What is the general attitude of business and the authorities to competition compliance?
The importance of competition compliance is increasing, as evidenced by the Finnish Competition and Consumer Authority’s (FCCA’s) general attitude to competition restrictions, investments in investigations and the public enforcement of competition rules. Correspondingly, the importance of competition compliance and the priority of competition matters is growing within businesses and among executives.
Government compliance programmes
Is there a government-approved standard for compliance programmes in your jurisdiction?
There is no government-approved standard for compliance programmes in Finland.
Applicability of compliance programmes
Is the compliance guidance generally applicable or do best practice and obligations depend on company size and the sector of the economy in which it operates?
Compliance guidance is generally applicable. Best practices and obligations do not depend on company size or the business sector. However, the most critical matters naturally vary depending on a company’s business activities and the business sector in question.
If the company has a competition compliance programme in place, does it have any effect on sanctions?
Under Sections 12 and 13 of the Competition Act (948/2011), a company’s competition compliance programme generally has no effect on sanctions for possible breaches of competition rules. Likewise, the FCCA’s guidelines on assessing fine amounts (3/2011) include no references to compliance programmes regarding the overall assessment of competition rule breaches and related sanctions. However, as evidence of a company’s firm intention to follow competition rules, compliance programmes may be somewhat relevant to the FCCA’s overall assessment of possible sanctions.
Implementing a competition compliance programme
Commitment to competition compliance
How does a company demonstrate its commitment to competition compliance?
Companies demonstrate their competition compliance mainly by assuring the compliance of competition rules by their directors, officers and employees. Compliance may be implemented by:
- competition compliance manuals;
- training programmes and workshops;
- obligatory annual training (refresher courses);
- training for new employees; and
- undertakings included in employment and director agreements with liquidated damages and termination of those agreements in case of breach.
In addition, companies may have whistleblowing systems through which employees may notify the management of companies of any abuse of competition law, hire in-house competition counsel and use a national or international network of external competition counsels. These experts may participate in meetings of the board of directors of a joint venture of competing companies to ensure that competition rules regarding the exchange of information are complied with.
What are the key features of a compliance programme regarding risk identification?
All personnel – especially those involved in sales or drawing up vertical agreements or agreements with horizontal elements – should identify potential risks and consult an in-house or external competition counsel before executing any measures. In addition, competition compliance manuals must identify what kind of discussions, meetings, correspondence and transactions with competitors or potential competitors bear risks.
Key to competition compliance is compliant wording in correspondence with stakeholders. It is of utmost importance to identify risks relating to significant cartels (ie, price fixing, market sharing, bid rigging and production or sales quotas) as well as activities in trade associations and procedures if competition-sensitive topics are handled in those meetings. Typically, risk identification also covers free time.
What are the key features of a compliance programme regarding risk-assessment?
The key features of a compliance programme regarding risk assessment include scoping and high-level assessment and detailed risk assessment.
The key purpose of scoping and high-level assessment is to provide a basis for deciding how to define the organisational focus to identify topics for further risk prevention and management measures. In line with this aim, an assessment should be made on a gross basis before considering the effects of any countermeasures that have been taken. Assessment results show actual status and changes to previous assessments. Observations relating to an assessment and recommendations relating thereto are submitted to the chief financial officer or executive board for consideration and decision. Unless otherwise decided, competition compliance topics classified as high priority will be subject to high-level assessment and detailed risk assessment.
What are the key features of a compliance programme regarding risk-mitigation?
A key feature of a compliance programme regarding risk assessment is identifying competition risks as early as possible and encouraging employees and officers to use whistleblowing systems and ask for further advice if they identify potential competition risks. Company management should discuss potential competition risks immediately after identification with an outside or in-house competition counsel and give procedural (in-house) guidance for employees and officers using compliance checklists (eg, dos and don’ts charts) from which they may quickly check the most important identified risks and procedures. The revision history and validation information should be added to this compliance checklist to ensure its proper use.
Compliance programme review
What are the key features of a compliance programme regarding review?
The key features of a compliance programme regarding review are:
- guidelines on dos and don’ts;
- guidelines on retail pricing;
- guidelines on how to behave as a market dominant player;
- guidelines on contact and information exchange with competitors; and
- guidelines on action in trade associations and dawn raids.
Compliance programmes are company specific and their coverage depends on a company’s industry, status and market position, as well as its competitors’ market positions. While most companies have a competition compliance manual, introducing and implementing guidelines can be challenging, especially for smaller companies with a presence only in Finland. Finnish subsidiaries of international groups generally obey the group’s competition compliance programmes.
Dealing with competitors
Arrangements to avoid
What types of arrangements should the company avoid entering into with its competitors?
In general, companies should have special focus on all discussions, correspondence and contractual relationships with their actual and potential competitors. Special focus should be placed on processing or exchanging information that could be categorised as sensitive information between competitors.
Therefore, all contractual relationships with competitors without special focus on competition issues should be avoided prior to ensuring compliance with competition rules.
What precautions can be taken to manage competition law risk when the company enters into an arrangement with a competitor?
All of a company’s relevant employees – especially employees with sales responsibilities – and officers must be aware of and be able to identify the company’s actual and potential competitors.
Companies should conduct preliminary discussions with their legal representatives or outside competition counsel prior to any discussions or dealings with competitors. Prior to signing or otherwise entering into any contractual arrangements with competitors, companies must assess any competition law risks with their legal representatives, compliance officers or outside legal counsel.
What form must behaviour take to constitute a cartel?
Section 5 of the Competition Act prohibits cartels, including all agreements, decisions and concerted practices which have as their object the significant prevention, restriction or distortion of competition or which result in a significant prevention, restriction or distortion of competition. Therefore, in order to constitute a cartel, no agreement (written or oral) is required. For example, the prohibition covers so-called ‘gentlemen’s’ agreements’ and the exchange of sensitive information between competitors. As stated in the Competition Act, the prohibition also covers concerted practices between competitors.
Under Section 5 of the act, all agreements between undertakings, decisions by associations of undertakings and concerted practices by undertakings which have as their object the significant prevention, restriction or distortion of competition or which result in a significant prevention, restriction or distortion of competition are prohibited.
So-called ‘by object’ competition restrictions are also prohibited and need not have an actual effect on the market, cause actual damage to third parties or generally have a verifiable effect on the market.
Under what circumstances can cartels be exempted from sanctions?
In general, cartels falling within the scope of Section 5 of Competition Act or Article 101(1) of the Treaty on the Functioning of the European Union (TFEU) are not exempted from sanctions.
However, under Section 6 of the Competition Act, cartels may be exempted from sanctions if the agreement, decision or concerted practice of undertakings:
- contributes to improving the production or distribution of goods or promoting technical or economic progress;
- gives consumers a fair share of the resulting benefit;
- imposes no restraints on the undertakings concerned; or
- affords no such undertakings the possibility of eliminating competition in respect of a substantial part of the products in question.
The abovementioned conditions must be fulfilled for the exemption to apply and undertakings must provide evidence thereof. As Finnish competition regulation includes no notification mechanism, companies must self-evaluate the precondition and any necessary evidence related thereto.
Further, as EU competition regulations apply in Finland, block exemption regulations apply to any qualifying competition restriction. Further, the prohibition of competition restrictions which fall within the scope of Section 5 of the Competition Act (prohibited restraints on competition between undertakings) only concerns competition restrictions which aim at or result in the significant prevention, restriction or distortion of competition. Whether the competition restriction aims to or results in the significant restriction of competition is determined on a case-by-case basis. In practice, the notice on agreements of minor importance which do not appreciably restrict competition under Article 101(1) of the TFEU (the de minimis notice) applies when assessing whether the restriction significantly distorts competition. However, the de minimis notice does not cover agreements which aim to prevent, restrict or distort competition. Correspondingly, the Finnish competition regime includes the general interpretation that competition restrictions by object always restrict competition significantly and are not exempted by the rules included in the de minimis notice.
Can the company exchange information with its competitors?
According to Finnish competition regulation, the exchange of any sensitive information between actual or potential competitors is prohibited and may be regarded as a cartel. Prohibited exchanges of information may be executed as a part of a cartel between competitors. However, the exchange of sensitive information between competitors may constitute prohibited competition restriction and fall within the scope of Section 5 of the Competition Act if the exchange of information reduces or removes the degree of uncertainty as to the operation of the market in question, with the result that competition between undertakings is restricted.
As stated in the guidelines on the applicability of Article 101 of the TFEU to horizontal cooperation agreements (2011/C 11/01, paragraph 61) (the Horizontal Guidelines):
information exchange can constitute a concerted practice if it reduces strategic uncertainty in the market thereby facilitating collusion, that is to say, if the data exchanged is strategic. Consequently, sharing of strategic data between competitors amounts to concertation, because it reduces the independence of competitors’ conduct on the market and diminishes their incentives to compete.
Therefore, companies must not disclose any of their business plans or the terms that they are considering offering to customers. In line with the Paragraph 86 of the Horizontal Guidelines, the Finnish Competition and Consumer Authority (FCCA) considers ‘strategic information’ as that which relates to:
- prices (eg, actual prices, discounts, increases, reductions or rebates);
- customer lists;
- production costs;
- marketing plans;
- technologies; and
- R&D programmes and their results.
In general, information relating to prices and quantities is the most strategic, followed by information about costs and demand.
The risks of prohibited exchange of information may relate to the direct exchange of information between competitors or the indirect exchange of information (eg, through trade associations). Further, so-called ‘hub-and-spoke’ cartels, in which the sensitive information is delivered or disclosed to a competitor through a third party (eg, a manufacturer’s sensitive information sent to another manufacturer via a wholesaler) may result in a prohibited exchange of information.
Cartel leniency programmes
Is a leniency programme available to companies or individuals who participate in a cartel in your jurisdiction?
Under Sections 14 to 18 of the Competition Act, a leniency programme applies and is available to undertakings in Finland.
The Finnish leniency programme includes two levels of exemptions regarding sanctions: an undertaking may receive immunity from a penalty payment or the penalty payment may be reduced.
Provisions for the immunity from penalty payment are set out in Section 14 of the Competition Act. Under specific conditions, a penalty payment will not be imposed on an undertaking in the case of a secret restraint on competition between competitors whereby the purchase or selling prices or other trading conditions are fixed, production or sales are limited or markets, customers or sources of supply are shared.
Immunity is available for an undertaking where it:
- provides the Finnish Competition and Consumer Authority (FCCA) with a leniency statement and information or evidence on whose grounds the FCCA may conduct an inspection (ie, a dawn raid); or
- following an inspection (dawn raid), delivers a leniency statement and provides information or evidence on whose grounds the FCCA may conclude that Section 5 of the Competition Act or Article 101 of the Treaty on the Functioning of the European Union has been violated.
Another condition for immunity against penalty payments is where the undertaking has provided a leniency statement, information and evidence before the FCCA has obtained the information from another source.
An undertaking which has pressured another undertaking into participating in a cartel cannot obtain immunity.
The penalty payment imposed on an undertaking that participated in a restraint on competition (other than the undertaking that obtained immunity) will be reduced if it submits to the FCCA a leniency statement and information and evidence that is significant for establishing a restraint on competition or its entire extent or nature before the FCCA has received this information from another source. The penalty payment will be reduced as follows:
- 30% to 50% if the undertaking submits the information first;
- 20% to 30% if the undertaking submits the information second; and
- a 20% maximum in any other situation.
An undertaking that has received conditional immunity from fines cannot obtain a reduction of penalties regarding the same alleged competition restriction.
There are additional conditions for immunity and the reduction of the penalty payments. In order to benefit from the leniency programme, an undertaking must:
- immediately cease its participation in the restraint on competition once it has provided the FCCA with a leniency application;
- cooperate with the FCCA during the entire investigation;
- not destroy any evidence covered by the application prior to or following the submission of the leniency application; and
- keep confidential the content of the leniency application and the fact of having made or having considered making a leniency application.
Notwithstanding these conditions, under the direction of the FCCA an undertaking may continue its participation in an infringement to the extent that it is necessary to secure the success of the FCCA’s investigations.
The applicant’s name will be kept secret until the FCCA has provided the Market Court with a proposal for the penalty payment regarding the competition restriction.
Can the company apply for leniency for itself and its individual officers and employees?
Under Finnish competition legislation, fines may be imposed only on undertakings, not company officers or employees. Therefore, leniency is available only for undertakings.
Can the company reserve a place in line before a formal leniency application is ready?
With regard to the leniency programme, an undertaking may reserve a place in line prior to providing the FCCA with all of the information needed for a formal leniency application (the marker system).
The FCCA grants undertakings conditional immunity from fines after they submit the information and evidence required for the FCCA to conduct an inspection; after the inspection, the FCCA may conclude that competition rules have been violated.
The FCCA will not proceed with additional leniency applications prior to deciding whether it will grant conditional immunity to the first undertaking to submit a leniency application. In case the undertaking has completed or is about to file a completed application regarding the same case to the European Commission or another competition authority of an EU member state in order to obtain immunity from fines, conditional immunity may be granted based on a shortened application.
If the company blows the whistle on other cartels, can it get any benefit?
Leniency is available only for a company’s own cartel behaviour and therefore no benefit is available for undertakings whistleblowing on other cartels’ behaviour.
Dealing with commercial partners (suppliers and customers)
What types of vertical arrangements between the company and its suppliers or customers are subject to competition enforcement?
The following types of vertical arrangement are subject to competition enforcement:
- the anti-competitive foreclosure of other suppliers or other buyers;
- the softening of competition and facilitation of collusion between a supplier and its competitors;
- the softening of competition between and facilitation of collusion between a buyer and its competitors; and
- the creation of obstacles to market integration.
Arrangements between a company and its suppliers or customers may result in the abuse of dominant position if the company holds an exclusive right or other dominant position in a specified product market, such that it:
- significantly controls the price level or terms of delivery of that product; or
- in some other corresponding manner, influences the competitive conditions on a given production or distribution level.
Agency agreements are not subject to competition enforcement if the principal bears the commercial and financial risks relating to the selling and purchasing of contract goods and services and obligations imposed on the agent in relation to the contracts concluded or negotiated on behalf of the principal. The determining factor is the financial or commercial risk borne by the agent in relation to the activities for which they have been appointed as an agent by the principal.
Agency agreements are regulated by the Act on Commercial Representatives and Salesmen, which has no rules regarding competition. There are no court cases relating to agency agreements.
Would the regulatory authority consider the above vertical arrangements per se illegal? If not, how do they analyse and decide on these arrangements?
The regulatory authority does not consider vertical arrangements illegal per se. Even the most serious restraints (eg, a resale price maintenance, a total ban of internet sales, parallel imports restrictions, single branding, exclusive distribution and customer allocation) may be allowed in exceptional cases if the undertakings can demonstrate that the arrangement still produces efficiency benefits which exceed the negative effects of the arrangement on competition. However, it is reasonable to assume that agreements and practices containing the most serious competition restraints (eg, resale price maintenance) are prohibited.
Under what circumstances can vertical arrangements be exempted from sanctions?
Vertical agreements may be exempted from sanctions if they also produce pro-competitive effects in the form of efficiencies which outweigh their anti-competitive effects. For this exception to apply:
- the vertical agreement must produce objective economic benefits;
- the restrictions on competition must be indispensable to attain the efficiencies;
- consumers must receive a fair share of the efficiency gains; and
- the agreement must not afford the parties the possibility of eliminating competition in respect of a substantial part of the products concerned.
The competitive concerns of distribution agreements depend on the structure of the market and the position of the undertakings on the market. If the 30% market share threshold is not exceeded by either the supplier on the market where it sells the contract products to sellers or the buyer on the market where it purchases the contract products and there are no serious restraints included in the agreement, the arrangement is presumed to comply with the Competition Act.
How to behave as a market dominant player
Determining dominant market player
Which factors does your jurisdiction apply to determine if the company holds a dominant market position?
The Finnish Competition and Consumer Authority (FCCA) first defines the relevant product and geographical markets that are relevant for the case. The substitutability of demand and supply must be considered when the relevant market is defined.
The assessment of potential dominance in the relevant markets is based on the examination of several factors, but there is a presumption of dominance if the market share on the relevant market is over 50%. The importance of high market shares may be undercut by:
- market share deflation trends;
- customers’ bargaining power;
- market share fluctuations resulting from infrequently made lump purchases;
- supply and demand substitutability;
- rapid technological progress; or
- major competitors’ competitive benefits.
There is a specific section in the Competition Act regarding market dominance in grocery trading. An undertaking or an association of undertakings with a minimum of 30% market share in the Finnish daily consumer goods retail trade will be deemed to occupy a dominant position in the Finnish daily consumer goods market. This includes both the retail and procurement markets.
Abuse of dominance
If the company holds a dominant market position, what forms of behaviour constitute abuse of market dominance? Describe any recent cases.
Abuse by one or more undertakings or association of undertakings of a dominant position is prohibited. Abuse may relate to pricing, such as predatory pricing, price squeezing, excessive pricing, price discrimination and rebate systems. Other forms of the abuse of dominant position cover the refusal to supply, tying and exclusive sales or exclusive purchasing agreements.
In 2012 the FCCA deemed Valio, the biggest dairy business actor in Finland, guilty of predatory pricing in Finland's raw milk markets, with the objective of foreclosing competition in them. In its 2014 ruling the Market Court imposed a penalty payment of €70 million on Valio, as proposed by the FCCA. The Market Court held that the relevant markets concerned raw milk and were nationwide, and that Valio had a dominant position on these markets. Valio’s market share on the sale of raw milk was over 50% during the whole review period and it had supplied annually approximately 86% of all raw milk produced in Finland. The Market Court considered the pricing of raw milk below costs as a severe competition restriction because Valio’s objective was to supersede its competitors and raise prices of raw milk thereafter. In its 2016 decision, the Supreme Administrative Court upheld the outcome of the Market Court’s decision.
Under what circumstances can abusing market dominance be exempted from sanctions or excluded from enforcement?
By its decision, the FCCA may require that the commitments submitted by undertakings or associations of undertakings involved in a suspected infringement would be binding on them if the commitments are such that the restrictive nature of the conduct can be eliminated. The FCCA may reinitiate proceedings if:
- any fact on which the decision is based has significantly changed;
- the undertakings concerned infringe their commitments; or
- the decision has been based on insufficient, false or misleading information submitted by the parties.
In the case of an abuse of dominant position, the FCCA may refrain from making a penalty payment proposal if the undertaking or association of undertakings has significantly assisted the FCCA in the investigation of a restraint on competition. The Market Court cannot impose penalty payments.
Competition compliance in mergers and acquisitions
Competition authority approval
Does the company need to obtain approval from the competition authority for mergers and acquisitions? Is it mandatory or voluntary to obtain approval before completion?
Finnish Competition and Consumer Authority (FCCA) approval is required if a merger or acquisition exceeds the thresholds specified in the Competition Act. Merger control provisions apply to all mergers and acquisitions where the aggregate turnover of the parties concerned exceeds €350 million and where at least two of the parties concerned each have a turnover of more than €20 million generated in Finland.
A ‘party to a concentration’ includes:
- the acquirer of control;
- the acquirer of business operations or a part thereof;
- the object of control;
- the business operation or a part thereof;
- an entity or foundation party to a merger; or
- the founder of a joint venture.
Those obliged to notify and obtain approval are:
- the acquirer of control;
- the acquirer of business operations or a part thereof;
- the entities or foundations party to a merger; and
- the founders of a joint venture.
A concentration must be notified to the FCCA following:
- the conclusion of an agreement;
- the acquisition of control; or
- the announcement of a public bid but prior to the implementation of the transaction.
There is no exact time limit for the notification and thus nothing prevents notification to the FCCA as soon as the parties demonstrate with sufficient certainty their intention to conclude a concentration. Concentration implementation is not permitted until clearance or conditional clearance has been granted or until the transaction can be deemed to have been cleared.
How long does it normally take to obtain approval?
The merger control procedure officially begins when the FCCA receives a correct and complete merger notification. Most notifications are cleared within one month (usually within two weeks) from the beginning of the merger control procedure.
During the initial phase, the FCCA decides whether further investigations are required. If the FCCA does not decide to commence further proceedings within 23 working days from the first working day after receiving the notification, the concentration will be considered approved. Processing will not begin if the notification is significantly incomplete or misleading. If the FCCA does not attach conditions or make a proposal to prohibit the concentration within 69 working days from making the decision to initiate further proceedings, the concentration is considered approved. The Market Court may extend the deadline by a maximum of 46 working days.
The FCCA may extend the time limit for proceedings by the same number of days as the delay in submitting the information, calculated from the original submission deadline. The FCCA issues the decision on such extensions.
The FCCA can waive some of the notification requirements based on pre-notification consultations if a full notification is deemed unnecessary for appraising the merger. The FCCA can also agree to the use of a short-form notification procedure as a result of the preliminary consultations. However, the FCCA cannot give a final verdict on any potential competition concerns or other aspects of the appraisal process during the preliminary consultations. Any comments made by FCCA representatives during the consultations are therefore provisional. In many cases, preliminary consultations take place via telephone.
If the company obtains approval, does it mean the authority has confirmed the terms in the documents will be considered compliant with competition law?
The FCCA accepts a transaction if a concentration does not significantly impede effective competition in the Finnish markets or a substantial part thereof – in particular, as a result of the creation or strengthening of a dominant position. Even though the sale and purchase agreement, asset purchase agreement and merger documents are delivered to the FCCA, the authority does not confirm or accept the terms of the agreements. However, the parties may request the FCCA to examine and accept certain restrictive contractual issues or obligations relating to the merger (eg, non-competition obligations, recruiting restrictions, licence agreements or purchase and supply obligations) separately. Any FCCA decisions regarding mergers automatically cover ancillary restraints that are directly related and necessary to the implementation of the merger without the FCCA having to assess such restrictions in individual cases. Therefore, it is essential for the parties to the merger to carry out the self-assessment of the ancillary character of the restraint. The notifying parties can nevertheless request the FCCA to expressly assess the ancillary character of restrictions in connection with the merger notification procedure.
For the restrictions to be considered ancillary to a merger, they must be directly related to the main transaction and intended to allow smooth transition to the changed company structure after the merger and necessary to its implementation. In determining whether a restriction is necessary, it is appropriate to ensure that its duration, subject matter and geographic field of application do not exceed what the implementation of the merger reasonably requires. If equally effective alternatives are available for attaining the legitimate aim pursued, undertakings must choose the one which is objectively the least restrictive of competition in order for the restrictions to be considered ancillary to the merger.
Failure to file
What are the consequences for failure to file, delay in filing and incomplete filing? Have there been any recent cases?
If the information submitted by the parties to the concentration is substantially incomplete or misleading, the time limits do not begin to lapse. Incomplete filing may lead to a penalty payment.
Parties to the concentration which fail to file cannot implement the concentration. A penalty payment will be imposed on an undertaking which implements a concentration prior to receiving a final decision without conditions or with conditions attached or other approval in the relevant concentration case, unless the conduct is deemed to be minor or the imposition of a fine is otherwise unjustified with respect to safeguarding competition.
Because there is no exact deadline for filing, parties cannot file late. Therefore, a penalty payment cannot be ordered for a delay either.
There have been no recent cases.
Investigation and settlement
Under which circumstances would the company and officers or employees need separate legal representation? Do the authorities require separate legal representation during certain types of investigations?
The Finnish competition regime does not require undertakings (nor any officers or employees of undertakings) to have separate legal representation during Finnish Competition and Consumer Authority (FCCA) investigations. However, it is common practice for an undertaking to appoint outside counsels from the beginning of the authority’s investigations.
Under the Administrative Procedure Act (434/2003), which applies to FCCA investigations, an undertaking is entitled to retain an attorney or a counsel for an administrative matter. However, an undertaking’s representatives must appear in person if a matter requires clarification.
It is highly recommended for an undertaking under investigation by competition authorities to use outside counsel in connection with investigations.
For what types of infringement would the regulatory authority launch a dawn raid? Are there any specific procedural rules for dawn raids?
Dawn raids are a frequently used method of investigation in Finland and mostly relate to cartel investigations. However, dawn raids may also relate to other suspected competition restriction covered by the Competition Act and merger control matters. The FCCA has established procedures regarding dawn raids.
At the beginning of an inspection, the FCCA notifies the undertaking of its inspection decision. The suspected restriction of competition investigated by the FCCA is stated in the inspection decision, as well as the provisions of law applicable to rights of inspection. Customarily, the investigation starts with a discussion with the undertaking’s representatives, during which the undertaking is also informed of the related rights and responsibilities. However, a discussion is not a prerequisite for initiating an inspection.
After informing the undertaking of the inspection decision, the FCCA’s representatives may enter the premises which they consider to be of relevance to the inspection. The FCCA may (but is not obliged to) wait for the arrival of an external adviser of the company for a reasonable time before beginning to investigate the company’s documents and data or interviewing its representatives.
During the inspection, the FCCA examines business documents and paper-based and electronic data and makes copies. Usually, officers’ and employees’ computers are searched and copied, including any electronic correspondence. Therefore, extensive electronic material is reviewed during an inspection.
What are the company’s rights and obligations during a dawn raid?
In addition to the Competition Act, the rights and responsibilities of the FCCA and the company are based on the Administrative Procedure Act.
Under the Competition Act, an undertaking must allow FCCA inspectors to enter its premises and access its business data and documents.
An inspected undertaking must cooperate in carrying out the inspection by providing FCCA with all of the documents and information relating to the matter under investigation.
Representatives of an undertaking have the right to be present during the inspections. An inspected undertaking cannot be forced to admit that it has committed any competition infringement. However, its representatives must answer factual questions and deliver documents even if such information could be used against it.
Is there any mechanism to settle, or to make commitments to regulators, during an investigation?
The FCCA may confirm that the commitments submitted by an undertaking or undertakings involved in a suspected infringement will be binding on them, provided that the restrictive nature of the conduct can be eliminated by the actions defined in the commitments. However, the FCCA may re-initiate proceedings if:
- any fact on which the decision is based has significantly changed;
- the undertakings concerned infringe their commitments; or
- the decision has been based on insufficient, false or misleading information submitted by the parties involved.
What weight will the authorities place on companies implementing or amending a compliance programme in settlement negotiations?
The focus of the commitments submitted by undertakings involved in a suspected infringement is on cessation of the suspected competition infringement.
Are corporate monitorships used in your jurisdiction?
Corporate monitorships are not used in Finland.
Statements of facts
Are agreed statements of facts in a settlement with the authorities automatically admissible as evidence in actions for private damages, including class-actions or representative claims?
The information and evidence submitted to the FCCA and information included in the leniency statement for obtaining immunity or a reduced fine may not be used for any other purpose than:
- an order to terminate a restraint on competition;
- an order to deliver a product;
- a commitment decision;
- a withdrawal of a block exemption; or
- a review of a penalty payment proposed by the FCCA, Market Court or Supreme Administrative Court.
This information may also be used in court proceedings relating to damages caused by competition restriction (private enforcement of competition regulation).
Invoking legal privilege
Can the company or an individual invoke legal privilege or privilege against self-incrimination in an investigation?
Legal privilege is applicable to FCCA investigations.
No specific application is needed in order to benefit from legal privilege. Authorities must comply with the protection of legal professional privilege (LPP) material and not include LPP material in an investigation.
An undertaking need not deliver to the FCCA documents which contain LPP material.
Therefore, FCCA inspections do not target confidential correspondence between companies and their external legal advisers which is exchanged for the purpose of defending the company in relation to an alleged restriction of competition. The FCCA also takes into account the guidelines set by the decisional practice of EU courts concerning the protection of material within the scope of LPP.
In practice, during an inspection the FCCA aims to identify and separate LPP material from other documents and data. An undertaking may be asked to state the name of its external legal adviser or the law firm used. Further, an undertaking may be asked to state which representatives or employees are likely to possess LPP material.
In practice, the FCCA may ensure that the document is within the scope of LPP material by way of a cursory examination. A document will not be handled as LPP material based on only the name or email address of an adviser or the subject. During an investigation, the FCCA may exclude a document from the material, set it temporarily aside or place it under seal and later assess whether the document falls within LPP material later during the investigation.
What confidentiality protection is afforded to the company and/or individual involved in competition investigations?
Under Section 24 of the Act on Openness of Government Activities (621/1999), documents containing information regarding a private business or professional secret, as well as documents containing other comparable private business information, must be kept secret. In addition, FCCA investigations must consider privacy protection. For example, during a dawn raid, protected materials include emails relating to a person’s private life. In practice, the FCCA has the right to confirm whether such material falls within the scope of its inspections, but the FCCA and individual inspectors must refrain from inspecting documents and data found to be private in any more detail. Further, the FCCA and inspectors are bound by the obligation of confidentiality concerning the contents of private documents and data.
Refusal to cooperate
What are the penalties for refusing to cooperate with the authorities in an investigation?
The FCCA may impose a periodic penalty payment to enforce the condition set or the order, prohibition or obligation issued based on the Competition Act. Periodic penalty payments are ordered by the Market Court and may not be imposed on a natural person to fulfil their obligation to deliver information when the person has been invited to appear before the FCCA in connection with an investigation.
The Act on Conditional Fines (1113/1990) provides for the imposition and ruling of a conditional fine.
During an inspection, the following practices are punishable under the Competition Act or the Criminal Code:
- providing false evidence (eg, false, legally relevant oral information to an authority);
- preventing an official act or making such an act more difficult to carry out; and
- breaking a seal without FCCA permission.
Is there a duty to notify the regulator of competition infringements?
There is no duty to notify the regulator of competition infringements in Finland.
What are the limitation periods for competition infringements?
Unless the proposal to the Market Court has been filed within five years of the date of the violation or, in the case of a continuous infringement, within five years of the date on which the violation ended, penalty payments will not be imposed for:
- a violation of the obligations regarding prohibited restraints on competition between undertakings;
- an abuse of dominant position;
- a violation of the obligations regarding prohibiting a concentration and imposing conditions upon a concentration or implementation of a concentration; or
- a violation of Articles 101 or 102 of the Treaty on the Functioning of the European Union.
The FCCA’s measures to investigate an infringement will reset the limitation period. However, a penalty payment will not be imposed if the FCCA’s proposal to the Market Court has not been made within 10 years of the date of the violation or, in the case of a continuous infringement, within 10 years of the date on which the violation ended.
Are there any other regulated anticompetitive practices not mentioned above? Provide details.
In addition to prohibition of competition restrictions and merger control regulation, EU state aid controls apply in Finland.
Are there any proposals for competition law reform in your jurisdiction? If yes, what effects will it have on the company’s compliance?
In March 2017 a working group preparing amendments to the Competition Act published its report. The proposed changes focused especially on the Finnish Competition and Consumer Authority’s inspections and penalty system under the Competition Act. In addition, there were proposals for improvements to the protection of privileged communications between undertakings and their outside legal counsel.
The working group proposals have subsequently led to Government Proposals 193/2017 and 68/2018 and amendments to the Competition Act.
Updates and trends
Are there any emerging trends or hot topics regarding competition compliance in your jurisdiction?
In March 2019 the European Court of Justice (ECJ) published its judgment (preliminary ruling) in a matter addressed to the ECJ by the Finnish Supreme Court concerning whether the principle of economic continuity should be applied to the private enforcement of competition rules. The question had remained unresolved in both EU competition law and national legislation.
According to the preliminary ruling, the person liable for the damages should be identified in accordance with Article 101 of the Treaty on the Functioning of the European Union and the principle of economic continuity should be applied to private enforcement as it has been applied to the public enforcement of competition rules. Therefore, the same entity to which the fines have been addressed will also be liable for the damages.
Following the principle of economic continuity, the ECJ’s judgment means that despite restructuring or otherwise changing a corporate structure, liability for damages may be imposed on the entity that in economic terms infringed the competition rules. Legal form can be ignored when identifying the liable person and attributing liability. This also means that risks relating to competition law infringements and related consequences will be determined within corporate acquisitions to an increasing extent.
The preliminary ruling was requested by the Finnish Supreme Court in connection with City of Vantaa v Skanska Industrial Solutions Oy, NCC Industry Oy and Asfaltmix Oy (C-724/17). The court proceedings concern claims for damages caused by several asphalt pavement companies taking part in nationwide asphalt cartel between 1994 and 2002.