Investigation and settlement

Legal representation

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?

There are no rules in the Swedish Competition Act regarding legal representation. Instead, it is the Swedish Bar Association’s Code of Conduct (the Code of Conduct) that limits the ability of a member of the Swedish Bar to represent several persons in the same case. The relevant section of the Code of Conduct is section 3.2, which states that an attorney must not accept a mandate if there exists a conflict of interest or a significant risk of a conflict of interest.

A conflict of interest exists if, for example:

  • the attorney is assisting another client in the same matter and the clients have conflicting interests;
  • the attorney is assisting another client in a closely related matter and the clients have conflicting interests;
  • there is a risk that knowledge covered by the attorney’s duty of confidentiality may be of relevance in the matter; or
  • there exists any other circumstance that prevents the attorney from acting in the client’s best interests in respect of the mandate.

‘Significant risk’ indicates that the attorney must also consider whether a conflict of interest may arise in the future. Persons who take part in a cartel can be personally sanctioned by a trading prohibition from three to 10 years. The relevant circle of persons are either those who formally represent the company, such as the managing director, or the board of directors, but it could also be the person who factually heads the business, without a formal position.

Thus, for example, if a trading prohibition could be relevant, then the company and certain of its officers could need separate legal representation.

Dawn raids

For what types of infringement would the regulatory authority launch a dawn raid? Are there any specific procedural rules for dawn raids?

The SCA can launch a dawn raid for any infringement of the Swedish Competition Act. Currently, it is the Patent and Market Court that decides on the mandate for a dawn raid, following an application from the SCA. Such an application will only be granted if there is reason to believe that an infringement has been committed, if the undertaking has failed to comply with an order to provide information, documents etc., or there is otherwise a risk that evidence may be withheld or tampered with. In all instances the importance of the requested measure must be weighed against the disruption or other inconvenience caused to the party affected by the measure. If there is a risk that the value of the investigation would otherwise be reduced, the court may order such measure without consulting the company.

As described below, there is a governmental report proposing that the SCA shall be granted powers to decide on dawn raids itself, without having to apply to the court for permission.

During a dawn raid, the SCA may examine and take copies of, or extracts from accounting records and other business documents (including computer records), request oral explanations from representatives or employees of the company and otherwise investigate the premises, property and means of transport of the undertaking. The SCA does not have the right to mirror data and bring it back to the SCA’s premises without the company’s consent, which is different from the powers of the European Commission. Subject to the approval of the Patent and Market Court, dawn raids may also be carried out in private homes or other private spaces (such as cars) of board members or employees of the company.

What are the company’s rights and obligations during a dawn raid?

The company has an obligation to cooperate with the SCA during a dawn raid; however, its right of defence must always be respected. However, there are no sanctions for non-compliance with the duty to cooperate, compared with EU law. Many companies request legal representation to ensure that their rights are respected when the SCA carries out a dawn raid. Nevertheless, the SCA is not obliged to wait for the legal counsel before starting their onsite investigation.

If there is a document the SCA would like to read and the company claims that it is covered by legal privilege, the document is to be placed in a sealed envelope and handed over to the Patent and Market Court that will determine if the document is covered by legal privilege or not.

Settlement mechanisms

Is there any mechanism to settle, or to make commitments to regulators, during an investigation?

There is no formal settlement procedure in Sweden. The closest thing to it is that the SCA may decide on an administrative fine if the infringement is established and all parties agree. A fine order that has been accepted is regarded to be a legally binding judgment. The SCA may also issue a behavioural order, ordering an undertaking to cease certain behaviour. Such order may be combined with fines. The undertaking may also offer to voluntarily cease a certain behaviour, and the SCA may, in such cases, decide to close its investigation.

It is up to the undertaking to approve or reject the suggested administrative fine in the fine order. In those cases where the undertaking does not approve the suggested fine, the SCA will take legal action and request the court to order the undertaking to pay the fine. The SCA is in such cases bound by its earlier request and cannot claim a higher fine than it had offered to the undertaking in the fine order.

As indicated above, a settlement through a fine order requires that the infringement is established. This means that the SCA will not accept a settlement through a fine order where there are uncertainties regarding the course of events, or where the case involves legal issues that can be of importance for the determination of similar cases.

If the SCA believes that the case is suitable for settlement through a fine order, it will inform the undertaking of this in connection with its draft statement of objection. The benefits of accepting a fine order is that the company will not have to undergo a lengthy court proceeding. The decision for a fine order is typically rather short, only a few pages long, which will make things more difficult for any undertakings seeking follow-on damages to prove their case, compared to when they will have access to a whole court file.

What weight will the authorities place on companies implementing or amending a compliance programme in settlement negotiations?

From the SCA’s perspective a company should be aware of its obligations and the implementation or amendment of a compliance programme will only have limited effects in settlement negotiations.

Corporate monitorships

Are corporate monitorships used in your jurisdiction?

The SCA is able to accept commitments offered by a company in order to avoid an infringement investigation. Such remedies are foremost behavioural and often subject to the penalty of a fine if the commitments are not followed. Regarding mergers, the SCA prefers structural remedies in mergers as it is easier to ensure compliance, similar to the decision-making practice of the European Commission. However, the use of trustees are used more frequently in the European Commission’s decisions than by the SCA. The SCA has, in one case, approved a merger with a trustee ensuring compliance with structural remedies to sell off certain assets as well as ensuring that the company carries on the business maintaining the value of the part of the business to be sold off, whereby the powers of the trustee is described in the decision to conditionally clear the merger. The SCA will later assess compliance with the decision and the monitor can be obliged to report to the SCA.

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?

As Sweden does not have a settlement procedure, it is the SCA that is responsible for drafting its decisions and a defendant may comment on draft decisions, but not otherwise influence the wording of the decision. There is, therefore, no possibility of agreeing on statements of the facts with the authorities. However, in principle, all evidence is admissible in Sweden and the court is free to weigh the evidence presented as it chooses under the rule on free provision and trial of evidence.

Invoking legal privilege

Can the company or an individual invoke legal privilege or privilege against self-incrimination in an investigation?

The duty to testify under Swedish law means that a person (suspect or non-suspect) cannot refuse to truthfully answer questions during an interrogation other than when there is a risk of self-incrimination, as self-incrimination is a valid defence in Sweden.

Furthermore, declarations made within a leniency programme and settlement briefs may not be produced as evidence according to the Competition Damages Act. The Competition Damages Act also protects certain other categories of documents, in the respect that they may only be produced to the court by such party who has originally obtained them from the competition authority, or a person who has acquired the rights of the first person. This is to prevent a ‘market for documents’ from arising.

Written correspondence to and from external lawyers held by the lawyer or by the client is also protected by legal privilege and may not be subject to a court order to produce such documents. External lawyers are also prevented from giving evidence on matters confided to them in their practice. Advice from in-house lawyers is not legally privileged in Sweden (essentially due to the fact that an in-house lawyer cannot be a member of the Swedish Bar Association).

Confidentiality protection

What confidentiality protection is afforded to the company and/or individual involved in competition investigations?

As a general principle, documents received or drawn up by a public authority are public. This principle is, however, made subject to a number of exceptions in the Public Access to Information and Secrecy Act (2009:400) involving that in the SCA’s file, information on an undertaking’s business operations, inventions and research results are treated as confidential if the undertaking may be expected to suffer injury if the information is disclosed. Furthermore, such documents that a competition authority holds and that are declarations within a leniency programme, settlement briefs, written responses and other information that have been submitted to SCA, information provided by the SCA to the parties (such as a draft statement of objections, or draft settlement decision) and settlement briefs that have been recalled, may not be subject to a production order as long as the SCA is still handling the case.

Typically, confidentiality is only maintained towards third parties and not regarding any party to the proceedings. However, courts have the authority, under criminal responsibility, to ban counsels, management or parties from providing certain documents received during the court proceedings relating to competition damages to third parties in order to prevent a ‘trade with documents’.

Refusal to cooperate

What are the penalties for refusing to cooperate with the authorities in an investigation?

The SCA may request that persons (including companies) provide information or documents and that they submit themselves for interrogation at a time and a place that the authority decides or that municipalities that carry out economic activities provide statements of costs and incomes. Such requests can be combined with fines.

Infringement notification

Is there a duty to notify the regulator of competition infringements?

There is no duty to notify the regulator of competition infringements.

Limitation period

What are the limitation periods for competition infringements?

The rules on limitation have been changed through the introduction of the Competition Damages Act.

Previously, it was stated that the right to damages for breach of the Competition Act or articles 101 or 102 TFEU lapses if no claim is brought within 10 years from the date on which the injury was sustained, namely, when the infringement was made. In practice, with the long handling times of the authorities and courts, this meant that the right to damages had often lapsed. Therefore, the new Competition Damages Act stipulates a limitation period of five years from when the infringement ceased and the claimant became aware of, or would reasonably have been aware, of the anticompetitive behaviour, that this behaviour caused damages and the identity of the infringer. Previously, there were also no rules on a standstill or interruption of the limitation period during the time that a competition authority investigated the issue or legal proceedings were conducted. Such rules have now been included in the Competition Damages Act, stipulating that a limitation period is interrupted if a competition authority takes actions in case of the infringement that the claim relates to. A new limitation period commences on the day there is a legally binding decision on the infringement or if the authority concludes its investigation in another manner.