Notification and clearance timetableFiling formalities
What are the deadlines for filing? Are there sanctions for not filing and are they applied in practice?
There is no specific deadline for filing a notification. Notification must be submitted to the FCCA following the conclusion of the acquisition agreement, the acquisition of control, or the announcement of the public bid but prior to the implementation of the concentration. A concentration may also be notified to the FCCA as soon as the parties demonstrate with sufficient certainty their intention to conclude a concentration, for example, by a letter of intent or a memorandum of understanding signed by all parties to the concentration or by a public announcement of the intention to make a public bid. As there is no specific deadline for filing, sanctions are only relevant when the concentration is implemented before the FCCA has cleared it.
Which parties are responsible for filing and are filing fees required?
The acquirer of control, or those acquiring joint control, the acquirer of business, the parties to the merger or the founders of a full-function joint venture are responsible for filing. There are no filing fees.
What are the waiting periods and does implementation of the transaction have to be suspended prior to clearance?
Under the main rule, no steps may be taken to implement the transaction prior to its clearance. However, when the Market Court is investigating a transaction on the basis of the FCCA’s request to block it, the prohibition on the implementation ceases in one month from such request, unless the Market Court orders the suspension to continue.
The FCCA and the Market Court may, upon request, permit certain implementing measures to be taken during the investigation period. Further, a party that has launched a public bid can purchase the shares offered prior to clearance, even though it may not use its voting rights to determine the competitive behaviour of the target company. The same rule applies in certain cases where shares are redeemed.Pre-clearance closing
What are the possible sanctions involved in closing or integrating the activities of the merging businesses before clearance and are they applied in practice?
If the transaction is closed before clearance, a fine of up to 10 per cent of the total turnover of the relevant undertakings may be imposed. The fine is imposed by the Market Court on the basis of the FCCA’s request. When the amount of the fine is set, attention is paid to the nature, extent, degree of gravity and duration of the infringement. The fine will be imposed, unless the infringement is considered minor or the imposition of the fine is otherwise unnecessary in view of safeguarding competition.
Furthermore, the Market Court may - at the request of the FCCA - prohibit the concentration or order the concentration to be dissolved or annulled; for example, by requiring the undertakings concerned or assets brought together to be separated or by requiring the cessation of the joint control to restore the conditions of effective competition. The Market Court may, instead of prohibiting the concentration, attach conditions on its clearance. The request of the FCCA must be notified to the parties within one year from the closing of the transaction.
There are no decisions so far where sanctions would have been imposed for closing before clearance.
Are sanctions applied in cases involving closing before clearance in foreign-to-foreign mergers?
The same rules apply to foreign-to-foreign mergers. However, there are no decisions so far where sanctions have been imposed for closing before clearance in foreign-to-foreign mergers.
What solutions might be acceptable to permit closing before clearance in a foreign-to-foreign merger?
Implementation of a merger before clearance is, under the main rule, prohibited also in foreign-to-foreign mergers. However, under the Competition Act, the FCCA has the possibility to decide to grant permission to implement a merger before clearance.Public takeovers
Are there any special merger control rules applicable to public takeover bids?
No (except for what is described under question 11).Documentation
What is the level of detail required in the preparation of a filing, and are there sanctions for supplying wrong or missing information?
The notification form is broadly similar to Form CO of the EU Merger Regulation. Various types of information must be given - depending on the details of each case - inter alia, on the parties, the transaction structure, relevant markets, competitors, customers, suppliers, market conditions, entry barriers, trade associations and ancillary restraints. The notification form must be completed in Finnish or Swedish; appendices to the notification are generally also accepted in English. Standard appendices include corporate documents of the parties, the agreements bringing about the transaction being notified, certain internal analysis of the transaction itself, as well as the markets relevant to the assessment of the transaction. Generally, the FCCA has been less stringent on requiring internal documents to be produced (in comparison, for example, to the European Commission).
In certain circumstances, the notification may be filed with the FCCA using the ‘short-form’ notification. The short-form notification is mainly used in notifying joint ventures that do not have connections to the Finnish markets. Such a situation may be deemed to exist where the joint venture - or the jointly controlled undertaking, as the case may be - has no business activities in Finland and generates no turnover from Finland.
The FCCA may, in individual cases, grant waivers in respect of the information to be given if certain information is deemed unnecessary for the investigation or if the transaction affects competition only to an insignificant extent.
Supplying wrong or misleading information to the FCCA is sanctioned in the Criminal Act (39/1889).Investigation phases and timetable
What are the typical steps and different phases of the investigation?
Under the main rule, the FCCA will, after it has received a notification, send a market inquiry to the competitors, customers and suppliers of the parties to the concentration. The aim of the procedure is to establish the structure of the market and the competition conditions therein, and to afford the relevant market players the possibility to be heard on the planned concentration.
Should the FCCA decide to initiate a second-phase investigation, more detailed questions may be sent to competitors, customers and suppliers. The statements as well as other issues pertinent to the case will be discussed with the parties (see question 16).
Parties are generally advised to engage in pre-notification consultations with the FCCA in all cases and in cases where the horizontal overlap or vertical links between the parties’ activities are considerable, it is recommended to approach the FCCA as early as possible, even prior to definitive signing of the transactional agreements, so as to ensure that the process starts as early as possible.
What is the statutory timetable for clearance? Can it be speeded up?
In the first phase, the concentration will be examined by the FCCA. The FCCA’s investigation deadlines were amended by an amendment of the Competition Act that entered into force on 17 June 2019. Under the new provisions, the FCCA has a period of 23 working days during which it has to clear the concentration as such or with conditions, conclude that the transaction will not be caught by the Competition Act or decide to initiate a second-phase investigation.
If the FCCA decides to initiate a second-phase investigation it must, within 69 working days of such decision, either clear the concentration as such or with conditions, or request the Market Court to block it. The Market Court can extend the deadline by 46 working days, giving the FCCA a maximum of 115 working days for a Phase II investigation. Having received the FCCA’s request to block a concentration, the Market Court has three months to clear the concentration as is, clear it with conditions or prohibit it.
With the Market Court procedure included, the maximum aggregate investigation period of a concentration may amount to over nine months (which includes the possible 46-working-day extension of the FCCA’s second-phase investigation period). However, this is expected only in cases where there is significant overlap between the parties’ activities and the resulting market shares are high; under the main rule, most concentrations are cleared in the first phase. Depending on the complexity of the case, the FCCA’s first phase investigations typically take approximately two to four weeks.
It should be noted that the time limits set for the FCCA’s decision-making will not start running until a complete notification has been filed. In addition, the FCCA has the power to ‘stop the clock’ if the parties fail to respond to the FCCA’s request for additional information within the set time limit or provide essentially insufficient or incorrect information. In such cases, the FCCA may extend the time limits for decision-making by the corresponding number of days during which the requested information was outstanding.
The merger review procedure in the FCCA may be speeded up by pre-notification discussions, to which the parties are generally encouraged by the FCCA. Also, it might be worth noticing that pre-notification discussions will in most cases de facto speed up the merger review, but they do not affect or change the time limits prescribed for the review.