entities under private law may invoke this right insofar as they engage in private-sector activities (BGE 130 I 26 E. 4.1). Public-law entities — communes, public-law institutions, state-owned enterprises — may not invoke Art. 27 FC insofar as they act in fulfilment of sovereign tasks. However, where a state-owned enterprise competes in the market with the same rights and obligations as a private operator, this does not in itself constitute a restriction of the individual-law freedom of economic activity of competitors, provided that the private offering is not thereby effectively displaced (BGE 138 I 378 E. 6.2).
N. 10 Foreign nationals are in principle equally entitled to invoke the freedom of economic activity. Restrictions on access to a profession under immigration law provisions must be assessed against the principle of proportionality and examined in light of the Agreement on the Free Movement of Persons (AFMP), which contains autonomous non-discrimination provisions (BGE 130 I 26 E. 3).
3.2 Material Scope
N. 11 According to Art. 27 para. 2 FC, the material scope encompasses three sub-elements: (1) free choice of occupation; (2) free access to private-sector gainful activity; (3) free pursuit of such activity. The qualifier «private-sector» is decisive: protection is afforded only to activities that are oriented towards the generation of remuneration or profit and that are not carried out primarily in fulfilment of a public task.
N. 12 Court-appointed defence does not fall within the scope of Art. 27 FC despite its commercial appearance, because it fulfils a state function (BGE 141 I 124 E. 4.1). Similarly, Art. 27 FC does not protect purely private or altruistic activities pursued without a gainful purpose. Begging does not constitute private-sector gainful activity within the meaning of Art. 27 para. 2 FC; it falls outside the material scope of protection due to the absence of any productive or reciprocal character (BGE 134 I 214; confirmed in BGE 149 I 248).
N. 13 Activities expressly protected under the Federal Supreme Court's case law include, inter alia: free admission to the medical profession (BGE 130 I 26 E. 4.1), commercial advertising on private land (BGE 128 I 3 E. 3a), use of public land for private-sector commercial purposes (taxi services, fairground businesses; BGE 130 I 26 E. 4.4), free professional practice by lawyers in the monopoly area (BGE 141 I 124 E. 4.1), and participation in tendering procedures for licensed water use (BGE 142 I 99).
N. 14 Art. 27 FC gives rise to the principle of equal treatment of persons engaged in the same trade or business: state measures that favour or disadvantage individual market participants without objective justification violate Art. 27 FC. This applies in particular to monopoly regulations that exclude competing activities without a constitutional basis (BGE 128 I 3 E. 3a, departure from previous practice on legal advertising monopolies on private land). State activity that distorts competition violates Art. 94 para. 4 FC, but also the right to equal treatment enshrined in Art. 27 FC (BGE 138 I 378 E. 9.1).
3.3 Concept of Interference
N. 15 Classic interferences with the freedom of economic activity include legal prohibitions, licensing requirements, access restrictions, and needs clauses. The case law also recognises de facto interferences, where state measures affect those concerned to a similar degree as a legal prohibition (BGE 130 I 26 E. 4.4; BGE 138 I 378 E. 6.2.2). State competition does not, however, in principle constitute an interference with the individual-law freedom of economic activity, provided that the private offering is not thereby effectively displaced (→ N. 9).
N. 16 Needs clauses — i.e. provisions that make market access conditional on a quantitative demand — are in principle incompatible with Art. 27 FC; they require a specific constitutional authorisation under Art. 94 para. 4 FC, which may also be contained implicitly in a competence norm (BGE 130 I 26 E. 6.2 with reference to Vallender, SGK BV, Art. 27 N. 44 f.). The Federal Supreme Court held the admission freeze for doctors under the statutory health insurance scheme to be constitutionally tenable, because Art. 117 FC contains an implicit constitutional authorisation (BGE 130 I 26 E. 6.2).
#4. Legal Consequences
N. 17 Art. 27 FC establishes a subjective constitutional right that may be invoked against acts of state authorities by way of constitutional complaint (Art. 113 BGG) or appeal in public law matters (Art. 82 ff. BGG). → Art. 36 FC sets out the cumulative requirements under which interferences with the freedom of economic activity are constitutionally permissible:
- Legal basis: Serious interferences require a formal statutory basis (Art. 36 para. 1 FC); in the case of a multi-year admission freeze, the statutory basis must encompass the fundamental elements of the restriction (BGE 130 I 26 E. 5.1).
- Public interest: The interest must not be of a purely fiscal nature (BGE 128 I 3 E. 3a). Permissible public interests include in particular the protection of public health (BGE 136 I 184), protection of the local streetscape and road safety (BGE 128 I 3), and cost containment in social insurance (BGE 130 I 26).
- Proportionality: The measure must be appropriate, necessary, and reasonable. Milder means (e.g. a licensing requirement rather than a monopoly) are to be preferred (BGE 128 I 3 E. 3e/cc).
- Protection of the core content: The essential content of the freedom of economic activity must not be hollowed out (BGE 136 I 1 E. 5.5).
N. 18 State competition with the private sector is compatible with Art. 94 FC provided that a formal statutory basis, a public interest, and proportionality are present, and that the principle of competitive neutrality is maintained. Systematic cross-subsidisation between the monopoly sector and the competitive sector of a state enterprise is unconstitutional (BGE 138 I 378 E. 9.1).
#5. Contested Issues
5.1 Dual Dimension: Individual Law or Institutional?
N. 19 The prevailing academic opinion distinguishes between the individual-law content (Art. 27 FC) and the institutional dimension of the freedom of economic activity (Art. 94 FC). Biaggini emphasises that both aspects «are closely interrelated and cannot be considered in isolation» (Biaggini, Von der Handels- und Gewerbefreiheit zur Wirtschaftsfreiheit, ZBl 102/2001, p. 241). Rhinow/Schmid/Biaggini/Uhlmann, Öffentliches Wirtschaftsrecht, 2nd ed. 2011, p. 69, refer to the constitutional fundamental decision in favour of a private-sector economic order. The Federal Supreme Court confirmed this dual structure in BGE 138 I 378 E. 6.1 with explicit reference to the Dispatch.
N. 20 It is contested whether Art. 27 FC gives rise to a conditional right to protection against state competition. Biaggini (op. cit., p. 243) and the Federal Supreme Court (BGE 138 I 378 E. 6.2.2) answer this question in the negative in principle: state competition does not constitute an interference with the individual-law freedom of economic activity as long as it does not effectively displace the private offering. Richli (Grundriss des schweizerischen Wirtschaftsverfassungsrechts, 2007, p. 55 para. 179) and Schott (Staat und Wettbewerb, 2010, p. 442 para. 733 f.) take the contrary view that state economic activity always constitutes a de facto impairment of a fundamental right, or is permissible only in cases of market failure. The Federal Supreme Court has expressly characterised the subsidiarity principle in Richli's sense as a mere economic-policy guideline, and not as a justiciable rule of law (BGE 138 I 378 E. 8.4).
5.2 Constitutional Reservation: Art. 27 or Art. 94 FC?
N. 21 During the parliamentary deliberations, it was contested whether the constitutional reservation for derogations from the freedom of economic activity should be anchored directly in Art. 27 FC (as proposed by Minority II; Vallender, Bührer, Weigelt) or only in Art. 94 para. 4 FC (as proposed by the majority and the Federal Council). Academic opinion today is predominantly that the separation does not represent a weakening of fundamental rights protection, because Art. 36 FC applies to Art. 27 FC and Art. 94 para. 4 FC applies to the institutional aspect. Häfelin/Haller/Keller/Thurnherr, Schweizerisches Bundesstaatsrecht, 10th ed. 2020, N 661 ff., consider the systematic separation to be appropriate; Rhinow, Die Bundesverfassung 2000, p. 313, refers to the deliberate decision of the constitutional legislator.
5.3 Scope of Protection Against De Facto Impairments
N. 22 It is contested how far the protection afforded by the freedom of economic activity extends against merely de facto impairments. The case law recognises de facto interferences only with restraint (BGE 138 I 378 E. 6.2.2; BGE 130 I 26 E. 4.4): the decisive factor is whether the de facto effect of a state measure affects those concerned «in the same way as the restriction of a legal entitlement». Müller/Schefer, Grundrechte in der Schweiz, 4th ed. 2008, p. 729, advocate a more generous recognition of de facto interferences; Vallender/Hettich/Lehne, Wirtschaftsfreiheit und begrenzte Staatsverantwortung, 4th ed. 2006, pp. 188 f., emphasise that protection against competition does not in principle exist where the state acts under the same conditions as private operators.
5.4 Equal Treatment of Persons Engaged in the Same Trade or Business
N. 23 The principle of equal treatment of persons engaged in the same trade or business (competitive neutrality) is regarded as flowing from Art. 27 FC (BGE 130 I 26 E. 4.4; BGE 128 I 3 E. 3a). The Federal Supreme Court held in BGE 130 I 26 E. 6.3.3.4 that the requirement of equal treatment of persons engaged in the same trade or business is more stringent than the general principle of equality under Art. 8 para. 1 FC. Whether this principle is to be characterised as an autonomous sub-right within Art. 27 FC or as a corollary of Art. 94 FC has not been definitively resolved in academic opinion (left open in Biaggini, ZBl 102/2001, pp. 241 f.; with differentiation in Rhinow/Schmid/Biaggini/Uhlmann, op. cit., pp. 69 f.).
#6. Practical Notes
N. 24 Sequence of examination in cases of alleged violation: (1) Material scope: Does the activity constitute a private-sector gainful activity? (2) Personal scope: Is the complainant a holder of the fundamental right? (3) Interference: Is there a legal or qualified de facto interference? (4) Justification under Art. 36 FC: legal basis, public interest, proportionality (appropriateness, necessity, reasonableness), core content. (5) Equal treatment of persons engaged in the same trade or business.
N. 25 State economic activity: Where a state enterprise acts against competitors (e.g. by expanding its field of activity), it is not primarily Art. 27 FC but the institutional content of Art. 94 para. 4 FC that applies. The key questions are: formal statutory basis, public interest, competitive neutrality (in particular the prohibition of cross-subsidisation between the monopoly and competitive sectors) (BGE 138 I 378 E. 6.3).
N. 26 Monopolies: Legal monopolies on private land are permissible only where milder means (a licensing requirement combined with substantive rules) would be insufficient. The Federal Supreme Court in BGE 128 I 3 E. 3e departed from its earlier practice on advertising monopolies on private land and held that a licensing requirement combined with substantive rules is sufficient to enforce public interests. De facto monopolies on public land may, by contrast, continue to be compatible with Art. 27 FC if they correspond to a genuine public interest and are proportionate.
N. 27 Concessions: Concessions for the use of public resources (e.g. water use) fall within the scope of protection of Art. 27 FC where they are a prerequisite for private-sector gainful activity. Award criteria must be objective and transparent and must ensure equal treatment of competing applicants (BGE 142 I 99).
N. 28 Relationship to the AFMP and international law: Art. 27 FC and the AFMP are applicable concurrently. The AFMP confers autonomous rights of establishment and professional practice; in purely domestic situations, only national law applies (BGE 130 I 26 E. 3.2). Access restrictions that formally treat domestic and foreign nationals equally are only to be assessed against the AFMP non-discrimination provision where they in fact affect EU nationals more severely (BGE 130 I 26 E. 3.3).
N. 29 Distinction from the guarantee of property (Art. 26 FC): The freedom of economic activity protects the freedom to engage in economic activity, while the guarantee of property protects existing assets. Both guarantees may be simultaneously engaged in cases involving spatial planning or commercial law interferences. Where a measure is found to constitute a disproportionate interference with the freedom of economic activity, a separate examination of the guarantee of property is unnecessary (BGE 128 I 3 E. 3f).
#Case Law
#Scope of Protection and Content of Guarantee
BGE 130 I 26 27 November 2003 Admission stop for medical personnel does not violate economic freedom if it is based on sufficient legal foundation and is proportionate. The decision confirms that even structural market interventions can be compatible with Art. 27 Cst if they serve the public interest.
«Economic freedom does not preclude admission restrictions if they are based on a legal foundation, serve the public interest and are proportionate. Cost containment in healthcare represents a significant public interest.»
BGE 134 I 214 9 May 2008 Begging does not fall under the protection of economic freedom as it does not constitute private economic activity. Fundamental decision on the delimitation of the scope of protection of Art. 27 Cst vis-à-vis other fundamental rights.
«The practice of begging is not guaranteed by Art. 27 Cst. Economic freedom protects private economic activities that are aimed at producing profit or income. The mere solicitation of alms does not constitute such activity.»
BGE 149 I 248 2023 Update of case law on begging bans — begging remains outside the scope of protection of Art. 27 Cst. The Federal Court reaffirms its established case law on the delimitation between economic freedom and personal freedom.
«There is no reason to depart from the case law that begging does not fall under the protection of freedom of expression and economic freedom in the present context.»
#State Economic Activity and Competitive Neutrality
BGE 138 I 378 3 July 2012 Principles for permissible entrepreneurial state activity: legal foundation, public interest, proportionality and competitive neutrality. Landmark decision on the compatibility of state competition with Art. 27 in conjunction with Art. 94 Cst.
«Entrepreneurial activity by the state is compatible with the principle of economic freedom (Art. 94 para. 4 Cst) provided there is a formal legal foundation, the activity serves the public interest and is proportionate, and the principle of competitive neutrality is observed.»
BGE 143 II 425 22 May 2017 Competitively neutral behaviour by state providers in public procurement is a prerequisite for compatibility with Art. 27 Cst. The decision specifies the requirements for state market participants in competitive relationships.
«A violation of the principle of competitive neutrality occurs when a state enterprise receives competitive advantages that are not available to a private enterprise.»
#Spatial Planning and Economic Freedom
BGE 128 I 3 13 November 2001 Poster monopolies on private land constitute a disproportionate interference with economic freedom. Change in practice regarding the compatibility of monopolistic regulations with Art. 27 Cst.
«Unlike a de facto monopoly for poster display on public land, a legal poster monopoly, insofar as it covers private land, constitutes a disproportionate interference with economic freedom; a permit requirement, combined with corresponding substantive norms, is sufficient to enforce the relevant public interests.»
BGE 142 I 162 9 November 2016 Spatial planning measures can be compatible with economic freedom if they are based on a legal foundation and are proportionate. Confirmation of established practice regarding the compatibility of zoning plans with Art. 27 Cst.
«Spatial planning measures are compatible with economic freedom if they are based on a sufficient legal foundation, are justified by an overriding public interest and are proportionate, and ensure equal treatment of competitors.»
#Professional Practice and Professional Access
BGE 141 I 124 2 March 2015 Official defence does not fall within the scope of Art. 27 Cst as it fulfils a state function. Fundamental decision on the delimitation between state and private economic activities.
«Official defence fulfils a state function and does not fall within the scope of Art. 27 Cst. It is remunerated according to the lawyer's tariff of the Confederation or of the canton in which the criminal proceedings were conducted.»
BGE 131 I 223 10 December 2004 Prohibition of the arrangement and mediation of litigation financing is compatible with economic freedom. The decision shows the limits of economic freedom in activities that endanger other legal interests.
«The Federal Lawyers Act (BGFA) exhaustively regulates the professional practice of lawyers. Activities that are incompatible with the proper administration of justice do not fall under the protection of economic freedom.»
#Equal Treatment and Competition
BGE 128 II 292 16 July 2002 The allocation of operational areas to individual operators of helicopter landing sites violates the principle of equal treatment of competitors. The decision specifies the principle of freedom of competition flowing from Art. 27 Cst.
«The allocation of operational areas to a single or few individual operators of helicopter landing sites is incompatible with the requirements of proportionality and equal treatment of competitors.»
#Passive Smoking and Economic Freedom
BGE 136 I 17 23 November 2009 Smoking bans in restaurants are compatible with economic freedom if they serve health protection and are proportionate. The decision shows the justification of interferences with economic freedom through overriding public interests.
«The fact that the Bernese legal order for protection against passive smoking provides no special regulation for the consumption of water pipes in restaurants does not violate constitutional law, in particular not economic freedom.»
#Dog Breeding and Security Law
BGE 136 I 1 13 January 2010 Breeding and keeping bans for certain dog breeds are compatible with economic freedom if they are motivated by security policing considerations. The decision shows the limits of economic freedom in activities with increased risk potential.
«Restrictions on the free exercise of an economic activity are constitutionally permissible if they are based on a sufficient legal foundation, serve the public interest, are proportionate and do not affect the essential content of economic freedom.»
#Commercial Freedom and Municipal Monopolies
BGE 126 I 133 7 June 2000 The distinction between own and third-party advertising in the licensing of advertising measures must be factually justified. The decision specifies the prohibition of arbitrariness in the area of economic freedom.
«Anyone who wants to distribute services for a fee and does not clearly indicate to the targeted audience the missionary goal that may be associated with this must accept that his advertising actions are not privileged from the perspective of religious freedom.»
#Water Management and Concession System
BGE 142 I 99 31 March 2016 Concession systems for water use are compatible with economic freedom if they contain transparent and objective award criteria. The decision confirms the permissibility of state steering in the use of public goods.
«The revised provisions on special use concessions under the water use law of the Canton of Uri, in particular regarding competitive situations in the granting of concessions, are not objectionable under federal law.»
#Medicinal Products Law and Professional Information
BGE 136 I 184 18 January 2010 Official orders to change medicinal product professional information interfere with manufacturers' economic freedom, but are justified if they serve health protection. The decision shows the justification of interferences through significant public interests in healthcare.
«The amendment of professional information for a medicinal product by Swissmedic constitutes an interference with the manufacturer's economic freedom, but is justified by the overriding public interest in health protection.»