The Competition Commission will soon decide on the billboard dispute in the central Swiss metropolisBy Markus Knöpfli The city of Lucerne wants to continue awarding the billboard concession to Allgemeine Plakatgesellschaft. This is why competitor Clear Channel Plakanda has filed a complaint against the city with the Competition Commission. Their recommendation is as good as certain: submission. However, the Federal Court does not consider this to be mandatory.
For over 90 years, the Allgemeine Plakatgesellschaft (APG) has exclusively managed the poster sites on public land in the city of Lucerne. Every year, it pays around 600,000 Swiss francs in fees, depending on turnover. Lucerne has now terminated the contract between the city and APG at the end of 2001 in order to put it on a new financial and conceptual footing. It has therefore conducted initial contract negotiations with APG regarding a new concession.
However, the second out-of-home advertiser, Clear Channel Plakanda (CCP), opposed the continuation of the previous cooperation, proposing a consortium agreement (agreement with both competitors for a shared concession). The Lucerne executive did not want this because a consortium agreement would require providers with a similarly large share of poster sites - and this was not even the case on private land in Lucerne.
Conversely, the city of Lucerne is also seeking cooperation with CCP, as it wants to put a stop to the proliferation of billboards on private land and introduce a billboard concept developed with APG. The City of Lucerne's Building Department, which is in charge of this matter, has therefore made CCP the following offer: APG will receive the Lucerne concession, but the poster sites on private land will be divided between APG and CCP. In return, both out-of-home advertisers will submit to the new billposting concept and each will also reduce a number of sites.
Submissions are not mandatory according to the Federal Supreme Court
However, this was not enough for the CCP. The negotiations dragged on. In order to prevent a situation without a contract, the city and APG had to extend their previous contract by one year until the end of 2002. On March 27, the CCP then sued the city of Lucerne at the Competition Commission (Weko), which is why the negotiations were even put on ice. Neither CCP CEO Beat Roeschlin nor Daniel Bernet, an employee of the legal service of the city's building department, wanted to comment on the content of the complaint. The Weko decision is expected in the next few days.
But the decision is as good as certain: the Competition Commission is likely to recommend a submission. At least this is what emerges from a decision of May 14, 2001 (in the JCDecaux/Affichage case). At that time, the Competition Commission criticized, almost in passing and on the basis of its own survey, "that larger municipalities sometimes restrict competition for billboard advertising space". It also stated: "These municipalities either refrain from inviting tenders or conclude so-called consortium agreements that integrate all potential providers into an overall concept. This weakens competition."
These are clear words in themselves. The big unknown, however, is whether the ComCo can also make a legally binding decision - i.e. do more than just "recommend". After all, its view is contradicted by a Federal Supreme Court ruling from April 1999. At that time, Switzerland's highest court ruled that a submission was not mandatory in the billposting sector.
Concession decision in Basel
After years of delay, a jury appointed by the Basel Building Department decided on July 9 who will receive the new Basel billboard concession. However, the decision still has to be formally approved by the Director of Buildings. APG and CCP have applied, and APG is the current concession holder. However, the new concession is severely restricted: 254 City Light areas in prime locations and other locations on streetcar shelters are excluded. They were previously transferred to APG for 15 years.