Published 25 May 2025
The Swiss Federal Court has confirmed the Competition Commission’s longstanding position refusing to recognize compliance programs as mitigating factors in reducing fines (case 2C_442/2023, April 14, 2025). The court clearly held that compliance programs never have an exculpatory effect. However, the ruling clarifies the conditions under which compliance programs might reduce fines – requiring robust monitoring mechanisms, not just training materials.
Background
The ruling concludes a 20-year procedure over resale price recommendations in Switzerland’s erectile dysfunction drug market. The case involved manufacturers of Viagra, Cialis, and Levitra who provided non-binding price recommendations directly to pharmacy cash registers. These recommendations were followed extensively by retailers. As explained at length in Section 4.3.1.2 of Competition Law in Switzerland, this high follow-up rate at the retail level alone qualified the conduct as resale price maintenance, even though suppliers applied no pressure or sanctions.
The case establishes a complex framework for assessing price recommendations under the Swiss Cartel Act that differs significantly from EU competition law’s more pragmatic approach. Companies had not anticipated this trend when designing their compliance programs.
The Court’s Stance on Compliance Programs: Familiar Principles Restated
The judges examined the compliance program and restated principles that experienced compliance officers have long understood. For seasoned practitioners, the court’s analysis served more as judicial confirmation than revelation.
“Training and training materials alone are insufficient,” the court stated, echoing what compliance professionals have long advocated in their shift toward more operational, outcomes-focused approaches. The court explained that effective compliance programs must demonstrate that any violation occurred “against the express will of the company” – meaning all documentation such as training materials, instructions, and policies in compliance programs must clearly state prohibited conduct, not simply invite staff to refer to the legal department.
The judges outlined what many in the compliance field already recognize as the standard: effective compliance programs must go beyond instructions, circulated regulations, and training to include effective monitoring, control, and enforcement mechanisms. For those at the forefront of compliance program development, this judicial endorsement validated approaches they had been championing across their organizations, approaches now reflected in standards such as ISO 37301:2021 compliance management systems. Compliance with competition rules is an indispensable part that boards and management should integrate into their supervision and leadership actions, principles that I have highlighted in a previous article From Governance to Stewardship: The Impact of Board Leadership on Antitrust Compliance and Sustainability Goals, CPI Antitrust Chronicle, September 2023.
The Compliance Officer’s Dilemma
Yet even as the court established clear principles on compliance, the complex reality competition in-house counsels face daily becomes apparent. While the case provides clear guidance, from a practical compliance perspective, it raises difficulties when companies must assess behavior in gray areas – conduct like price recommendations that requires careful legal assessment and isn’t always clearly unlawful.
The intricacies of the case are discussed at length in Chapter 4.3.1.2 of my book Competition Law in Switzerland, where I presented the complex assessment of price recommendations as a concerted practice between each supplier and thousands of pharmacies and physicians. Even today, the complexity of the court’s assessment is difficult to translate into clear rules and operational compliance programs.
This creates a tension every compliance professional recognizes: how do you build compliance systems robust enough to meet the court’s demanding standards while operating where legal boundaries aren’t crystal clear?
Key Takeaways for Practitioners, In-House Counsel, and Compliance Officers
The Swiss Federal Supreme Court approach can be summarized as follows:
First, compliance programs do not immunize companies from fines, regardless of their robustness. A competition infringement occurred because those efforts failed.
Second, compliance efforts may reduce fines, provided compliance programs clearly communicate prohibited behavior and include operational and enforcement mechanisms to implement company policies. The focus must therefore shift from formal frameworks to demonstrable operational compliance programs, with clear escalation procedures for potential issues, enforcement mechanisms and regular effectiveness assessments.
Last, the new compliance imperative isn’t only about what companies intend to do – it’s about what they can prove they actually do to prevent violations before they occur.