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Investigations

Initiating an investigation

Who can initiate an investigation of potential cartel conduct?

Restrictions of competition are investigated both on the initiative of the Finnish Competition and Consumer Authority (FCCA) and following a complaint. A competitor or other party which has grounds to suspect that competition law has been breached can file a complaint with the FCCA. In addition, any company or individual can anonymously tip off the FCCA as to a suspicious feature of the market. The FCCA will initiate formal proceedings if this is necessary to safeguard effective competition in the market. The FCCA has the right to prioritise its tasks but, as its focus is on the most harmful market behaviour, cartel investigations take priority.

If an investigation is initiated by complainants or third parties, what rights (if any) do they have?

Complainants may generally express their views on the draft decision on how to resolve the matter. They may also have a right to appeal a decision if the matter affects them in a sufficiently direct way.

What obligations does a company have on learning that an investigation has commenced?

If the FCCA so requests, an undertaking or association of undertakings subject to investigation is obliged to provide the authority with all of the information and documents needed for the investigation of a suspected cartel. The FCCA may request the information it deems necessary from the parties. The obligation to provide information applies to all companies that are party to an investigation in any capacity.

A company subject to an investigation also has a general obligation to cooperate with the FCCA, and must provide the necessary information truthfully and precisely.

What obligations does a company have if it believes that an investigation is likely?

There are no particular obligations in such situations. 

What are the potential consequences of failing to act or delaying action?

There are no formal penalties for such behaviour under competition law.

However, the FCCA may impose a periodic penalty payment to enforce an order or obligation under the act. The periodic penalty payment cannot be imposed on an individual to fulfil the obligation to attend the FCCA’s hearing during the investigation.

In addition, providing an authority with false evidence may lead to a fine or to imprisonment for at most six months. This penalty applies to individuals.

Formal stages of investigation

What are the formal stages of and approximate timeframe for investigations?

There is no formal timeframe or specific stages to be followed during the investigation, although the FCCA has a stated goal of closing the investigation of certain low-importance matters within six months of initiation of the case. The FCCA must inform the investigated undertaking of its position in the investigation and the suspected offences as soon as possible without jeopardising the investigation. After the investigation phase concludes, the FCCA will provide the parties with a draft decision on how it intends to act (eg, to propose an infringement fine to the Market Court or to close the investigation with no further action to be taken). By the draft decision, the FCCA discloses its views on the conduct being assessed and narrows down, for example, the scope and length of the alleged infringement. The companies subject to the investigation have the right to express their opinions on the FCCA’s views. After this, the FCCA generally finalises the investigation and issues its decision. Investigations typically take a relatively long time, even several years.

Investigative powers

What investigative powers do the authorities have?

In addition to making requests of undertakings, the FCCA has the right to invite a representative of an undertaking or an association of undertakings to appear before it if this is necessary to gather the information needed when investigating a suspected cartel.

The FCCA and the regional state administrative agencies are entitled to conduct dawn raids (see below). 

What is the geographic reach of public enforcement actions?

The FCCA investigates competition restrictions with an effect in Finland. However, the FCCA may request executive assistance from the competition authorities of other EU member states in investigations into undertakings operating in those countries if they are suspected of restrictive practices targeting the Finnish market or Finnish customers.

When is court approval required to invoke these powers?

The FCCA needs authorisation from the Market Court to conduct a dawn raid anywhere other than in a company’s business premises. Examples of such inspection targets include the homes or summer houses of company executives or employees.

Are searches of business and personal premises authorised? If so, which bodies carry out searches and will they wait for legal advisers to arrive?

Yes. The authorities can examine various types of document and data both on company premises and in other locations such as private homes. In the latter case, court authorisation is needed. The authorities are also entitled to seal premises or documents and to question the executives and employees of the inspected undertaking.

Inspections are carried out by officials of the FCCA and the regional state administrative agencies. The inspections may also be carried out by the European Commission.

An undertaking has a right to have its external legal adviser present during the investigation, but the commencement of the inspection is not conditional on the presence of an adviser. In general, the inspectors are ready to wait a short time for the adviser to arrive before starting the inspection.

What level of cooperation with the authorities is required and what are the consequences for failing to cooperate?

The company subject to inspection has a general duty to cooperate and may not resist or hinder the inspectors’ work. The duty to cooperate covers, for example, assisting inspectors in locating requested documents and giving honest answers to the inspectors’ questions. However, there is no obligation to provide material without it being requested or to answer questions that would amount to admitting infringement. There are no immediate penalties for failing to cooperate, but it may have an impact on how the matter is processed later. An attempt to actively hinder an inspection could result in criminal charges for the individual concerned.

Is in-house legal advice or attorney work product protected by the law of privilege? Does this extend to the advice of in-house counsel?

Legal professional privilege is applied only to correspondence between an external legal adviser and his or her client. The advice of in-house counsel is not covered by legal privilege. 

Are any other limitations imposed on investigatory powers in order to safeguard the rights of those under investigation?

When the FCCA questions an undertaking’s representatives during the inspection or in hearings, the representatives do not have to answer questions that would amount to admitting the undertaking’s participation in a cartel. Legal advisers are entitled to be present when representatives are questioned.

When conducting an inspection in private homes and summer houses, the authorities may not seal the premises, devices or documents, nor may they question individuals on the facts of a suspected infringement.

What is the process for objecting to an authority’s exercise of its claimed powers?

The Competition Act includes no provisions on objections. In practice, an undertaking can present claims regarding authorities’ conduct in the course of the main proceedings in the Market Court. If a case does not go to the Market Court, an undertaking cannot object to authorities’ conduct except through extraordinary appeals.

Publicity and confidentiality

What information about investigations will be made publicly available and at which stage(s) of the process?

The FCCA must inform the investigated undertaking of its position in the investigation and the suspected offences as soon as possible without jeopardising the investigation. In addition, the undertaking under investigation has the right to receive information on the documents concerning the investigation and the phase of the proceedings insofar as it cannot harm investigations in the matter. In practice, the FCCA typically refuses to disclose most case documents at least until the draft decision is sent to the parties on the grounds that disclosure would, by default, jeopardise the investigation.

The FCCA does not usually reveal information as to the identity of a complainant to the parties subject to investigation. It also does not typically disclose the identities of the undertakings under investigation unless they do so first.

Is any information automatically confidential and is confidentiality available on request?

The parties can identify, for example, their business secrets and request that such information not be disclosed to third parties or the other parties in the case. However, the FCCA makes the ultimate choice as to whether to treat this information as confidential. Decisions on confidentiality are most often made when a party requests documents from the FCCA. The FCCA’s decisions may be appealed.

Leniency documents (especially the corporate statement) are always automatically confidential without a separate request.

International cooperation

Do the authorities in your jurisdiction cooperate with authorities in other jurisdictions?

Yes. The FCCA acts in close cooperation with the European Commission and the other Nordic competition authorities, and within the European Competition Network.

Do the relevant enforcement authorities request waivers so as to allow for increased cooperation with authorities in other jurisdictions? What are the consequences of declining to grant a waiver?

The FCCA does not appear to request waivers.

Decisions

How is a cartel investigation resolved? Are settlements, plea bargains or other negotiated resolutions available?

A cartel investigation is resolved through a decision by the FCCA. The FCCA may propose an infringement fine to the Market Court or order particular conduct to cease. It may also terminate the investigation unconditionally or conditionally based on commitments given by the parties under investigation.

Settlements, plea bargains or other negotiated solutions are not possible under existing law or propose legislative changes (with the exception of full and partial leniency).

What is the process for negotiating a settlement, plea bargain or other negotiated resolution? Do such resolutions require court or other approval?

Not applicable (see above).

If a settlement is not reached, what is the procedure for adjudicating a charge of cartel conduct?

If, at the end of an investigation, the FCCA finds that a cartel existed, it may propose an infringement fine to the Market Court or order a particular conduct to cease. A draft of such a proposal or decision (essentially corresponding to a statement of objections) is sent in advance for comments to the subject of the proposal or decision. The Market Court and, on appeal, the Supreme Administrative Court will make the final decision on imposing infringement fines.

Which party must prove its case? What is the relevant standard of proof?

The FCCA must prove that a restriction of competition has occurred. There are no specific provisions on the standard of proof.

Is there a hearing? If so, what is the process for submitting evidence and testimony?

In cartel matters the Market Court typically arranges an oral hearing with opening and closing statements. Written evidence can be introduced and witnesses can be named up to and during the hearing. Parties (including the FCCA) will present the evidence and hear the witnesses in the hearing. Naming evidence and witnesses is typically done by submitting a written document to the court.

What are the accused’s procedural rights?

The accused party has various procedural rights, including:

  • the right to receive information on its position in the investigation and what it is suspected of as soon as possible;
  • the right to receive, on request, information on the documents concerning the investigation and the phase of the proceedings insofar as this cannot harm the investigation and is not prohibited by rules concerning general access to documents;
  • the right to legal professional privilege and to withhold an admission of having breached competition law; and
  • the right to be heard within a reasonable time limit on a proposed infringement fine or a decision establishing a violation of competition law.

Appeal process

What is the appeal process?

A Market Court ruling resolving an infringement fine proposal (ie, a ruling imposing a fine or declining to do so) can be appealed to the Supreme Administrative Court by a party subject to the proposed fine, the FCCA or a third party if the decision is considered to affect it in a sufficiently direct and obvious manner.

In addition, an FCCA decision ordering that particular conduct stop can be appealed to the Market Court by a party subject to the decision. This decision, as well as a decision terminating an investigation, can also be appealed to the Market Court by a third party if the decision is considered to affect it in a sufficiently direct and obvious manner. The parties and the FCCA may appeal a Market Court’s ruling to the Supreme Administrative Court.

To what extent can the appeal body review the agency’s findings of fact, legal assessment and penalties?

The Market Court may fully review all aspects of the FCCA’s assessments and conclusions in all cases. Similarly, the Supreme Administrative Court may fully review all aspects of the Market Court and the FCCA’s assessments and conclusions.

Penalties

Penalties for companies

What are the potential penalties for companies involved in a cartel?

The only direct penalty available is an infringement fine, which is imposed by the Market Court based on a Finnish Competition and Consumer Authority (FCCA) proposal. Failure to comply with an FCCA decision or order may result in a periodic penalty payment.

Are there guidelines in place for penalties? If not, how are penalties normally calculated?

An infringement fine may not exceed 10% of the turnover of an undertaking or an association of undertakings concerned during the year in which the undertaking or the association of undertakings was last involved in the infringement. The amount of the fine is based on an overall assessment which takes into account factors including the nature and extent, the degree of gravity and the duration of the infringement. The FCCA has a set of guidelines setting out how it approaches each factor.

Do the authorities take into account any penalties imposed in other jurisdictions?

In principle, this option is available within the context described above, but has not been used to date.

How can a company mitigate its exposure to fines?

Apart from applying for leniency, there are no obvious ways to mitigate exposure through, for example, corporate restructurings. Refusing to participate in cartel conduct and carefully documenting compliant behaviour for the avoidance of erroneous convictions remain the best ways to mitigate exposure.

Penalties for individuals

What are the potential penalties for individuals involved in a cartel?

There are no specific penalties for individuals.

Do the authorities take into account any penalties imposed in other jurisdictions?

Not applicable (see above).

Is a company permitted to pay a penalty imposed on its employee?

Not applicable (see above).

Is a company permitted to continue to employ an employee involved in cartel conduct?

Yes. 

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