The Swatch Group has reportedly sought approval from the Swiss government to reduce its role as a supplier of watch components to rivals so it can focus on selling finished watches, which have much higher margins.
The Swiss Cartel Act prevents the Swatch Group–which owns Omega, Tissot, Hamilton, and Swatch, among many others–from unilaterally phasing out its role as a component supplier to rival Swiss watchmakers. The Swatch Group also owns ETA, which dominates the watch movement space with a 70-80 percent market share.
Swatch Group CEO told the Wall Street Journal that the policy of suppling competitors with component parts is "insane" and "[i]t's like BMW being asked to deliver an engine to all its competitors."
A decision from the Competition Commission is unlikely to occur before the second half of 2012.