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29 Contingent liabilities and contingent assets

Regulatory and competition-law proceedings

­In accordance with the revised Telecommunications Act, Swisscom provides interconnection services and other access services to other telecommunication service providers in Switzerland. In previous years, several telecommunication service providers demanded from the Federal Communications Commission (ComCom) a reduction in the prices charged to them by Swisscom. In addition, the Federal Competition Commission (Weko) is conducting various proceedings against Swisscom. In accordance with the Federal Anti-Trust Law, Weko may impose penalties against Swisscom in the event that the competition law has been violated. The amount of the penalty is dependent on the duration and severity as well as the nature of the violation. It may be as much as 10% of the revenues which have been generated by the company in question in the last three business years on the relevant markets in Switzerland. In the event of a legally enforceable finding as to market abuse, claims under civil law may be asserted against Swisscom.

In April 2013, Weko initiated an investigation against Swisscom in the area of live-sport transmissions on pay TV. On 23 July 2015, the Secretariat of Weko delivered to Swisscom a proposed ruling. It proposes therein to the Federal Competition Commission to impose a penalty against Swisscom of CHF 143 million for unlawful behaviour in the marketing of sport contents over pay TV. In the opinion of the Weko Secretariat, Swisscom and Teleclub have a market-dominant position in particular in the provision of national football and ice hockey transmissions and must therefore offer all TV platforms in Switzerland – insofar as technically possible – an equivalent Teleclub sports portfolio on non-discriminatory conditions. Swisscom rejects the accusations and is of the opinion that it has conducted itself in a lawful manner in the marketing of sports contents. From a current perspective, Swisscom considers the levying of sanctions in the court of last appeal as not probable and thus has established no provision in the consolidated financial statements as of and for the year ended 31 December 2015.

On 19 November 2015, in its investigation as to the invitation to tender for the corporate network of the Swiss Post in 2008, Weko came to the conclusion that Swisscom has a market-dominant position on the market for broadband access for large corporate clients. In this tender, Swisscom is accused of having set the wholesale prices charged to competitors at such a high level that the latter could not compete with the end-customer offer made by Swisscom. As a result of this unlawful conduct, Weko ruled a direct penalty of CHF 8 million. Swisscom has challenged the ruling in the Federal Administrative Court. From a current perspective, Swisscom considers the levying of sanctions in the court of last appeal as not probable and thus has established no provision in the consolidated financial statements as of and for the year ended 31 December 2015.

Contingent assets from litigation

The Italian competition authorities (AGCOM) condemned Telecom Italia for unlawful conduct as a market-dominant company and imposed a penalty of EUR 104 million. Related to the same matter, Fastweb has claimed damages from Telecom Italia and initiated legal action in connection therewith. In the fourth quarter of 2015, Fastweb and Telecom Italia concluded an out-of-court settlement. The latter also encompasses additional contested receivables of both parties from each other. In the fourth quarter of 2015, Telecom Italia made a payment of EUR 15 million. As at 31 December 2015, there resulted from the settlement for Fastweb an uncertain receivable to which conditions are attached. Disclosure of the amount of the receivable is waived for contractual and procedural reasons.