Figure 15: Swatch’s decision to limit movements and components supplies to competitors has prompted material capacity investment by ETA peers and brands as well

Swatch timeline on phasing-out deliveries of watch movements

Source: FT, Reuters, “When corporatism leads to corporate governance failure: the case of Swiss watch industry” (IsabelleSchluep Campo and Philipp Aerni), “How firms profit from acting in networked environments” (Charlotte Steffen)

Jul-02	ETA declares it would reduce delivery of unfinished movements (ebauches) to companies outside the Swatch Group as of January 2003 and cease deliveries in 2006, focusing on assembled movements only.
	Two watchmakers file complaint against ETA with WEKO/COMCO (Swiss Competition Commission), which starts an investigation.
Nov-04	WEKO and Swatch Group reach a mutual agreement, where ETA would supply customers with ebauches for mechanical watches until the end of 2010, gradually reducing delivery volumes.
	From the investigation, ETA resulted as the only supplier of mechanical movement blanks for prices below CHF300 and that 75% of Swiss mechanical movements contain movement blanks from ETA.
	Considering a market share for movement blanks of 95% at that time, WEKO concluded that a phase out time of three years was too short for the Swiss watch companies that relied on movement blanks from ETA.
2009	WEKO once again looked at ETA’s dominant market position and whether it discriminated against independent watch companies compared with intra-group companies.
	The investigation was interrupted in 2011, when WEKO started to inspect Swatch Group as a whole.
2011	New investigation on Swatch Group by WEKO, investigating on the company’s dominant positioning.
2013	WEKO announced that it did not find sufficient evidence for discriminatory behaviour by ETA and therefore decided to let ETA’s supply obligation for mechanical movements expire at the end of 2019.
	Over the next two years, Swatch is expected to deliver just 75% of parts to rival companies from average levels between 2009 and 2011. The supply of parts will then be dropped further to 65% in the years 2016 and 2017 and to 55% in 2018 and 2019. Swatch will not be allowed to pick and choose which customers it supplies, but must treat all equally.
Jul-14	WEKO also closed its investigations into ETA’s pricing policy for mechanical movements that had been in place since 2009.
Oct-16	In early FY2016, Swatch started negotiations with COMCO/WEKO (Swiss Competition Commission) to understand if it could supply more mechanical movements to its customers than was set out in the 2013 agreement on phasing out deliveries. However, in October the Commission left the 2013 agreement unchanged.