Facts
The Swisscom Group is active in the provision of services for voice and data communication. It emerged from the spin-off of the telecommunications division of the former PTT and is the legal successor of the former state monopoly in the telecommunications sector. Until 2002, Swisscom AG itself operated the core businesses of network-based communication, mobile communication, and integrated systems. Thereafter, these areas were spun off into 100% subsidiaries.
The Competition Commission (WEKO) received indications from Internet Service Providers that Swisscom was charging high prices for ADSL wholesale services, which did not leave them sufficient margin compared to Swisscom's end-customer prices. WEKO then opened an investigation to determine whether Swisscom's pricing policy could constitute an abuse of a dominant market position under Art. 7 of the Cartel Act.
After granting the right to be heard, WEKO issued a decision stating that Swisscom (Schweiz) AG and Swisscom AG held a dominant market position in the wholesale market for broadband services until the end of 2007 and abused this position through their pricing policy, which created a disparity between wholesale prices and end-customer prices.
Considerations
The lower court, the Federal Administrative Court, concluded after examining the historical cost and price data of the appellants that a cost-price squeeze existed from 2001 to 2007. The appellants claimed that profits were generated from 2008 onwards and that losses in the initial years were common, but the lower court rejected the application of the income value method as unsuitable. Instead, it conducted a periodic analysis of the historical costs, which led to the finding of a cost-price squeeze from 2001 to 2007.
The Federal Supreme Court confirmed the lower court's finding that the structural prerequisites for a cost-price squeeze (market dominance, vertical integration,…