The provisions on merger control were revised in the 2011 reform of the Competition Act with the purpose of bringing them further into line with EU rules. Most notably, the dominance test applied under the old rules was replaced by the significant impediment of effective competition test, which was introduced to enable the FCCA to shift the focus of its review more towards the competitive effects of mergers. A new amendment process began in 2015, as a result of which the calculation of deadlines in merger control changed and merger control timelines are now calculated in working days instead of months. The amendments entered into force on 17 June 2019.
Under the merger control provisions, a concentration shall be notified to the FCCA if the combined aggregate worldwide turnover of the parties exceeds €350 million; and the aggregate turnover of each of at least two of the parties accrued from Finland exceeds €20 million.
The rules concerning the calculation of the turnover correspond to a large extent with the provisions of the EU Merger Regulation.
Once a concentration has been notified to the FCCA, it has 23 working days to investigate and either clear the concentration (possibly with conditions) or initiate a Phase II investigation. If a Phase II investigation is opened, the FCCA has an additional 69 working days (the Market Court may extend the deadline by a maximum of 46 working days) to approve the concentration with or without conditions, or to request the Market Court to prohibit it. If the FCCA requests such a prohibition, the Market Court must decide either to clear the concentration with or without conditions, or to prohibit it within three months.
The majority of notified concentrations are cleared in Phase I. In 2021, the FCCA issued 34 merger decisions and Phase II investigations were initiated in two cases.i Significant casesConditional FCCA approval for Altia Oyj / Arcus ASA merger
The FCCA approved conditionally the merger between alcoholic beverage companies Altia and Arcus, both active in the Nordic market for the manufacture, import and distribution of spirits and wines. The parties to the transaction had overlapping activities in several alcoholic beverage categories and the FCCA identified significant adverse effects on competition in the sales of aquavit and berry liqueurs to the national retail monopoly, Alko, and in the sale of aquavit to HoReCa customers, since the markets would have been highly concentrated post-merger.
The parties eliminated the competition concerns by proposing commitments to the FCCA, according to which Altia undertook to sell a certain aquavit brand and Arcus committed to terminate a distribution agreement for a certain liqueur brand. The commitment to divest the aquavit brand was enhanced with an upfront buyer requirement – the first time in the history of Finnish merger control an upfront-buyer provision has been required.Conditional FCCA approval for acquisition of Fidelix Holding Oy by Assemblin AB (Triton)
The FCCA approved conditionally the acquisition of Fidelix Holding Oy by Assemblin AB in July 2021. Assemblin is an installation and service operator providing expert services related to electrical, heating, sanitation, ventilation and automation work in the Nordics, whereas Fidelix offers systems and services related to building automation and building technology maintenance services in Finland and Sweden. The FCCA found after lengthy in-depth investigations that the acquisition, if approved unconditionally, would significantly impede effective competition in the tendering process for construction automation in certain regions since the parties' combined market share would be remarkably high.
Assemblin proposed remedies that sufficiently met the competition concerns raised by the FCCA. These consisted of the company's commitment to divest certain operations coupled with its commitment to take care, with its best efforts, that the acquirer of divested operations could also agree on a certain system partner contract. To this end, Assemblin committed also to divest certain related and necessary assets to the buyer. In this case also, the remedies included an upfront-buyer requirement as a condition for the approval.Conditional FCCA approval for acquisition of Heinon Tukku Oy by Valio Oy
In June 2021, the FCCA approved, subject to conditions, the acquisition in which Valio Oy purchased Heinon Tukku Oy, both operating mainly in different levels of distribution chains on food markets. Valio is a company that mainly processes and markets dairy products but also provides services to food-service and industrial customers. Heinon Tukku, in turn, is a wholesaler of groceries whose main customers are food-service customers. Despite their overlapping business operations in public sector food-service procurement and in the dairy, industrial produce and frozen food supply markets, the FCCA did not find any competition concerns in these markets.
However, the authority concluded that Valio would be at risk of receiving information on the wholesale pricing of competing manufacturers and other terms and conditions used in contractual relationships through Heinon Tukku. To address these concerns, Valio committed to refrain, for the next 10 years, from disclosing confidential information it receives about its competitors to its organisation in a way that has adverse effects on competition.ii Trends, developments and strategies
The FCCA has itself noted the need to investigate reform of Finnish merger control provisions, including assessing whether current turnover thresholds are still appropriate.25 Accordingly, the FCCA published a report in June 2021 in which it proposes expanding the obligation to notify mergers. In the report, the FCCA proposes that the current merger control turnover thresholds be lowered and that the authority be granted the right to require notification even when the thresholds are not met. According to the report, should the proposed right not be granted to the authority, the turnover thresholds should be lowered even further than proposed. In addition, filing thresholds based on transaction value should be considered. The Finnish Ministry of Economic Affairs and Employment is currently assessing the need to change the current merger control turnover thresholds. An assessment memorandum on the possible changes was put out for consultation in February 2022.iii Outlook
There has been a significant change in the length of merger control review periods. Among other things, in 2017 and 2018, the FCCA requested the Market Court to extend the deadline for Phase II investigations in four cases. This practice had previously been highly exceptional. In 2019 and 2020, an extension to the deadline was requested in two cases in each year. Moreover, in both cases in 2020, the extension was requested twice. In 2021, an extension was requested twice in one case.
Developments are expected to be possible in Finnish merger control in the near future since the Finnish Ministry of Economic Affairs and Employment is currently assessing the changes proposed by the FCCA on merger control thresholds. However, as yet no timetable for the possible changes is known. The FCCA anticipates that there are likely to be problematic transactions with serious effects on competition.26