The Finnish Competition Act (948/2011) has been amended by a new Section 4 a regarding a dominant position in the grocery retail sector. According to said Section, businesses or groups of businesses holding at least a 30 % market share in the Finnish grocery retail market shall be deemed to hold a dominant position in the market. Normally, as is still the case in Sweden, a dominant position would need to be established on a case-by-case basis, by defining the relevant markets.
In effect, the new provision applies to the Finnish K and S retail chains, which control over 80 % of the market according to the Bill (HE197/2012). Consequently, the two retail chains will automatically be subject to competition authority supervision as dominant players in the market, and will have to refrain from certain business practices that are deemed to be abusive. The Finnish Competition and Consumer Authority (“FCCA”) will be able to take legal action in the event either company is suspected of abusing its dominant position.
According to the abovementioned Bill, the new Section 4 a was included in the Competition Act due to concerns over the oligopolistic nature of the grocery retail market and the considerable bargaining power of grocery retail chains. Due to their position, the grocery retail chains are as buyers potentially able to dominate suppliers, imposing, e.g. unreasonable contractual terms and business practices in the supply chain.
In addition, the FCCA is initiating further investigations into, among other things, customer loyalty schemes and their effects on competition and access by goods suppliers to sales data. The forthcoming surveys of the FCCA will also more closely examine practices relating to private label products.
Section 4 a of the Competition Act entered into force as of 1 January 2014.
