Enforcement proceedings

Enforcement authorities

Which authorities are responsible for enforcement of the dominance rules and what powers of investigation do they have?

The SCA is responsible for enforcing the Act. To this end, the SCA can carry out dawn raids, issue requests for information and interview physical persons.

Sanctions and remedies

What sanctions and remedies may the authorities impose? May individuals be fined or sanctioned?

The SCA can order firms to cease with anticompetitive conduct, subject to a fine in case of violation of the order.

The SCA can also bring a firm to court, the Patent and Market Court, and request that a fine for abuse of dominance be imposed. The maximum fine is capped at 10 per cent of the dominant firm’s turnover. The highest ever fine for an abuse is 38 million Swedish kronor, although quashed on appeal in 2018. The highest final fine is 35 million Swedish kronor imposed on TeliaSonera in the above-mentioned ADSL case (the SCA had however requested a fine of 144 million Swedish kronor). If the defendant acknowledges guilt and wishes to avoid court proceedings, and there are no legal issues that would be subject to judicial review, the SCA can impose a fine order without continued procedure. This is a rarely applied sanction, in particular in larger cases. To our knowledge, a fine order has never been imposed in a dominance case.

The sanction is administrative and not criminal, and individuals cannot be sanctioned.

A case can also be closed by way of a commitment by the defendant to remedy a competition concern identified by the SCA (or the Commission) (eg, opening up an infrastructure, changing certain trading terms, etc). If accepted, the commitment becomes legally binding and subject to a penalty in case of violation. In commitment cases, an infringement is not ultimately established.

Enforcement process

Can the competition enforcers impose sanctions directly or must they petition a court or other authority?

Save for the rarely used fine order, the SCA can currently not itself impose fines (it can, however, impose cease-and-desist orders and accept commitments). A fine can only be imposed by the courts, the Patent and Market Court and, on appeal, the Patent and Market Court of Appeal. This may, however, change in the future (see ‘Update and trends’).

Enforcement record

What is the recent enforcement record in your jurisdiction?

The most recent high-profile abuse of dominance cases in Sweden include SCA’s cases against Swedish Match (policy for generic labels in snus coolers, judgment from the Patent and Market Court of Appeal 29 June 2018, dismissing the SCA’s case), Nasdaq (exclusivity in server hall, judgment from the Patent and Market Court 15 January 2018, dismissing the SCA’s case, appeal pending before the Patent and Market Court of Appeal), Assa Abloy (loyalty rebates and margin squeeze in relation to wholesale locksmith services; case dropped absent proof of abuse) and FTI (termination of agreement with competing company, decision from the Patent and Market Court 21 January 2019 dismissing FTI’s case, appeal pending before the Patent and Market Court of Appeal).

Enforcement of the dominance rules by the SCA is quite rare in terms of number of cases, some one to three per year. Given that abuse cases are very time consuming and resource intense, the SCA would think twice before opening proceedings. An abuse investigation is likely to take one to three years before the SCA. If the case then goes to court, proceedings are likely to drag on another one to three years per instance. Exclusionary abuse cases are more likely to be investigated by the SCA than exploitative cases.

Contractual consequences

Where a clause in a contract involving a dominant company is inconsistent with the legislation, is the clause (or the entire contract) invalidated?

There is no explicit provision in the Act declaring a contract or a clause amounting to abuse invalid (as opposed to the rules on anticompetitive agreements). However, the Swedish legislator has stated that it should be possible to declare such contracts or clauses invalid under civil law.

Private enforcement

To what extent is private enforcement possible? Does the legislation provide a basis for a court or other authority to order a dominant firm to grant access, supply goods or services, conclude a contract or invalidate a provision or contract?

Private enforcement of the dominance rules is possible; a claimant that has suffered damage caused by a dominant firm’s abuse may claim compensation in a Swedish court. Since 27 December 2016, following implementation of the EU Damages Directive, Sweden has adopted the Competition Damages Act (2016:964) for competition law damages claims.

Private enforcement is not common in Sweden. Reasons for this may be excessively long court proceedings, difficulties in obtaining evidence and a non-litigious culture. However, private enforcement is on the rise; both follow-on (damage claims in the wake of public enforcement by the SCA) and standalone actions. We have, for example, seen major damage cases following the above-mentioned ADSL case against TeliaSonera. Those were, however, dismissed in 2017 (in one case as the claimant had not proven abuse and in the other as the claimant had not proven damage as claimed). In 2018, the courts dismissed yet another private abuse of dominance claim, namely an alleged price discrimination or margin squeeze in connection with a public procurement (Net at Once Sweden, Patent and Market Court, PMT 16599-15). One tenderer claimed that another tenderer was an unavoidable trading partner and that it had engaged in price discrimination or margin squeeze against the claimant. The judgment has been appealed and is pending before the Patent and Market Court of Appeal. Prior to these recent cases, we are aware of three additional stand-alone privately enforced abuse of dominance cases in regular courts (arbitration is also possible): VPC (Svea Court of Appeal, T 10012-08), Gävle Hamn (Stockholm District Court, T 5995-09) and Verizon (Stockholm District Court, T 20621-10).

A private enforcement ‘hybrid’ in Swedish competition law should also be mentioned, namely the ‘secondary standing’ available for complainants to the SCA. If the SCA decides to not investigate a complaint, or (following an investigation) to close a case without taking action, the complainant (or rather ‘an undertaking that is affected by the infringement’) can itself take the case to the Patent and Market Court and request the court to impose a cease-and-desist order. In these cases, damages are not awarded.

Damages

Do companies harmed by abusive practices have a claim for damages? Who adjudicates claims and how are damages calculated or assessed?

Under the Competition Damages Act, a firm that intentionally or negligently violates competition law should compensate for the damage caused. Compensation should cover actual loss and loss of profit. Hence, there are no punitive damages under Swedish law (compare this with treble damages in the US). The Patent and Market Court is the competent court for competition law damages claims.

There is no set method for calculating damages; the idea is that the sufferer should be put in the same position as if the infringement had not occurred (a counterfactual scenario). The complainant bears the burden of proof to prove damage and the amount suffered. The Commission has issued guidance on quantifying antitrust damages (‘Communication on quantifying harm in antitrust damages actions’), which can be used. In the end, the court may have to appreciate the damage and set an appropriate amount. The courts are bound by the amount claimed by the claimant (ie, cannot award higher damages).

Appeals

To what court may authority decisions finding an abuse be appealed?

Cease-and-desist orders by the SCA may be appealed to the Patent and Market Court (whose decisions or judgment can be appealed to the Patent and Market Court of Appeal), which will conduct a full review of the case. Various procedural decisions by the SCA may also be appealed to the Patent and Market Court (eg, concerning dawn raids).

If the SCA requests the Patent and Market Court to impose a fine, a full court review of the case will follow. The judgment can be appealed to the Patent and Market Court of Appeal.