Here is our selection of key facts, findings, and thoughts:

Background and Facts

On 23 January 2025, the Swiss Federal Supreme Court (the Court) issued a significant judgment in the HCI Solutions case (2C_244/2022), substantially modifying the prior Federal Administrative Court (FAC) judgment from 19 January 2022 and essentially revising the Court's own case law developed in the previous DCC judgment (2C_596/2019).

The case involves HCI Solutions AG (HCI), a subsidiary of Vifor Pharma Participations AG. HCI operates in the Swiss healthcare sector by providing medication information through the "Compendium" (containing professional and patient information on medications) and various user-specific "INDEX databases" designed for different healthcare stakeholders (physicians, hospitals, pharmacies, etc.). The Swiss Competition Commission (Wettbewerbskommission, WEKO) and later the FAC found that HCI abused its dominant market position through restrictive contractual clauses with software providers and pharmaceutical companies. WEKO initially imposed a fine of CHF 4.5 million which was later reduced to CHF 3.78 million by the FAC.

Key Findings

1. Market Definition and Dominance

The Court confirms the existence of a Switzerland-wide market (i.) for curated machine-readable data regarding pharmaceutical information and (ii.) for storing and maintaining pharmaceutical information in electronic databases. The Court upholds the finding that HCI has a dominant position in these markets, with market shares consistently exceeding 90% and significant barriers to market entry for potential competitors.

2. No Per Se Illegality of Behaviors Listed in Art. 7(2) of the Cartel Act

The Court, consistent with previous case law, emphasizes that behaviors of a dominant undertaking which match one or more of the (non-exhaustive) practices codified in Art. 7(2) of the Swiss Cartel Act (CartA) are not per se abusive. Rather, for a conduct of a dominant undertaking to be deemed abusive, it needs to be shown that such conduct can lead to a distortion of competition within the meaning of Art. 7(1) CartA. In addition, the behavior must not be justifiable by legitimate business reasons. As the Court has put it in its landmark Publigroupe judgment, "abusive means anti-competitive" (BGE 139 I 72, consid. 8.2.3, Publigroupe).

3. Parallelism Between Swiss and EU Competition Law

The Court explicitly refers to the jurisprudence of the European Court of Justice (ECJ) and clarifies that the case law and legal doctrine on Art. 102 TFEU can be used as a basis for the interpretation of Art. 7 CartA, as both provisions have largely the same meaning. This reaffirms the principle of parallelism between Swiss and EU competition law referenced in previous judgments (for abuse of dominance cases in BGE 146 II 217, consid. 4.3 and 6, Swisscom ADSL; BGE 139 I 72, consid. 8.2.3, Publigroupe; for anti-competitive agreements in BGE 143 II 297, consid. 6.2.3, Gaba).

4. General Requirement of an Effects-Based Approach

Crucially, the Court follows through on the premise of this parallelism between Swiss and EU competition law and, based on the ECJ's established case law (namely the judgment of 12 May 2022, Servizio Elettrico Nazionale and Others, Case C-377/20, EU:C:2022:379, paras. 69 et seqq.; judgment of 19 January 2023, Unilever Italia Mkt. Operations Srl v Autorità Garante della Concorrenza e del Mercato, Case C-680/20, EU:C:2023:33, paras. 34-62; judgment of 6 September 2017, Intel v Commission, Case C-413/14 P, EU:C:2017:63, paras. 138-140), harmonizes the interpretation of Art. 7 CartA with Art. 102 TFEU by stating that an effects-based approach must be followed when evaluating potentially anti-competitive behavior of a dominant undertaking under Art. 7 CartA.

The validity of an effects-based approach under Swiss abuse of dominance provisions was left significantly unclear after the Court's aforementioned DCC judgment. The wording of the DCC judgment appeared to indicate that, for a finding of illegality, (potential) effects of a dominant undertaking's behavior do not need to be considered ("an effects-related analysis is not required"), as long as the behavior matches one or more of the (non-exhaustive) practices codified Art. 7(2) CartA. This essentially moved the competitive assessment under Art. 7 CartA away from an effects-based approach and towards a form-based or per se approach (Federal Supreme Court, judgment 2C_596/2019 of 2 November 2022, consid. 8.6, DCC).

In HCI Solutions, the Court removes the uncertainty created by the DCC judgment. It states unequivocally that, while it need not be shown that a dominant undertaking's behavior has effectively (in the sense of successfully) excluded competitors from the market or to which extent it has a negative impact on competition, it is also not sufficient that a certain behavior could merely hypothetically do so. It is also not sufficient that a behavior takes the formal shape of one of the practices codified in Art. 7(2) CartA. The Court held that such a form-based or per se approach cannot be followed. Instead, in line with the effects-based approach, the behavior of a dominant undertaking needs to be actually capable – or in the slightly ambivalent language of the Court "effectively potentially capable" – to harm competition by foreclosing competitors. Such foreclosure must be "plausible" based on a holistic assessment considering the specific circumstances of the individual case. Accordingly, the competition authorities must look at all the available evidence that proves or disproves that competition could have been distorted.

5. Application of the Effects-Based Approach to an Exclusive Purchasing Obligation

Following these theoretical considerations, the Court examines two contractual clauses that HCI implemented in licensing agreements with software providers.

The first of these clauses (referenced by the Court as Clause A) concerned an exclusive purchasing obligation that HCI implemented in only one of its 176 licensing agreements. The Court finds that under the concrete circumstances of the case, the exclusive purchasing obligation in a single agreement – representing merely 0.57% of HCI's agreements with software providers – is not actually capable of creating a foreclosure effect. HCI's competitors can still compete for the business of 175 software providers whose licensing agreements with HCI do not contain an exclusive purchasing obligation. Therefore, the potential for a distortion of competition is only hypothetical. This is not sufficient for a finding of anti-competitiveness. A holistic view of the circumstances does not change this result according to the Court. Entry barriers are not sufficiently high that the exclusive purchasing obligation, affecting only 0.57% of HCI's licensing agreements, can realistically foreclose competitors' access to the market. Therefore, the influence of this Clause A on the structure of the market was considered to be negligible. The Court also emphasizes that the software provider whose licensing agreement with HCI contained the exclusive purchasing obligation stated that the respective clause has never become relevant.

6. Application of the Effects-Based Approach to a Restriction Regarding the Use of Third-Party Data

The Court then examines a second clause (referenced by the Court as Clause B), which was used in 83 out of the 176 licensing agreements between HCI and the software providers. The clause restricted the respective software providers from incorporating third-party (i.e., non-HCI) data into HCI's XML structure, or from importing non-HCI data, which are structured in the same or in essentially the same way as HCI-data, into their software programs. This clause was assessed by the Court from two different angles.

6.1 Intellectual Property Protection vs. Competition Law

The Court finds that large parts of Clause B fall outside the scope of the Cartel Act pursuant to Art. 3(2) CartA, which exempts competition effects resulting exclusively from intellectual property legislation. Citing Art. 10(1) of the Copyright Act (CopA), which grants authors exclusive control over their works, the Court determines that HCI's XML structure enjoys copyright protection. Consequently, competitors using this structure without permission would infringe HCI's copyright regardless of the existence of Clause B. The Court, therefore, concludes that these competitive effects arise directly from copyright law and not from the contractual clause, and that, therefore, the Cartel Act does not apply. These considerations are remarkable because Art. 3(2) CartA has in the past been considered by some legal scholars to be essentially dead letter, reducing it to a mere reminder that the objectives of intellectual property protection need to be considered when applying the Cartel Act but without the power of excluding its application. Despite these academic views, the Court is clear that Art. 3(2) CartA in conjunction with Art. 10(1) CopA in the specific case at hand precludes the applicability of the Cartel Act because HCI's ability to hinder the use of its XML structure arises directly and exclusively from its copyright. Thus, the Court holds that Clause B lacks competitive effect where it merely reflects rights already protected by HCI's copyright. However, this reasoning may be questioned in future cases in which such clauses could also reinforce the competitive effects of copyright protection rather than merely duplicating them. Moreover, the Court's approach raises methodological questions about whether copyright coverage should automatically exempt such clauses from competition law scrutiny, or whether this potential overlap should instead be analyzed as a causality issue within the assessment of potential effects. However, in this specific case, the practical significance of this distinction appears limited, as both analytical approaches would likely yield similar outcomes. While the Court considers a significant portion of Clause B to be outside the scope of competition law due to intellectual property protection, the Court does not extend this exemption to all aspects of this clause. The Court draws an important distinction between exact copying (Nachmachung), which constitutes an evident copyright infringement, and mere imitation (Nachahmung; see Section 6.2 hereafter) which requires a closer look to determine a copyright infringement and which remains subject to competition law scrutiny. This distinction is crucial for the analysis of clauses prohibiting the use of similar but not identical structures.

6.2 Restriction of Legitimate Imitative Competition

The Court challenged the part of Clause B which prohibits software providers from importing non-HCI data which are structured in essentially the same way as HCI-data (as opposed to exactly the same way) into their software programs. The Court finds that this provision is not covered by Art. 3(2) CartA in conjunction with Art. 10(1) CopA and could prima facie be capable of restricting legitimate imitative competition. In this respect, the Court notes that a distinction must be made between an unlawful exploitation of another's work product and its lawful imitation under Art. 5(c) of the Unfair Competition Act. By hindering the software providers from importing non-HCI data which are structured in essentially the same way as HCI data, the relevant clause also impairs the lawful imitation of HCI's XML structure.

The Court then assesses whether this part of Clause B is actually capable of harming competition by foreclosing competitors in light of the specific circumstances of the case. It finds that Clause B leads to a partial foreclosure of the market for curated machine-readable data regarding pharmaceutical information because it is present in more than half, namely 83 out of 176, of HCI's licensing agreements with software providers. Clause B consequently has the capability of restricting imitative competition and is, therefore, prohibited.

Commentary

While the clarification of the Court's case law regarding the effects-based approach to the assessment of a dominant undertaking's behavior is generally positive, some important questions remain unanswered. For instance, what market percentage must be affected by a behavior for it to be considered to have anti-competitive effects? In other words, where is the (quantitative) threshold for anti-competitive effects? The answer is likely to depend on three factors: the relevant market characteristics, the applicable theory of harm, and the specific circumstances of the individual case. The definition of abstract criteria is not possible and would probably shift the analysis back towards an ultimately unhelpful form-based approach.

Another question is whether the effects-based approach of assessing possible distortions of competition is only applicable to exclusionary abuses directly aimed at foreclosing competitors or also to exploitative abuses such as imposing unfair prices pursuant to Art. 7(2)(c) CartA. The wording of the HCI Solutions judgment seems to suggest that all kinds of abuses, irrespective of whether they are exclusionary or exploitative in nature, need to be actually capable of harming competition based on the concrete circumstances (see, inter alia, Section 4 above). This reading of the judgment is supported by the fact that the Court has consistently said that the distinction between exclusionary and exploitative abuses is only of heuristic value. Rather than relying on that distinction, it is relevant whether the abusiveness of a specific behavior, including its harm to competition, can be established. Furthermore, the Court has repeatedly stated that the Cartel Act serves primarily the protection of effective competition, not the protection of individual undertakings.

With regard to Art. 3(2) CartA and the scope of application of the Cartel Act to intellectual property rights, the judgment has, in a way, reopened the discussion regarding a grid of criteria for determining when competition effects result "exclusively" from intellectual property legislation. This may generate a certain back and forth in future case law, for example in digital and pharmaceutical markets where intellectual property and competition rules often overlap. It remains to be seen whether case law will move to a new equilibrium between upholding intellectual property rights and competition law interventions. Influences from EU competition case law may also come into play on this. In any case, future jurisprudence should develop a more structured analytical framework that acknowledges the complementary roles of both legal regimes while providing greater certainty to market participants. Until then, competition authorities and courts will need to engage in case-by-case assessments of the complex interplay between these areas of law.

Finally, the HCI Solutions judgment may also have implications for the Court's case law on anti-competitive agreements based on its Gaba practice. Under this practice, horizontal and vertical hardcore restrictions pursuant to Art. 5(3) and (4) CartA – namely price fixing, market/customer sharing, quantity restrictions, resale price maintenance, and absolute territorial protection – are by their very nature sufficiently harmful to competition and, therefore, in principle illegal (except in de minimis cases, which remain largely undefined; BGE 143 II 297, consid. 5.1-5.3, Gaba). It will have to be seen whether the shift towards a more effects-based approach for abuses of dominance in the HCI Solutions judgment could have any repercussions on the assessment of hardcore restrictions under Art. 5(3) and (4) CartA. Under EU law, restrictions by object under Art. 101 TFEU would have to take into consideration the content of the provisions, their objectives and the economic and legal context of which they form part (ECJ, judgment of 29 June 2023, Super Bock, Case C‑211/22, EU:C:2023:529, paras. 34-37; European Commission, Revised Horizontal Guidelines, OJ C 259, 21.7.2023, pp. 1-125, para. 23). Future decisions will have to show whether such considerations will also have to be made for hardcore restrictions pursuant to Art. 5(3) and (4) CartA.