In the latest twist in the long-running saga about Swatch Group reducing its supply of movements and assortments to third parties, the Swiss Competition Commission (COMCO) has rejected the gentlemen’s agreement between its own secretariat and the Swatch Group, which had foreseen a scaling back of movement and assortment deliveries by the Swatch Group.

Nevertheless, COMCO agrees in principle that the Swatch Group should be allowed to scale back, in a gradual way and under certain conditions, its deliveries of mechanical movements. However, COMCO believes that it is too early to consider a reduction in deliveries of assortments.

COMCO has sent the agreement, which was signed in spring 2013, back to its secretariat for renegotiation.

While COMCO agrees in principle that Swatch Group should be able to scale back movement deliveries in a gradual way, ETA SA should, in principle, treat all its customers in the same way. COMCO imposed provisional measures that require the Swatch Group to guarantee 85 per cent of 2010 deliveries to its customers in 2012 and 2013 and that these could be reduced by 10 per cent again in 2014 (to 75 per cent of the reference quantity). Any new agreement between the secretariat and the Swatch Group must be resubmitted to COMCO for approval.

COMCO believes that it is too early to allow a reduction in deliveries of assortments, which are essential components in a mechanical movement, given the current market situation and uncertainties about its development. It prefers to wait to see how the market develops over the next few years before agreeing to a reduction in assortment deliveries. The provisional measures that are still in force (delivery of 95 per cent of the reference quantity) will continue to apply until the end of 2013.

Content adapted from the official COMCO press release, which is only available in French, German and Italian.