Enforcement

Complaints procedure for private parties

Is there a procedure whereby private parties can complain to the authority responsible for antitrust enforcement about alleged unlawful vertical restraints?

There is no formal procedure, but the Swedish Competition Authority (SCA) encourages undertakings to submit complaints to the Complaints unit at the SCA or use the whistle-blower function on its website. The SCA has published a list of questions on its website it wishes complainants to respond to, allowing it to better assess the complaint. The questions relate to who the complainant is, the anticompetitive conduct, the market structure and the market affected by the anticompetitive conduct.

Regulatory enforcement

How frequently is antitrust law applied to vertical restraints by the authority responsible for antitrust enforcement? What are the main enforcement priorities regarding vertical restraints?

The Swedish Competition Authority (SCA) and the courts have not dealt with many vertical restraint actions. However, in the past year the SCA, as other competition authorities, has investigated vertical restraint more than usually. The SCA has a prioritisation policy that guides its decisions regarding which cases to further investigate and which ones to not pursue. The policy does not differentiate between different competition law infringements, but states that the SCA will prioritise cases of general interest and that will lead to clear results to promote effective competition to the benefit of consumers.

What are the consequences of an infringement of antitrust law for the validity or enforceability of a contract containing prohibited vertical restraints?

If an agreement is found to be anticompetitive according to Chapter 2, section 1 of the Swedish Competition Act, the agreement is, as a general rule, not valid according to Chapter 2, section 6 of the Act which mirrors article 101(2) TFEU. The nullity only applies to binding agreements, terms and decisions and implies that it cannot be applied or enforced. According to the preparatory works, only the part of the agreement that is anticompetitive is null whereas other parts of the agreement remain valid.

May the authority responsible for antitrust enforcement directly impose penalties or must it petition another entity? What sanctions and remedies can the authorities impose? What notable sanctions or remedies have been imposed? Can any trends be identified in this regard?

The SCA can order firms to cease with an anticompetitive conduct, subject to a periodic penalty payment in the case of violation. The SCA cannot impose fines itself if the facts are disputed by the parties. In the case of dispute, the SCA must file an application with the Patent and Market Court and request the court to impose a fine. The maximum fine is 10 per cent of the infringing undertaking's turnover. Sanctions in vertical cases are not common; instead, the SCA has mainly accepted commitments subject to periodic penalty payments in the case of violation.

Investigative powers of the authority

What investigative powers does the authority responsible for antitrust enforcement have when enforcing the prohibition of vertical restraints?

The Swedish Competition Authority (SCA)’s investigative powers include the possibility to carry out dawn raids, issue requests for information, conduct sector specific inquires, interview physical persons and order interim measures. It is very rare for the SCA to order interim measures, although it did so in December 2019 in IM WITH BRUCE.

Private enforcement

To what extent is private enforcement possible? Can non-parties to agreements containing vertical restraints obtain declaratory judgments or injunctions and bring damages claims? Can the parties to agreements themselves bring damages claims? What remedies are available? How long should a company expect a private enforcement action to take?

Private enforcement of vertical restraints is possible, a claimant that has suffered damage caused by a vertical restraint may claim compensation in a Swedish court. The Competition Damages Act (2016:964), implementing the EU Damages Directive, is the applicable legislation for competition law damages claims. Compensation for damage caused by an infringement includes compensation for factual loss and loss of income. The objective being to restore the claimant's financial situation to that which it would have been had infringement never occurred. Punitive damages are not recognised.

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 in both follow-on and standalone actions.

A private enforcement hybrid in Swedish competition law, ‘secondary standing’ is 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 judge the conduct as well as impose damages. The latest private enforcement case relating to vertical restraints is Visita’s action against Booking.com.

The total time required for processing competition law matters in the SCA, through appeals to both the Patent and Market Court and the Patent and Market Court of Appeal, is estimated at between three and five years from the launch of a case. In general, the losing party bears the legal costs and the winning party can recover all reasonable litigation costs.