The provisions on merger control were last 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.
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 a period of one month to investigate and either clear the concentration (possibly with conditions) or to initiate a Phase II investigation. If a Phase II investigation is opened, the FCCA has an additional three months (or five months, with the permission of the Market Court) 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 make its decision either to clear the concentration with or without conditions or prohibit it within three months.
The majority of notified concentrations are cleared in Phase I. In 2018, the FCCA issued approximately 39 merger decisions, and Phase II investigations were initiated in only nine cases.i Significant casesFCCA conditional approval in Eurofins/VTT Expert Services/Labtium
In May 2018, the FCCA conditionally approved the acquisition of VTT Expert Services Oy and its subsidiary Labtium Oy by Eurofins Product Testing LUX Holding SARL (Eurofins). Eurofins is part of the Eurofins Scientific Group and offers bioanalytical laboratory and expert services in the food, agricultural and environmental sectors. VTT Expert Services and Labtium offer commercial testing, inspection and certification services in the construction, environmental and industrial sectors.
The FCCA started Phase II investigations in February 2018, arguing that the acquisition could lead to harmful effects on competition particularly in the environmental sector's testing, inspection and certification service market. According to the FCCA, the acquisition brought together the two biggest operators in the market for solid fuel analysis and resulted in a significant combined market share. Nevertheless, the FCCA approved the merger subject to conditions. To eliminate the negative effects of the transaction, Eurofins committed to divesting its operation unit that focuses on solid fuels analytics services.FCCA conditional approval in Colosseum Dental Group/Med Group Hammaslääkärit
In July 2018, the FCCA conditionally approved the acquisition of Med Group Hammaslääkärit Oy by Colosseum Dental Group. Colosseum Dental Group is an international company that provides oral health and dental services, and owns Oral Hammaslääkärit Oy in Finland.
The FCCA launched Phase II investigations in April 2018 in order to determine, among other things, the extent to which public sector dental care creates competition pressure on private sector services. The FCCA considered that the transaction would impede effective competition in the private oral health market in four municipalities, where the market for private dental services was already highly concentrated. In addition, the FCCA considered that no new operators who could reduce the adverse competitive effects of the acquisition were likely to enter the market.
The FCCA approved the merger subject to conditions. Colosseum Dental Group committed to selling one of its clinics in all four municipalities, to not recruiting dentists from the dental clinics it is selling in the next two years, and to not buying the sold clinics back in the next 10 years.FCCA conditional approval in Avarn Security/Prevent 360
In October 2018, the FCCA conditionally approved the acquisition of Prevent 360 Holding Oy by Avarn Security Holding AS (Avarn), part of the Norwegian Sector Alarm Group. The companies offer manned guarding and security services to the public sector and to corporate clients.
The FCCA launched Phase II investigations in July 2018, arguing that the acquisition might affect competition in the security services market. According to the FCCA, the acquisition would concentrate the market even further and reduce competition especially between companies offering manned guarding and security services nationally.
According to the FCCA, the investigations revealed that the acquisition would have adverse competitive effects on the market segment of large clients and would reduce the number of main market operators from three to two. The FCCA approved the merger subject to conditions. Avarn committed to divesting a part of the merging entity's manned guarding and security services business, and to subcontracting manned patrol guarding services, alarm response services, and alarm receiving centre services to its competitors or potential competitors for a period of three years.FCCA approval in Terveystalo/Attendo
In December 2018, the FCCA approved the acquisition of Attendo Terveyspalvelut Oy (Attendo) by Terveystalo Healthcare Oy (Terveystalo). Both companies provide healthcare services.
The FCCA initiated Phase II investigations in July 2018 because it considered that the transaction could have adverse effects on competition in the Finnish market for healthcare services. In October 2018, the Market Court extended the time limit for the investigations at the FCCA's request due to the planned healthcare and social services reform, which is currently under parliamentary review, and the uncertainties related to the form and execution of the reform. The FCCA assessed the effects of the acquisition both in the market situation preceding the planned reform and following it. The FCCA based its assessment of the post-reform market on, among other things, a view of how competition would function in a new 'freedom of choice' market. The FCCA came to the conclusion that there were only minor overlaps in the business operations of the companies, and that the acquisition would not significantly impede effective competition.ii Trends, developments and strategies
The FCCA has itself noted that the need for reform of the Finnish merger control provisions should be investigated, including an assessment of whether the current turnover thresholds are still appropriate.iii Outlook
As mentioned above, amendments to the Competition Act with regard to, among other things, some aspects of merger control are under consideration. The Government Bill on amendments to the Competition Act includes proposals for changes regarding, among other things, the FCCA's handling times in merger control. Pursuant to the proposal, the deadlines of Phase I and II investigations would be calculated in working days instead of calendar days. Instead of the current one-month deadline, the deadline for Phase I investigations would be changed to 23 working days. Likewise, Phase II investigations would be carried out in 69 working days instead of three months.
In practice, there has been a significant change in the length of review periods in merger control. Among other things, in 2017 and 2018 the FCCA requested the Market Court to extend the deadline of Phase II investigations in four cases. Before then, the practice had been highly exceptional.
Nevertheless, no major developments are expected to take place in Finnish merger control in the immediate future. The FCCA anticipates that there will be a significant number of problematic transactions likely to have particularly serious effects on competition.