All questions

Merger review

In 2018, the SCA received 80 merger notifications. Two cases went to Phase II, of which one was cleared following the in-depth investigation. The second case is currently pending.

A concentration meets the thresholds and needs to be notified to the SCA if the combined aggregate turnover in Sweden of all undertakings concerned exceeds 1 billion kronor, and at least each of two undertakings concerned has a turnover in Sweden exceeding 200 million kronor.

Where the first threshold of 1 billion kronor is met, but the second threshold is not, the SCA may order a party to the concentration to notify a concentration if there are particular grounds for doing so. Such grounds may be when an undertaking already holds a strong market position and acquires a smaller or newly established undertaking. The acquirer may also in such circumstances submit a voluntary notification. In general, the SCA encourages undertakings to make voluntary notifications of mergers.

i Significant casesCheese brands

In December 2018, three dairy producers (Arla Foods, Norrmejerier and Falköpings Mejeri) notified their intention to acquire the intellectual property licensing company Svensk Mjölk via a joint venture arrangement. Svensk Mjölk licenses several cheese brands to some 20 companies, including dairy producers, food wholesalers and retailers. After an initial market survey, the SCA has decided to open an in-depth review of the case that is currently pending.

Security services

In the autumn of 2018, the SCA cleared the security company Nokas' acquisition of Avarn Security after an in-depth review in Phase II. The merger parties operated on the market for security guards, technical security systems and operation centres. The market essentially consisted of the two merger parties and one other competitor, Securitas. In, Sweden, the merged entity's market share would amount to amount to 25–45 per cent, whereas Securitas' would be around 50–60 per cent. In its effects analysis, the SCA analysed bidding data from the past three years. It concluded that the merging parties were not close competitors, which meant that the concentration would not significantly reduce competition.

District heating pipes

In October 2015, the SCA initiated a Phase II investigation to examine the notified acquisition by Logstor of Powerpipe. The relevant product market was the production and sale of district heating pipes. In February 2016, the SCA filed a lawsuit to prohibit the concentration. However, the lower court found that the merger would not significantly impede the existence or development of effective competition and approved the merger. The SCA appealed the judgment to the PMCA. This was the first merger case in 18 years to reach an appellate court. The key issue was the scope of the relevant geographic market. The SCA argued that the relevant geographic market solely covered the Swedish market. However, the PMCA held that the market comprised the EEA and Switzerland. The PMCA further held that the merged entity would not acquire a dominant position on this market, nor did other circumstances indicate that the concentration would significantly impede the existence or development of effective competition. Consequently, the PMCA affirmed the judgment.

ii Trends, developments and strategies

In comparison to previous years, the number of notifications to the SCA has increased steadily in Sweden and a majority of the notifications have been cleared in Phase I. In cases where there is an absence of vertical links and horizontal overlaps, the SCA often handles the matter with speed and a decision may be received significantly quicker than 25 working days.

Another topic of interest is that the Swedish merger control regime makes it possible for the SCA to request a transaction to be notified if there are particular reasons to so do, and even if the turnover thresholds are not exceeded. The acquirer may also in such circumstances decide to submit a notification voluntarily. The SCA has issued guidance that explains that a voluntary notification should be considered if the transaction can be expected to awaken fears and criticism among customers or competitors. The feature of voluntary notification is a particular mechanism in Swedish merger control.

In 2015, the SCA introduced further guidance for notifications and the assessment of concentrations. The guidance is an update of earlier guidance issued in 2010, and contains more accurate and updated information on merger control based on previous experience of the SCA. The purpose of the guidance is to improve awareness of the investigations of the SCA, contribute to greater predictability and ensure good conditions for cooperation between the parties and the SCA, contributing to a more efficient and effective investigation.

iii Outlook

As of 1 January 2018, the Competition Act was amended to grant the SCA extended decision-making powers in merger control cases. One argument for the reform was to increase conformity with the merger control procedure of the Commission and in other Member States. However, the reform did not receive a uniformly positive response, and it has been argued that the safeguards surrounding the SCA's decision-making process are not as well developed as, for example, the Commission's. It remains to be seen how the reform will be implemented in practice.