• Switzerland's news in English

Competition watchdog cuts Swatch's obligations

AFP · 25 Oct 2013, 15:07

Published: 25 Oct 2013 15:07 GMT+02:00

Facebook Twitter Google+ reddit

Swiss regulator Comco said it had approved a landmark deal with Swatch Group allowing the watchmaking giant to sell fewer mechanical movements to the rest of the sector.
The decision ends years of wrangling over the world number one watchmaker's obligations on the market.
"The accord will allow Swatch Group to reduce step-by-step its deliveries of mechanical movements," Comco said, underlining that it would have to treat all its clients equally.
Best known for its multicoloured plastic watches, Swatch is also the sector's top producer of components via its division ETA SA Manufacture Horlogere Suisse.
Mechanical movements are what measure time in a watch, making them the very heart of the industry.
Given Swatch's dominant market position, it is obliged to supply components across the sector.
Swatch has been battling that obligation for a decade, arguing that it was being forced to bear the burden of investment for the Swiss watch industry.
In 2001, Comco opened a competition probe at Swatch's request.
In July this year, Comco rejected an initial deal negotiated with Swatch, but fresh talks yielded an accord this week.
Under its terms, Swatch will in 2014 and 2015 be able to deliver 75 percent of the average number of mechanical movements sold to competitors between 2009 and 2011.
In 2016 and 2017, the proportion will fall to 65 percent, and then to 55 percent in 2018 and 2019.
From December 31, 2019, Swatch will no longer have to sell mechanical movements to other companies.
Comco underlined that it reserved the right to reexamine the deal in the event that the market evolved in ways that had not been predicted.
In addition, it said, the rules would not apply small and medium-sized watch companies that found themselves in difficulty as a result.
Since Comco launched its probe in 2011, a string of leading watchmakers have stepped up their production investment, notably by taking over supplier companies.
But the reduction in deliveries could also drive a shake-up in the sector, potentially leading to concentration of business in fewer hands, given the limited ability of smaller brands to invest in production.
The Comco agreement with Swatch does not allow the group to rein in the supply of what are known in the sector as "assortments", including such small parts as springs.
Comco did not oppose reduced deliveries of assortments on principle.
It said further investigation was needed, as it appeared premature to cut them given the lack of alternative suppliers to Swatch, which has a near-monopoly in that part of the trade.

Facebook Twitter Google+ reddit

Your comments about this article

Today's headlines
‘Scary clown’ craze hits streets of Zurich
Photo: Pedro Pardo/AFP

Police in Zurich have warned so-called ‘scary clowns’ that they could face charges, following a number of incidents in the city.

VIDEO: driver chases runaway car on Swiss motorway
Image: Neuchâtel police

Shocking footage shows the moment a man dodged lorries to chase after his runaway car on a Swiss motorway.

Saas-Fee crowdfunds low-cost season ski pass
Saas-Fee is hoping to attract 99,999 season pass holders. Photo: Denis Emery/Photo-genic.ch

Skiers could get their hands on a whole season pass for just 222 francs ($223) in the Swiss resort of Saas Fee this winter – if enough people want one.

Swiss billionaire fined for dodging import tax
Urs Schwarzenbach owns the luxury Dolder Grand hotel in Zurich. Photo: Wilhem Rosenkranz

Urs Schwarzenbach faces a $4 million fine for failing to properly declare some 200 artworks imported into Switzerland.

Muslim woman wins headscarf court battle
Photo: Jack Guez / AFP

A Swiss court has ruled against a company that fired a longtime employee after she began wearing the Muslim headscarf.

Montreux throws hat in Olympic rings
Could Montreux host the 2026 Games? Photo: Ivo Scholz/Swiss Tourism

Montreux is to put itself forward as the host city for the 2026 winter Olympics as part of a potential bid by the cantons of Valais and Vaud.

Geneva car share scheme could help reduce city traffic
Catch a Car is aimed at short hops within a city. Photo: Catch a Car

Catch a Car, already in Basel, launches in Geneva next month.

Swiss women will ‘work for free’ for the rest of year
Female employees in Switzerland earn 19.3 percent less than their male colleagues. File photo: Randy Kashka

Switzerland's gender pay gap means from today, Friday October 21st, women in the country will effectively be working for free for the rest of 2016.

Swiss luxury watches stolen in Paris raid
Police outside the Girard-Perregaux watch store on Thursday. Photo: Bertrand Guay/AFP

The 10 Girard-Perregaux watches are worth half a million euros in total.

Brother-in-law arrested over murder of Swiss teacher
The victim worked in a school in Stabio, near the town of Mendrisio. Photo: Oliver Graf

The primary school teacher was found dead in Ticino earlier this week.

Photo: Richard Juilliard/AFP
Man makes Geneva airport bomb threat ‘for a joke’
Sponsored Article
Last chance to vote absentee in the US elections
Photo: AFP
Solar Impulse team reveals plans for unmanned plane
File photo: Martin Abegglen
Swiss to vote on passport rules for 3rd gen foreigners
Photo: AFP
Swiss wingsuit hotspot Lauterbrunnen won’t impose ban
Photo: Swiss Tourism
Six reasons Switzerland isn’t as boring as you might think
Photo: Swiss Tourism
Report: Switzerland one of world’s best places for girls
Photo: The Local
Thief returns Swiss cow bells worth thousands
File photo: Wikimedia Commons
One in three rapists isn’t locked up: statistics
Photo: activistin.ch
Tampon-tax protest turns Zurich fountains red
Photo: AFP
Geneva police to lift ban on bearded officers
Photo: Marcel Gillieron/AFP
Suicide chef’s restaurant keeps Michelin stars
Photo: Lara de Salis
11 things the Swiss get tired of hearing abroad
Photo:  Ivo Scholz/Swiss-image.ch
Survey: expats in Switzerland have money but few friends
Photo: AFP
Swiss press criticize Bern’s 'capitulation' on immigration
Photo: Jura Trois Lacs tourism
German ex-policeman is Swiss city’s new hermit
Photo: Dmitry A. Mottl
Ticino votes to favour local workers over foreigners
Photo: file
Some deodorants could cause breast cancer: Swiss study
Photo: Royal Savoy
In pictures: Inside the latest Swiss luxury hotel
Photo: AFP
Geneva airport bomb hoaxer faces 90,000-franc bill
Photo: Schaffhausen police
Mother leaves toddler son alone in car to go clubbing
Photo: Fabrice Coffrini/AFP
Swiss populist attacked by knife-wielding pensioner
jobs available