Art. 96 BV obliges the Confederation to protect free competition and to take action against harmful restraints on competition. The provision forms the constitutional basis for the entire Swiss competition law.
What does the provision regulate? Art. 96 BV gives the Confederation the mandate to regulate three areas: First, it must enact provisions against cartels and other restraints on competition that are economically or socially harmful (para. 1). Second, it must prevent price abuse by companies with market power (para. 2 lit. a). Third, it must take action against unfair competition (para. 2 lit. b).
Who is affected? All companies that participate in economic life are affected. This includes both private firms and public enterprises. Professional associations and other organisations may also be covered if they make competition-relevant decisions.
What are the legal consequences? Art. 96 BV leads to three important laws: The Cartel Act (SR 251) combats price agreements and market abuse. In case of violations, fines of up to 10% of Swiss turnover for the last three years are threatened (Art. 49a para. 1 CartA). The Price Monitoring Act (SR 942.20) controls the prices of companies with market power. The Unfair Competition Act (SR 241) protects against misleading advertising and other unfair business practices.
Concrete examples: If construction companies secretly agree on prices, the Competition Commission (COMCO) can impose high fines under Art. 7 CartA. If a telephone provider abuses its market power and charges excessive prices, the Price Monitor can order a price reduction under Art. 13 PMA. If a company advertises with false environmental promises, competitors can demand cessation under Art. 9 UCA.
The Competition Commission monitors compliance with these rules. It can initiate investigations (Art. 27 CartA), secure evidence (Art. 42 CartA) and impose sanctions for violations. The Federal Supreme Court has confirmed that cartel fines have a criminal law character and therefore strict procedural guarantees apply (BGE 139 I 72).
N. 1 Art. 96 FC continues the long tradition of Swiss competition legislation. The predecessor provision Art. 31bis para. 3 lit. d aFC empowered the Confederation since 1947 to enact regulations against economically or socially harmful effects of cartels. With the total revision of the Federal Constitution in 1999, this competence was transferred to Art. 96 FC and systematically expanded (BBl 1997 I 387).
N. 2 The Message on the new Federal Constitution emphasizes the character as a legislative mandate: The Confederation is not only empowered but obligated to take action against harmful restraints of competition (BBl 1997 I 387). This obligatory dimension distinguishes Art. 96 FC from mere competence norms.
N. 3 The historical development shows continuous expansion: While Art. 31bis aFC still focused on cartels, Art. 96 FC covers all «other restraints of competition». The explicit mention of price supervision (para. 2 lit. a) and unfair competition (para. 2 lit. b) was already established in Art. 31septies aFC.
N. 4 Art. 96 FC is systematically placed in Title 3 (Confederation, Cantons and Communes), Chapter 3 (Financial and Economic System) of the Federal Constitution. The provision concretizes economic freedom (→ Art. 27 FC) and the principles of the economic system (→ Art. 94 FC).
N. 5 In relation to Art. 94 FC, Art. 96 FC represents the specific competition law manifestation. While Art. 94 establishes the fundamental commitment to a competition-based economic system, Art. 96 concretizes the instruments for enforcing this system (Uhlmann, BSK BV, Art. 96 N. 4).
N. 6 The cross-connections to other economic constitutional norms are manifold: → Art. 95 FC (private economic activity) protects participation in competition, → Art. 97 FC (consumer protection) complements protection against competition distortions, → Art. 100 FC (economic policy) can legitimize competition-restricting measures.
N. 7Competition as protected interest: Art. 96 FC protects competition as an institution and process. According to Uhlmann, the concept of competition encompasses «the process of rivalry between companies for market shares through performance» (BSK BV, Art. 96 N. 4-9). The Federal Administrative Court specifies that market abuse can only be said to exist when effective competition is lacking (BSK BV, Art. 96 N. 20).
N. 8Economically or socially harmful effects: The element of harmfulness is central. Not every restraint of competition is covered, but only those with demonstrably negative consequences. The Federal Court interprets this not as an absolute prohibition of per se rules: «The mention of harmful effects in the constitutional text does not exclude partial prohibitions of demonstrably particularly harmful agreements or conduct» (BGE 135 II 60; Uhlmann, BSK BV, Art. 96 N. 11).
N. 9Cartels and other restraints of competition: The term encompasses horizontal and vertical agreements as well as unilateral conduct by companies with market power. The formulation «other restraints of competition» extends the scope of application beyond classic cartels to all forms of impediments to competition (Uhlmann, BSK BV, Art. 96 N. 15).
N. 10Market power (para. 2 lit. a): A prerequisite for price abuse is a dominant or at least strong market position. The Federal Administrative Court emphasizes: «abusive prices can only exist if no effective competition prevails on the relevant market» (Uhlmann, BSK BV, Art. 96 N. 20). Market power analysis follows economic criteria (market shares, barriers to market entry, potential competition).
N. 11Unfair competition (para. 2 lit. b): Covered are all conduct that violates good faith and impairs the functionality of competition. The norm protects both the institution of competition and individual market participants (Uhlmann, BSK BV, Art. 96 N. 28-30).
N. 12 Art. 96 FC establishes a legislative mandate with obligatory character. The Confederation must take action; complete renunciation of competition legislation would be unconstitutional. However, the design lies within the discretion of the legislator (BBl 1997 I 387).
N. 13 The constitutional norm authorizes preventive and repressive measures. This includes prohibition norms (CartA), control mechanisms (merger control), sanctions (Art. 49a CartA) and flanking instruments such as price supervision (Richli, Leitung der Wirtschaftspolitik, 156).
N. 14 Art. 96 FC does not establish immediate subjective rights. Private parties cannot directly invoke the constitutional norm, but only the concretizing statutes (CartA, UCA, PSA). The norm primarily operates as an objective regulatory provision (Häfelin/Haller/Keller/Thurnherr, Bundesstaatsrecht, N. 1289).
N. 15Permissibility of per se prohibitions: It is controversially discussed whether Art. 96 FC permits per se prohibitions without proof of harmful effects in individual cases. The Federal Court affirms «selective per se prohibitions» for particularly harmful conduct (BGE 135 II 60). Jacobs criticizes this case law as unconstitutional (SJZ 2014, 345). Hoffet warns against fundamental prohibitions without case-by-case examination (Anwaltsrevue 2011, 228). Hilty/Früh conversely consider prohibitions fundamentally qualified as harmful to be constitutionally compliant (in: FS Baudenbacher, 234). The Federal Council proposes a middle way: fundamental prohibition of grave restrictions with possibility of justification on economic grounds (Uhlmann, BSK BV, Art. 96 N. 12).
N. 16Direction of protection: Institution vs. individual protection: It is disputed whether Art. 96 FC primarily protects competition as an institution or also individual competitors. The systematic position close to Art. 94 FC speaks for institutional protection (Zäch, Kartellrecht, 45). However, the prevailing doctrine sees a dual direction of protection: Art. 96 FC protects «competition as an institution as well as the personality of individual competition participants» (David/Jacobs, Wettbewerbsrecht, 67; Uhlmann, BSK BV, Art. 96 N. 4).
N. 17Relationship between cartel law/unfair competition law: The delineation between para. 1 (cartel law) and para. 2 lit. b (unfair competition law) is not clear-cut. Borer advocates for a clear separation according to the object of protection: cartel law protects competition, unfair competition law protects fairness (Wettbewerbsrecht I, N. 15). Baudenbacher conversely sees fluid transitions, since unfair conduct often also has competition-restricting effects (Lauterkeitsrecht, 45).
N. 18 When examining restraints of competition, the three-stage analysis must always be conducted: (1) Is there a restraint of competition? (2) Is this economically or socially harmful? (3) Are justification grounds given? The mere existence of a restriction is not sufficient for inadmissibility.
N. 19Sector-specific exceptions are to be interpreted restrictively. Art. 3 para. 1 CartA only excludes competition insofar as state market or price regulations leave no room. The exception only applies to the directly regulated area (BGE 141 II 66).
N. 20 For international matters, the extraterritorial application of Swiss competition law must be examined according to the effects principle. Conduct abroad is subject to Swiss law if it affects the Swiss market (Art. 2 para. 2 CartA).
N. 21 The procedural guarantees under Art. 6 and 7 ECHR apply without restriction as soon as sanctions threaten. The Federal Court qualifies cartel law fines as «criminal» within the meaning of the ECHR (BGE 139 I 72). Companies must not incriminate themselves (nemo tenetur principle).
N. 22 In sanction assessment under Art. 49a CartA, the severity and duration of the violation, the profit achieved and willingness to cooperate must be considered. The upper limit of 10% of Swiss turnover of the last three years applies absolutely.
N. 23Compliance programs can mitigate sanctions but do not exclude them. Preventive measures must be credibly implemented and enforced. The mere existence of guidelines is not sufficient (COMCO practice).
#Constitutional Foundations of Competition and Antitrust Law
BGE 139 I 72 of 29 June 2012 (Publigroupe SA et al. v. COMCO)
Art. 96 FC forms the constitutional basis for antitrust sanctions under Art. 49a CartA. The Federal Supreme Court confirmed that antitrust sanctions have a criminal or quasi-criminal character and that the guarantees of Art. 6 and 7 ECHR as well as Art. 30 and 32 FC are applicable.
«Art. 96 para. 1 FC obliges the Confederation to issue regulations against economically or socially harmful effects of cartels and other restraints of competition. This constitutional authorisation forms the basis for the Cartel Act and also justifies the imposition of sanctions for the enforcement of competition law.»
BGE 143 II 297 of 28 June 2016 (Colgate-Palmolive Europe Sàrl v. COMCO)
The Federal Supreme Court found that Art. 96 FC not only grants the Confederation the power, but obliges it to combat economically or socially harmful restraints of competition. The provision legitimises both preventive and repressive measures.
«The constitutional mandate of Art. 96 FC is not merely an authorisation, but an obligation of the Confederation to act. This encompasses both the creation of substantive norms and their effective enforcement through appropriate sanctions.»
#Demarcation of Competences and Scope of Application
BGE 129 II 18 of 1 January 2002 (Book Price Maintenance)
The Federal Supreme Court clarified the scope of application of Art. 96 FC in relation to sector-specific regulations. The constitutional mandate applies comprehensively to all areas of the economy, insofar as no special constitutional foundations intervene.
«Art. 96 FC aims to prevent economically or socially harmful effects of cartels and other restraints of competition and thereby to promote competition in the interest of a liberal market economy order. This mandate applies in principle to all economic sectors.»
#Price Supervision as a Complement to Competition Law
BGE 130 II 449 of 14 June 2004 (Cable Network Price Supervision)
The Federal Supreme Court confirmed that Art. 96 para. 2 lit. a FC forms the legal basis for measures against abuses in price formation by market-dominant companies. Price supervision under the PSA complements competition law in combating market abuse.
«Art. 96 para. 2 lit. a FC authorises the Confederation to take measures to prevent abuses in price formation by market-dominant companies. This provision forms the constitutional basis for price supervision as a specific instrument alongside general competition law.»
BGE 135 II 60 of 12 December 2008 (Notification and Opposition Procedure)
The Federal Supreme Court clarified that constitutional procedural guarantees must also be observed in special competition law procedures. Art. 96 FC does not establish an exception to general procedural principles.
«The constitutional authorisation of Art. 96 FC to combat restraints of competition does not release the legislator from observing general procedural guarantees. Special competition law procedures must also meet rule-of-law requirements.»
Judgment 2C_561/2022 of 23 April 2024 (Swisscom v. Sunrise UPC)
In a recent decision, the Federal Supreme Court reaffirmed that Art. 96 FC encompasses both competition law and unfair competition law. The constitutional mandate extends to all forms of unfair competition that impair free competition.
«Art. 96 FC contains a comprehensive constitutional mandate to promote competition. This encompasses both the fight against cartels and market abuse as well as measures against unfair competition within the meaning of Art. 96 para. 2 lit. b FC.»
BGE 141 II 66 of 1 January 2015 (Pharmaceutical Advertising Ordinance)
The Federal Supreme Court clarified that Art. 96 FC also serves as guidance in the interpretation of international competition rules. The Swiss competition order should harmonise with international standards without abandoning its independence.
«In the application of competition law, even with international connections, it must always be examined whether Art. 96 FC opens up an independent constitutional scope of protection. The Constitution requires a functional competition order according to Swiss principles.»