Reform of the Competition Authorities – A critical Assessment of the Federal Council’s Proposal

In a series of seven posts published on their LinkedIn channel, CORE Attorneys assessed the individual elements of the Federal Council’s proposal for the reform of the Swiss competition authorities in light of the principles of the rule of law, effectiveness, and efficiency. Following repeated requests, these posts have been consolidated into the present article.

Institutional Reform (1/7): A Critical Assessment of the Federal Council’s Proposal

On 20 May 2026, the Swiss Federal Council adopted the dispatch (in German, Italian and French only) concerning amendments to the Swiss Cartel Act (CartA) and the Federal Administrative Court Act (FACA) (in German, Italian and French only).

Following the most recent revision of the Cartel Act, this marks another step in the reform of Swiss competition law. The focus lies on institutional and procedural adjustments concerning the Swiss Competition Commission (COMCO) and the Swiss Federal Administrative Court (FAC).

The proposal largely follows the recommendations contained in the report (in German only) of the expert commission appointed by the Federal Council. It envisages a clearer separation between COMCO and its Secretariat by ensuring that investigations are conducted without COMCO’s involvement. At the same time, the Secretariat’s role during the decision-making phase is to be reduced. Furthermore, the number of COMCO members is to be reduced from the current 11-15 to 5-7 members, with a stronger emphasis on relevant professional expertise.

In addition, the defence rights of companies subject to proceedings are to be strengthened. The Secretariat will be required to communicate preliminary findings (preliminary statement of objections) no later than twelve months after the opening of an investigation. At the FAC, judges with expertise in economics and competition law are to be appointed.

The consultation process conducted by the Federal Department of Economic Affairs, Education and Research (EAER) demonstrated broad support for the reform initiative in principle. Differences emerged, however, regarding the scope and depth of the institutional reforms.

Institutional Reform (2/7): Correct Diagnosis, inadequate Remedy

With its proposal, the Federal Council acknowledges the institutional shortcomings that have been debated for years. Its diagnosis is accurate: the insufficient separation between the investigating and effectively «prosecuting» Secretariat and the decision-making COMCO lies at the heart of the rule-of-law concerns. The expert commission appointed by the Federal Council had already described a stronger separation as desirable from a constitutional and procedural perspective.

However, the legislative proposal falls clearly short of addressing this diagnosis. It follows the «optimised status quo» option and relies on a smaller COMCO, the elimination of the Presidency’s involvement during investigations, and a statutory clarification of the Secretariat’s role in decision deliberations. Yet the structural dependence of COMCO on its Secretariat remains unchanged. The same Secretariat officials who drafted the draft decision (and are therefore already committed to a particular outcome) will continue to draft the final decision itself. A genuine separation is therefore not achieved.

The «optimised status quo» prioritises administrative effort, costs, system coherence, and ultimately political feasibility rather than effectively addressing the identified deficiencies. The quasi-criminal nature of direct sanctions under Article 49a CartA, recognised by the Swiss Federal Supreme Court (BGE 139 I 72, Publigroupe; in German only), requires a more far-reaching institutional response. If the core problem is correctly identified but not addressed in practice, the reform risks entrenching rather than remedying existing shortcomings.

Institutional Reform (3/7): Reducing the Size of COMCO does not address the Core Problem

Article 18(2) Draft CartA provides for a reduction in COMCO’s membership from 11-15 to 5-7 members. The measure is intended to clarify responsibilities and align COMCO more closely with other federal regulatory commissions.

The proposal does nothing to remedy the institutional deficit. Even a smaller COMCO remains a part-time authority facing a full-time Secretariat that often has years of involvement in a case. The imbalance in resources, case knowledge, and duration of involvement remains unchanged.

Moreover, a smaller COMCO will likely exclude precisely those members who have been most willing to critically scrutinise the work of the Secretariat.

Improving enforcement effectiveness would require creating the conditions for an independent decision-making authority. This is absent from the proposal. At a minimum, COMCO requires its own case-handling staff and corresponding resources. This would be entirely feasible and is justified given the Secretariat’s prior involvement. Alternatively, a judicial model could be implemented directly.

If the Federal Council’s proposal remains unchanged, the reform amounts to little more than symbolic politics.

Institutional Reform (4/7): The Role of the Secretariat: A Restriction that is difficult to verify

Article 23(1bis) Draft CartA allows the Secretariat to continue participating in COMCO meetings but restricts its role, in the absence of the parties, to answering questions; advocacy is no longer permitted. This is intended to strengthen the separation between investigation and decision-making.

However, the identified deficiencies concerning the insufficient separation between the Secretariat and COMCO are not effectively addressed.

First, the restriction is practically impossible to verify. Since the parties are excluded from the deliberations, there is no effective way to distinguish between permissible answers to questions and impermissible substantive advocacy. Any concerns regarding the Secretariat’s influence therefore remain unresolved.

Second, the distinction is unlikely to work in practice. The questions posed by COMCO are answered by the same officials who conducted the investigation and authored the draft decision. It is only natural that they will defend their own findings. The expert commission explicitly identified this phenomenon as a confirmation bias.

As long as the parties cannot participate in the decisive deliberations while the investigating Secretariat can, the rights to be heard and the principle of equality of arms remain compromised.

A more appropriate solution would be for the Secretariat to relinquish the case entirely after submitting its proposal, similar to a public prosecutor after filing an indictment, and for COMCO (supported by its own staff) or an independent court to review the matter afresh and independently.

Institutional Reform (5/7): Preliminary Statement of Findings – Correct Approach, incomplete Design

Under Article 28a Draft CartA, the Secretariat must communicate  preliminary findings (preliminary statement of objections) no later than twelve months after opening an investigation. This obligation is inspired by Article 6(3)(a) ECHR and represents a welcome approximation to the principle of formal accusation. It enables parties to comment on the allegations and submit evidence at an early stage.

However, two aspects significantly reduce the usefulness of the instrument.

First, the allegations are not fixed. In the past, allegations have been substantially modified or expanded after a preliminary findings had already been communicated. If such changes remain unrestricted, the practical value of the communication is severely diminished.

Second, the obligation may reinforce confirmation bias by forcing the Secretariat to commit to a position at an early stage. The measure is therefore sensible only if accompanied by safeguards ensuring that the final decision is taken by a COMCO clearly separated from the Secretariat or by an independent competition court. Absent such safeguards, the strict time limit should arguably be abandoned as well.

The instrument becomes a genuine improvement for procedural rights only when embedded in a coherent overall framework.

Institutional Reform (6/7): Specialist Judges at the FAC do not go far enough

The real need for efficiency improvements exists at the judicial level. According to the report of the expert commission appointed by the Federal Council, proceedings before the FAC take far too long. In addition, economic expertise is often lacking. Against this background, part-time specialist judges are to be introduced (Articles 1(3bis) and 5(3) Draft FACA).

These specialist judges are not merely advisory. They are full voting members of the judicial panel; only participation in the court’s self-governance is excluded (Article 16(1) Draft FACA).

Specialist judges are a step in the right direction, since effective enforcement of competition law requires substantial economic expertise within the adjudicating body. Nevertheless, this measure alone is insufficient. The fundamental problem of judicial review runs deeper and is not addressed by the Federal Council’s proposal. As long as the court remains restrained in establishing the facts and grants COMCO a broad «technical discretion», full judicial review remains limited in practice.

Structural factors further aggravate the situation. These begin with the election of FAC judges, which tends to reflect political party proportionality rather than professional expertise. Additional factors include resource allocation in competition with other divisions, appointments from unrelated legal fields, and the court’s orientation towards written administrative proceedings, which limits direct and in-depth scrutiny of COMCO decisions.

Particularly excessive is the proposed prohibition preventing part-time judges from representing parties before either the FAC or COMCO (Article 6(2) Draft FACA). General conflict-of-interest rules, similar to those applied at the Swiss Federal Patent Court, would be sufficient. The proposed ban unnecessarily narrows an already limited pool of qualified candidates.

Institutional Reform (7/7): Better Alternatives exist

The proposal rejects a more far-reaching separation between the Secretariat and COMCO primarily on grounds of administrative effort, costs, and system coherence. These objections are unconvincing.

Meaningful improvements could already be achieved within the existing framework. A clear separation between the investigative function (Secretariat) and the decision-making function (COMCO) alone would address the identified rule-of-law concerns more effectively.

A prerequisite would be additional personnel resources for COMCO, including dedicated case officers who could independently review and prepare cases once the Secretariat has submitted its proposal, while ensuring equal treatment of both the Secretariat and the parties. Familiarisation with a case would generally be possible within a few months. At the same time, the Secretariat’s workload would be reduced. The additional costs would be limited, whereas the gains in procedural fairness, legitimacy, and credibility would be significant.

There are also compelling reasons to pursue a more fundamental reform and establish either a judicial model or a unified authority model with a separate competition court, similar to the Swiss Federal Patent Court. The Federal Council’s explanatory report characterises such a model as an «internationally outdated approach», a description that is difficult to understand. Comparable systems exist in Austria and Malta, as well as in Canada, Australia, New Zealand and – deliberately chosen in light of the case law of the European Court of Human Rights – in Hong Kong.

The German model likewise demonstrates that rule-of-law concerns can be effectively addressed through judicial review. Under that system, the Federal Cartel Office acts as prosecutor in sanction proceedings, while the specialised Competition Senate of the Higher Regional Court of Düsseldorf serves as the first judicial instance and adjudicates cases according to principles comparable to criminal procedure.

The Federal Council’s description of these models is inaccurate and raises questions regarding both the quality of the analysis and the openness of the legislative process to alternative institutional solutions.

Given the quasi-criminal nature of direct sanctions under the Cartel Act, there are strong arguments in favour of first-instance adjudication by an independent court. At present, affected parties are effectively compelled to appeal to the Federal Administrative Court in order to obtain the minimum guarantees required under the European Convention on Human Rights. This situation is highly problematic from a rule-of-law perspective, particularly for small and medium-sized enterprises, for whom the costs of an appeal may be prohibitive.

It is therefore to be hoped that Parliament will reject the current proposal and instead adjust the reform in a way that genuinely addresses the underlying institutional deficiencies.