1The Confederation and the Cantons shall abide by the principle of economic freedom.
2They shall safeguard the interests of the Swiss economy as a whole and, together with the private sector, shall contribute to the welfare and economic security of the population.
3They shall endeavour within the scope of their powers to create favourable general conditions for the private sector.
4Any divergence from the principle of economic freedom, and in particular measures designed to restrain competition, shall be permitted only if they are provided for in the Federal Constitution or based on cantonal monopoly rights.
Art. 94 FC is the fundamental norm of the Swiss economic constitution (Uhlmann, BSK BV, Art. 94 N. 1). The provision commits the Confederation and the cantons to the principle of economic freedom. This means a fundamentally state-free economic order with private economic initiative and functioning competition (Vallender, SG Komm. BV, Art. 94 N. 5).
The norm regulates four central aspects: First, all state authorities must adhere to the principle of economic freedom (para. 1). Second, they shall work with the private sector to contribute to welfare and economic security (para. 2). Third, they must create favourable framework conditions for the private economy (para. 3). Fourth, deviations from the principle are only permitted if the Federal Constitution provides for them or if cantonal regalia justify them (para. 4).
All natural and legal persons who are economically active or wish to become economically active are affected. Art. 94 FC protects both free market access and the free exercise of professions (BGE 142 I 162). The norm functions as an objective constitutional standard and complements the individual fundamental right of economic freedom under Art. 27 FC (Häfelin/Haller/Keller/Thurnherr, Bundesstaatsrecht, N. 1654).
The legal consequences are far-reaching: State measures that violate the principle are unconstitutional unless an exception applies (BGE 142 I 99). However, the Federal Supreme Court has clarified that state economic activity is generally permissible based on lived constitutional practice, as long as it does not displace private supply (Uhlmann, BSK BV, Art. 94 N. 11–12; BGE 138 I 378).
A practical example: A canton cannot simply establish a municipal internet company that competes directly with private providers. It must demonstrate that a public interest exists and that competitive neutrality is maintained (BGE 143 II 425). On the other hand, it may grant concessions for hydropower as a cantonal regale, since this is excluded from the scope of economic freedom (BGE 142 I 99).
The provision is central to the relationship between state and economy in Switzerland. It guarantees a market economy order but allows state corrections in cases of market failure (Rhinow/Schefer/Uebersax, Verfassungsrecht, § 11 N. 34).
N. 1 Art. 94 Federal Constitution essentially adopts the principles of the economic constitution of the old Federal Constitution (Art. 31 para. 1 old Federal Constitution). The provision was systematically repositioned and linguistically modernised during the total revision of 1999, without any substantive change being intended (Federal Gazette 1997 I 247). The constitutional legislator wanted to maintain the proven Swiss economic order, which is based on private economic initiative but permits state intervention to correct market failures.
N. 2 The legislative history shows a tension between liberal economic order and social market economy. While the 1996 Message still spoke of a "social market economy," the more neutral formulation of the "principle of economic freedom" ultimately prevailed (Federal Gazette 1997 I 248). This terminological decision reflects the compromise character of the Swiss economic constitution between market freedom and state intervention.
N. 3 Art. 94 Federal Constitution stands at the beginning of Section 3 ("Economy") of Title 3 of the Federal Constitution and represents the fundamental norm of the Swiss economic constitution (Uhlmann, BSK BV, Art. 94 N. 1). The provision has a dual nature: it is both an objective constitutional norm and the basis for the fundamental right of economic freedom anchored in Art. 27 Federal Constitution.
N. 4 The systematic connections are manifold: → Art. 27 Federal Constitution concretises the individual rights dimension, → Art. 95–107 Federal Constitution contain sectoral economic provisions, → Art. 36 Federal Constitution regulates the requirements for restrictions on fundamental rights, ↔ Art. 5 Federal Constitution (rule of law principle) and Art. 3 Federal Constitution (federalism) form the constitutional framework.
N. 5Principle of economic freedom (para. 1): The norm postulates an economic order that is fundamentally free from state interference. However, the Federal Supreme Court emphasises that state economic activity is permissible based on lived constitutional practice and does not constitute a restriction on fundamental rights, as long as private supply is not directly displaced (Uhlmann, BSK BV, Art. 94 N. 11–12; BGE 138 I 378 consideration 5.3).
N. 6Competition: The principle includes in particular the competition principle (Uhlmann, BSK BV, Art. 94 N. 5–9). State measures must be designed to be competition-neutral. This means in particular the prohibition of systematic cross-subsidisation between monopoly and competitive sectors (BGE 143 II 425).
N. 7Internal market: Art. 94 Federal Constitution guarantees the Swiss internal market (Uhlmann, BSK BV, Art. 94 N. 10). Cantonal barriers to market access are only permissible under the conditions of Art. 95 para. 2 Federal Constitution.
N. 8Welfare and economic security (para. 2): This provision obliges the Confederation and cantons to cooperate with the private sector. It establishes a state objective without direct justiciability (Uhlmann, BSK BV, Art. 94 N. 14–17; Vallender, SG Komm. BV, Art. 94 N. 8).
N. 9Favourable framework conditions (para. 3): The state should create optimal conditions for private economic activity. This includes legal certainty, functioning infrastructure and macroeconomic stability (Uhlmann, BSK BV, Art. 94 N. 18–20; Rhinow/Schefer/Uebersax, Verfassungsrecht, § 11 N. 34).
N. 10Constitutional reservation (para. 4): Deviations from the principle of economic freedom are only permissible if they are provided for in the Federal Constitution (e.g. Art. 98 Federal Constitution for the National Bank, Art. 103 Federal Constitution for structural policy) or are justified by cantonal regalia rights (Uhlmann, BSK BV, Art. 94 N. 21–26).
N. 11Normative effect: Art. 94 Federal Constitution has direct normative effect. State action that violates the principle of economic freedom is unconstitutional, provided no exception under para. 4 exists (BGE 142 I 99 consideration 5.2).
N. 12Standard of review: When reviewing state measures, Art. 94 Federal Constitution serves as an objective constitutional standard. The review follows a two-stage process: Is there a deviation from the principle? If so: Is it covered by constitutional reservation or cantonal regalia rights?
N. 13Legislative mandate: Paras. 2 and 3 contain legislative mandates to the Confederation and cantons. These must be observed in the design of the economic order, but do not establish enforceable subjective rights (Häfelin/Haller/Keller/Thurnherr, Bundesstaatsrecht, N. 1654).
N. 14State economic activity: The permissibility of state economic activity is disputed. The Federal Supreme Court relies on "lived constitutional practice" (BGE 138 I 378). Parts of the doctrine criticise this as methodologically problematic, since constitutional interpretation should not be determined by factual practice (critical: J. Reich, Grundsatz der Wirtschaftsfreiheit, p. 234; approving: Richli, Wirtschaftsverfassungsrecht, § 4 N. 89).
N. 15Subsidiarity principle: It is controversial whether Art. 94 Federal Constitution establishes a justiciable subsidiarity principle. The Federal Supreme Court sees it as an economic policy guideline without legal bindingness (Uhlmann, BSK BV, Art. 94 N. 11). The doctrine is split: Biaggini (Komm. BV, Art. 94 N. 5) affirms a certain normative force, while Rhinow (Wirtschafts- und Eigentumsverfassung, p. 156) rejects this.
N. 16Relationship to Art. 27 Federal Constitution: The relationship between the objective norm (Art. 94 Federal Constitution) and the fundamental right (Art. 27 Federal Constitution) is disputed. The prevailing doctrine sees Art. 94 Federal Constitution as an objective fundamental norm with a broader scope of protection (Vallender/Hettich/Lehne, Wirtschaftsfreiheit, p. 89), while others assume extensive congruence (Müller/Schefer, Grundrechte, p. 1023).
N. 17Order of examination: In legal assessment, it must first be examined whether a state measure affects the scope of protection of economic freedom. Then it must be investigated whether there is a restriction and whether this is justified (→ Art. 36 Federal Constitution) or whether an exception under Art. 94 para. 4 Federal Constitution applies.
N. 18Distinction from police goods: Measures to protect police goods (health, safety, environment) do not fall under Art. 94 para. 4 Federal Constitution, but are to be assessed according to Art. 36 Federal Constitution. The distinction can be difficult in individual cases (BGE 130 I 26 consideration 4.3).
N. 19Cantonal regalia rights: When invoking cantonal regalia rights, it must be proven that the regalia has grown historically and has been exercised continuously. New "regalia" can no longer be established (BGE 142 I 99 consideration 5.4).
N. 20European law: In cross-border matters, the bilateral agreements must be observed, in particular the Agreement on the Free Movement of Persons and sectoral agreements. These may contain more extensive liberalisation obligations than Art. 94 Federal Constitution (BGE 130 I 26 consideration 3).
BGE 128 I 3 of 13.11.2001
The Federal Supreme Court decided on the admissibility of municipal poster monopolies on private property. A legal poster monopoly covering private property constitutes a disproportionate interference with economic freedom.
«Unlike a de facto monopoly for poster display on public property, a legal poster monopoly, insofar as it covers private property, constitutes a disproportionate interference with economic freedom; a licensing requirement, combined with corresponding substantive norms, suffices to enforce the relevant public interests.»
BGE 142 I 162 of 9.11.2016
The Federal Supreme Court examined the compatibility of a tourist zone with economic freedom. Spatial planning measures must be based on a sufficient legal basis and be proportionate.
«Economic freedom includes in particular the free choice of profession as well as free access to a private economic activity and its free exercise. Economic freedom applies equally to natural and legal persons.»
BGE 150 I 120 of 23.2.2024
The Federal Supreme Court decided on the Geneva regulation of taxi and transport services. Cantonal regulations on professional practice conditions may restrict economic freedom, but must be proportionate.
«A cantonal regulation which gradually restricts the use of taxis and transport vehicles with chauffeur according to their energy efficiency does not fall under the licensing of vehicles for road traffic, but under the requirements for exercising a profession requiring a licence, for which the cantons are responsible.»
#State Economic Activity and Competitive Neutrality
BGE 138 I 378 of 3.7.2012
The Federal Supreme Court dealt with the admissibility of state insurance activity by the Cantonal Property Insurance of Glarus. Decisive for compatibility with Art. 94 of the Federal Constitution are a formal legal basis, public interest and competitive neutrality.
«Entrepreneurial activity by the state is compatible with the principle of economic freedom (Art. 94 para. 4 of the Federal Constitution) provided there is a formal legal basis, the activity serves the public interest and is proportionate and the principle of competitive neutrality is preserved.»
BGE 143 II 425 of 1.1.2017
The Federal Supreme Court decided on the exclusion of state enterprises from public procurement procedures due to competition-distorting cross-subsidisation. Competitive neutrality prohibits systematic cross-subsidisation between monopoly and competition sectors.
«The competitive neutrality of entrepreneurial state activity prohibits systematic cross-subsidisation between monopoly and competition sectors.»
BGE 142 I 99 of 31.3.2016
The Federal Supreme Court decided on the compatibility of Uri water concession regulations with economic freedom. Cantonal regalia rights are excluded from the scope of application of economic freedom.
«Water sovereignty constitutes a cantonal regalia right, which is why the power of disposal over public waters is excluded from the scope of application of economic freedom. Concession granting lies within the discretionary power of the concession authority.»
#Professional Access Regulation and Licensing Requirements
BGE 130 I 26 of 27.11.2003
The Federal Supreme Court confirmed the admission stop for doctors to practice at the expense of health insurance. Federal admission restrictions are compatible with economic freedom if they are proportionate.
«The restriction on the admission of service providers to activity at the expense of compulsory health care insurance, issued by the Federal Council based on Art. 55a of the Health Insurance Act and specified by the Government Council of the Canton of Zurich, violates neither the Agreement on the Free Movement of Persons nor economic freedom.»
BGE 131 I 223 of 10.12.2004
The Federal Supreme Court decided on the prohibition of agreeing and mediating litigation financing. Professional practice prohibitions must be based on a sufficient legal basis and be proportionate.
«The prohibition of agreeing and mediating litigation financing constitutes a serious interference with economic freedom and requires a clear legal basis.»
BGE 148 II 392 of 18.5.2022
The Federal Supreme Court confirmed DNS access blocks for illegal online gambling. Foreign providers cannot invoke economic freedom for market access if they violate Swiss law.
«Foreign providers of online gambling not licensed in Switzerland cannot invoke economic freedom and the jurisprudence of the ECJ or the EFTA Court on the freedom of establishment and freedom to provide services under Union law for market access.»
BGE 143 I 388 of 2.4.2017
The Federal Supreme Court decided on the funeral monopoly in the Canton of Zurich. State monopolies are compatible with economic freedom if they are based on a sufficient legal basis and fulfil public tasks.
«The funeral sector has been monopolised in the Canton of Zurich and configured as a public task of the municipality. The monopoly is based on a sufficient legal basis with § 55 of the Health Act of Zurich.»
BGE 143 I 403 of 21.7.2017
The Federal Supreme Court confirmed the constitutionality of the Neuchâtel minimum wage. State-determined minimum wages constitute permissible social policy measures that are compatible with economic freedom.
«A legislative amendment that determines a minimum wage for the Canton of Neuchâtel with the aim of guaranteeing all employees an appropriate wage does not violate economic freedom.»
BGE 136 I 17 of 23.11.2009
The Federal Supreme Court decided on smoking bans in catering establishments. Health protection regulations may restrict economic freedom if they are proportionate.
«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.»
BGE 151 I 194 of 3.12.2024
The Federal Supreme Court decided on the admissibility of a cantonal obligation for electronic communication with authorities for lawyers. The digitalisation obligation constitutes only a minor interference with economic freedom.
«Obliging professional party representatives to submit filings to cantonal administrative and judicial authorities electronically and to provide signature-required filings with a qualified electronic signature constitutes a minor interference with economic freedom.»