Facts

Parties: [A. AG] (Appellant 1), [B.] (Appellant 2), [C.] (Respondent)

Court: Swiss Federal Supreme Court, I. Civil Law Division

Date of Judgment: April 18, 2023

Facts:

  • The appellants reported in the [Z.] newspaper about the respondent and its subsidiary companies, mainly between January and August 2018.
  • The reports addressed topics such as the establishment of the respondent, the [D.] family compensation fund, the cantonal control system in the area of labor market control for the construction industry, a [P.] procedure, and a court case concerning public procurement law.
  • The respondent sued in the Cantonal Court of Basel-Landschaft and requested findings, deletions, and publications.
  • The Cantonal Court partially upheld the claim and ordered deletions and publications.
  • The appellants filed an appeal with the Federal Supreme Court.

Considerations

The Federal Supreme Court examines the appeal considering the general requirements for reasoning. It applies the law ex officio and generally only examines the allegations raised, unless the legal deficiencies are blatantly obvious.

The Federal Supreme Court bases its judgment on the facts established by the lower court. It can only correct or supplement the factual findings of the lower court if they are obviously incorrect or based on a violation of the law within the meaning of Art. 95 FSCA. In addition, the remedy of the defect must be capable of being decisive for the outcome of the proceedings.

The lower court's evaluation of evidence is only arbitrary if it is obviously untenable. This is the case when the court has obviously misunderstood the significance and scope of a piece of evidence, has disregarded an important and decisive piece of evidence without any factual reason, or has drawn untenable conclusions based on the established facts.

The reasoning must be provided in the appeal itself. The appellant party may not use any possible reply to supplement or improve its appeal. Only submissions that are prompted by the statements in the observations of another party to the proceedings are admissible.

The dispute is whether the contested reporting qualifies as unfair within the meaning of Art. 3 Abs. 1 lit. a UCA. According to Art. 3 Abs. 1 lit. a UCA, anyone who denigrates others, their goods, works, services, their prices, or their business relationships through false, misleading, or unnecessarily offensive statements acts unfairly. A statement is denigrating if it defames the other party, their goods, etc., i.e., makes them contemptible. Not every negative statement is sufficient for this; it must have a certain gravity. For example, a product is made contemptible if it is described as worthless, not worth its price, unusable, defective, or harmful. For a denigrating statement to be qualified as unfair, it must also be either false, misleading, or unnecessarily offensive.

The media do not enjoy a special status in unfair competition law. Their liability is subject to general principles. However, the concept of unfairness, i.e., illegality, must be interpreted in conformity with the constitution, in particular in the light of Art. 16 Cst. (freedom of opinion and information) and Art. 17 Cst. (media freedom). The application of the UCA to the media must not hinder their function in economic life. This function consists in particular in informing the public about facts of general interest and about economic events, with the aim of promoting the exchange of opinions and public debate.

Whether a statement unfairly denigrates a person's personality is not to be assessed according to the subjective perception of the affected party, but according to an objective standard. For the assessment of the interference, its severity, and the question of which statements can be derived from the overall context of an article, the horizon of perception of the average reader must be taken into account.

The appellants complain that the lower court fails to recognize that no competition-related actions are to be assessed, making the UCA inapplicable. Consequently, the lower court also lacks the material jurisdiction. According to the UCA, only behaviors are prohibited that qualify as competitive actions, i.e., actions that are objectively aimed at influencing competitive relationships and do not occur in a completely different context. The behavior of the infringer must therefore be market-relevant, market-oriented, or competition-directed. Competition can only exist where the activity of the actor has effects or is capable of having effects outside of their own, private sphere. Only actions that improve or diminish the success of profit-seeking companies in the struggle for customers, increase or decrease their market shares, or are objectively suitable for this purpose are competition-relevant. The decisive factor is the economic relevance in the sense of an abstract suitability for influencing competition, with the objective suitability being sufficient and it being irrelevant whether there is a subjective intention to engage in economic activity.

The lower court considered that the respondent had stated that it provided numerous services for its customers and members (e.g., legal and business consulting, communication services, etc.) and that it was in competition with other associations and companies (e.g., [J.] ) in this respect. To prove its participation in competition, which was disputed by the appellants, the respondent submitted its statutes and stated that it carried out the described business activities. This shows that it participates in economic life. The appellants had generally doubted the competitive position of the respondent but had not substantively contested its statements regarding its field of activity.

The appellants complain that the respondent lacks standing. The lower court violated Art. 9 and 10 UCA by affirming its standing. According to Art. 9 Abs. 1 UCA, anyone who is threatened or harmed in their clientele, credit, or professional reputation, in their business operations, or otherwise in their economic interests by unfair competition is entitled to bring an action for injunction, removal, or declaration. Entitled to bring an action are legal entities that themselves participate in economic competition and can assert their own economic interests. Required is an immediate interest in securing or improving their own position in competition with the success of the lawsuit. Furthermore, professional and economic associations are also entitled to bring an action under Art. 9 Abs. 1 and 2 UCA - but not with regard to reparatory claims under Art. 9 Abs. 3 UCA - if they are authorized to protect the economic interests of their members according to their statutes. Professional and economic associations are associations with legal personality whose members participate in competition and come together for economic reasons. Art. 10 Abs. 2 lit. a UCA grants professional and economic associations an independent right to bring an action under special conditions. The right to bring an action of the association is therefore not derived from the right of those whose interests the economic association protects.

The lower court affirmed the respondent's standing to sue both under Art. 9 Abs. 1 UCA and Art. 10 Abs. 2 lit. a UCA. Regarding Art. 9 Abs. 1 UCA, the lower court considered that unfair practices - as suggested in the reports according to the respondent - are generally capable of harming its economic interests, namely by raising doubts about the proper handling of collective labor agreements, the advantages of membership, a correct billing method, and generally about the serious handling of mandates and the ability to be a serious promoter of SMEs. Negative effects - such as the loss of members or reputational damage - are also abstractly capable of influencing the interests of the respondent (perceived for the members). The respondent's standing to sue is therefore to be affirmed under Art. 9 Abs. 1 UCA.

The appellants complain that although the lower court makes general legal statements to understand a statement, it does not conduct any concrete investigations into the readership of the [Z.] (or a regionally anchored daily newspaper). It remains silent on how it classifies the average reader of the [Z.] . This lacks sufficient factual findings and legally sufficient reasoning of the judgment (Art. 29 Abs. 2 Cst.). The appellants are right in that the lower court does not explicitly describe which average reader it is based on. However, this does result indirectly, as it explains in each case how the average reader has understood a statement or reporting. A proper challenge was in any case possible.

In a next step, the individual (still disputed) reports must be addressed. The appellants essentially claim in summary that there is already a lack of denigration. Alternatively, they complain that even if denigration were to be affirmed, there is a lack of qualified denigration. Furthermore, they complain about a violation of media freedom (Art. 17 Cst.) and, regarding the assessment of comments, also a violation of freedom of opinion and information (Art. 16 Cst.). Alternatively, they claim that a comprehensive deletion of the reporting is disproportionate (Art. 36 Cst.).

Disputed is the reporting in the regional section of X. January 2018 under the title: "What is at stake for [L.] [Director of the Respondent]". The lower court considered that the denigrating basic statement of the article goes in the direction that the respondent is accused of immoral business methods in the area of the family compensation fund. That it levies higher taxes on the wage sum is correct and not disputed. The article becomes inaccurate, however, when assumptions are made as to why, despite the burden-sharing, differences in the contribution level exist. The half-truth and, in particular, the misleading component lies in the fact that the average reader comes to the conclusion that the existing structures in the family compensation fund were mainly created with a view to financing the association's activities, which was confirmed by an expert (Professor [M.] ), who analyzed the whole on behalf of the [Z.] . However, he had given the opposite to the record, namely that it is generally widespread that the funds from the compensation funds of the economic associations are also used for their own association activities, without making concrete reference to the circumstances at the respondent and its family compensation fund [D.] , because he did not know them well enough. He had also expressly distanced himself from the claim in the report that he had analyzed the respondent's construct. In addition to misleading the readership about the analysis of the concrete processes and circumstances at the [D.] that did not actually take place, confusion is also created by the impression that…