PostCom must investigate the private-sector activities of Swiss Post

The Federal Administrative Court ruled in favor of Abacus Research and Goldbach Neo OOH in four judgments published on Friday. In doing so, it clarified fundamental legal issues in connection with the private sector activities of Swiss Post.

In its rulings, the Federal Administrative Court refers to the case law of the Federal Supreme Court on the private economic activity of the state. It states that the economic freedom protected by fundamental rights does not offer private individuals any general protection against competition. This also applies to the private economic activity of the state. In principle, this merely creates another competitor for the private sector.

However, there are constitutional limits to the private sector activity of the state, as the court goes on to explain. The activity must be based on a legal basis, it must be in the public interest and it must be proportionate and competitively neutral.

Limited activity

In accordance with these requirements, the activities of Swiss Post are regulated and limited by the Postal Organization Act. Swiss Post must ensure the universal service and may provide related services.

Against this background, the Federal Administrative Court has further developed its previous case law. It maintains that, in principle, no party status can be obtained by means of a notification under supervisory law.

If, as in the present case, private companies justifiably claim that a state-owned company does not have a sufficient legal basis for a certain private sector activity or does not act in a competitively neutral manner, there is a particular proximity to the relationship. The party status of private companies cannot be denied in principle in such a case.

PostCom, to which the court referred the case, is responsible for examining whether Swiss Post complies with the constitutional limits for its private-sector activities.

It must make a final decision on the status of the complainants as parties and then, if necessary, examine whether Swiss Post has sufficient market access authorization for its private-sector activities.

Measures required

Swiss Post acquired Klara Business AG, now ePost Services AG, in October 2020. It was a private company that develops and distributes software for accounting and customer and order management.

Livesystems, which operates in the field of digital out-of-home advertising, was acquired in July 2021. Both companies are now managed as independent Swiss Post Group companies.

With its two Group companies ePost Services and Livesystems, Swiss Post operates outside the universal service. It is therefore in direct competition with Abacus Research and Goldbach Neo OOH, which offer the same or similar services.

These companies lodged separate supervisory complaints with the Federal Postal Commission (PostCom) and the Federal Office of Communications (OFCOM). They argued before both authorities that Swiss Post's private-sector activities were not permitted. For this reason, the takeover of the two companies should be reversed or measures should be taken to avoid distortions of competition.

PostCom and OFCOM did not intervene in the two supervisory complaints. They stated that the two companies had no party status with regard to Swiss Post's private-sector activities. The two competitors lodged an appeal against these decisions with the Federal Administrative Court.

These rulings are not yet legally binding and can be appealed to the Federal Supreme Court. (SDA)