Switzerland's anti-trust commission COMCO said Wednesday it had opened a probe into Swatch for suspected abuse of its dominant position, after the group decided to stop supplying components to other watch-makers.
The investigation, initiated on Monday together with Swatch, is to "determine if the behaviour constitutes an abuse of position on the point of view of competition," COMCO said in a statement.
Swatch, a key supplier of watch components to other watch-makers in Switzerland, had announced earlier that it wished to stop selling these parts to other watch-makers.
COMCO has therefore opened the probe to ensure that this move, which is expected to hurt small watch-makers that do not manufacture their own movements, does not violate anti-trust rules.
For now, Swiss authorities have ordered Swatch to continue supplying to its clients. In 2012, it can cut its deliveries of mechanical movements to 85 percent of the quantity sold in 2010, and to 95 percent for other components.
Swatch said that the probe would help it to "determine what kind of an amicable solution could be found so that Swatch can reduce in steps its deliveries of mechanical movements and parts to third-party clients."
The watch-maker's shares opened down 0.62 percent at 400.70 Swiss francs, underperforming the overall Swiss Market Index, which fell 0.32 percent.
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