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Trends and climate


How would you describe the current merger control climate, including any trends in particular industry sectors?

In Finland, mergers are reviewed by the Finnish Competition and Consumer Authority (FCCA). Approximately 20-30 notifications are submitted to the FCCA annually, with several in-depth investigations opened every year.

The adoption of the significant impediment of effective competition (SIEC) test in 2011 in line with the EU Merger Regulation (139/2004) has allowed the FCCA to focus more extensively on the effects of a concentration on competition. Market definition and market shares remain important, but are not necessarily decisive factors in the assessment. The assessment of the effects of a concentration on the markets can be characterised as a general assessment of many factors, with the purpose of estimating the effects of the merger on a future market situation. The FCCA regularly involves its economists in merger control investigations and has applied sophisticated economic analysis tools in some of its more significant cases.

Each concentration is assessed individually. After a decade-long pause in prohibitions, in recent years the FCCA has proposed to prohibit two concentrations. On the other hand, simpler cases with no harmful effects on competition are cleared relatively quickly. In general, concentrations in different sectors are not looked on differently, although certain sectors have been reviewed more frequently due to higher merger activity or the relevant turnover-based thresholds being easier to exceed.


Are there are any proposals to reform or amend the existing merger control regime?

A working group set up by the Ministry of Employment and the Economy presented its report proposing amendments to the Competition Act (948/2011) in April 2017. The working group's report included minor amendment proposals to the merger control provisions found in the Competition Act. The working group proposed to amend merger control procedural deadlines from applicable days to working days, similar to the procedure at the European Commission. According to the proposal, the FCCA will have 23 working days to complete the Phase 1 investigation. The government is expected to submit a bill based on the working group's proposals in late 2017 or early 2018.

As a part of the national social and healthcare reform, the ministry has assigned a working group to review the provisions of the Competition Act in relation to social and health services. The working group submitted its report in June 2017. Following the report of the working group, in June 2017 the government submitted a bill (76/2017) proposing a fixed-term obligation for undertakings in the field of social and healthcare services to notify mergers. Pursuant to the proposal on the fixed-term provision, the obligation to notify a merger would apply without any turnover thresholds when at least one of the parties to the transaction produces social or healthcare services, or medical laboratory or medical imaging services on the Finnish markets. The proposed provision still has several exceptions to its scope:

  • mergers between small undertakings;
  • mergers where parties already offer services in the name of the same group; and
  • transactions where private equity funds invest in other industries than the Finnish market for social and healthcare services would be exempt.

The FCCA would also have 45 days to review concentrations in the social and healthcare sector. These new provisions would be applicable from the day of enactment until December 31 2018. The amendment is intended to enter into force without delay, but the timing of the adoption of the bill is still unknown. Due to this uncertainty, it cannot be ruled out that the fixed-term obligation will continue after 2018.

 In addition to the fixed-term notification obligation, the working group also proposed a permanent change to the turnover thresholds regarding undertakings active in the field of social and healthcare services. According to the proposal, a merger is notifiable to the FCCA when at least two of the parties to the transaction produce social or healthcare services, or medical laboratory or medical imaging services on the Finnish markets, and their combined turnover exceeds €20 million or the turnover in Finland for each of at least two of the parties exceeds €2 million. The FCCA could also for special reasons demand a notification to be submitted in situations where the turnover thresholds are not exceeded, but the turnover of each of at least two parties exceeds €1 million and fewer than six months have passed from the completion of the transaction. Under these conditions, the parties would also have an option to voluntarily notify the transaction. These provisions are proposed to enter into force in early 2019, but the timing depends on the timing of the larger social and healthcare reform that is presently unclear and has been postponed several times.  

Further, the special provision which empowered the FCCA to intervene in a concentration in the electricity distribution industry if the parties' combined distributed 400 volt electricity exceeds 25% based on national levels was removed from the Competition Act on May 1 2017.

Legislation, triggers and thresholds

Legislation and authority

What legislation applies to the control of mergers?

Merger control rules are included in Chapter 4 of the Competition Act. The act harmonised the national merger provisions with the EU Merger Regulation (139/2004) with only minor exceptions. The legislative preparatory works (88/2010) also state that the practice of the European courts and the European Commission’s guidelines can be used when assessing a merger in accordance with the act.

The government has also issued two merger control decrees covering:

•the calculation of turnover of parties to the concentration (1011/2011); and

•the obligation to notify a concentration (1012/2011) specifying, for example, the notification form and the information to be submitted.

What is the relevant authority?

The Finnish Competition and Consumer Authority (FCCA) enforces the legislation and has sole jurisdiction to assess mergers where the relevant thresholds set in the Competition Act are met, unless the concentration is under investigation by the European Commission. The power to prohibit a concentration based on the FCCA’s proposal is held by the Market Court.

In addition, the Competition Act includes some sector-specific regulation for concentrations in the employee pension insurance, pension funds and insurance fund sectors. Any concentration in these sectors must be notified to and approved by the Finnish Financial Supervisory Authority. No separate notification to the FCCA is required if the Financial Supervisory Authority has asked for the FCCA’s statement concerning the proposed merger and the FCCA has stated that no impediment to approval of the concentration exists. Thus, the competitive assessment in these sectors is also conducted by the FCCA.

Transactions caught and thresholds

Under what circumstances is a transaction caught by the legislation?

The definition of a ‘concentration’ covers:

•acquisition of control;

•acquisition of a business or a part thereof;

•merger; and

•creation of a joint venture performing all the functions of an autonomous economic unit on a lasting basis.

The definition is mostly in line with the definition of a ‘concentration’ employed in the EU Merger Regulation (139/2004) and is effectively applied in a similar fashion, although the FCCA retains some case-specific discretion. Some differences to the EU Merger Regulation also exist – for example, there is no specific exemption for ‘warehousing structures’. Internal arrangements within a group of companies that do not amount to a change of control need not be notified.

Do thresholds apply to determine when a transaction is caught by the legislation?

Yes. A concentration must be notified where the aggregate worldwide turnover of the parties exceeds €350 million and the turnover of each of at least two of the parties accrued from Finland exceeds €20 million. The relevant turnovers are based on the company’s last financial statements. Special rules apply to calculating the turnover of investment companies, credit institutions and other financial institutions.

Informal guidance

Is it possible to seek informal guidance from the authority on a possible merger from either a jurisdictional or a substantive perspective?

The FCCA is always open to pre-notification discussions regarding jurisdiction, information to be submitted in the notification and substantive issues. Pre-notification discussions are recommended at least in more complex cases.


Are foreign-to-foreign mergers caught by the regime? Is a ‘local impact’ test applicable under the legislation?

The Competition Act does not treat foreign-to-foreign transactions differently and there is no local impact test.

Joint ventures

What types of joint venture are caught by the legislation?

The creation of a joint venture that carries out all functions of an autonomous economic unit on a lasting basis falls within the scope of the definition of a concentration. Non-full-function joint ventures do not constitute a concentration and are not subject to notification.


Process and timing

Is the notification process voluntary or mandatory?

The notification is mandatory when the relevant turnover thresholds are exceeded and the transaction in question amounts to a concentration..

What timing requirements apply when filing a notification?

The notification must be made before the transaction is implemented. In particular, the notification must be made after the conclusion of an agreement, the acquisition of control or the announcement of a public bid. Otherwise, there are no timing requirements and the notification may be submitted as soon as the parties may sufficiently demonstrate their intentions to enter into the transaction (eg, by signing a letter of intent).

What form should the notification take? What content is required?

The notification form's content is set in the Decree on Obligation to Notify (1012/2011) and is broadly similar to Form CO of the EU Merger Regulation. A concentration may also be notified by using a short-form notification contained as an Annex of the FCCA's Merger Control Guidelines. The party may ask the FCCA whether it approves the use of the short form, or may simply notify the concentration in accordance with the short form. However, the FCCA may always require the notifying party to use the normal, more detailed notification form. For instance, the use of the short form may be justifiable where companies set up a joint venture which accrues no revenue from Finland and has no other connection to the Finnish market.

The notification must include the information specified in the Decree on the Scope of the Obligation to Notify a Concentration (1012/2011). The filing must be made in Finnish or Swedish, but the annexes can also be in English. The FCCA may order the notifying parties to provide a Finnish or Swedish translation of any particularly important or ambiguous annexes. Any business secrets contained in the notification or its annexes must be clearly indicated by the parties.

Since November 2015 the notifications must be submitted electronically (in practice, on a portable hard drive such as an USB memory stick). Paper copies are no longer required.

Certain documents must be enclosed as annexes to the notification, such as:

•trade register extracts from each party;

•agreements concerning or relating to the concentration, such as share purchase agreements, shareholder agreements and public bids; and

•the latest annual reports and profit and loss accounts.

The parties can supplement the information provided in the notification by other annexes, schedules and diagrams. 

Is there a pre-notification process before formal notification, and if so, what does this involve?

Before submitting the notification it is possible to engage in confidential negotiations where the parties may discuss the preliminary views of the authorities and specify the information to be provided. While the FCCA typically grants audience for such meetings, negotiations are mainly held in more complicated matters. These open pre-notification discussions make it possible for the FCCA to evaluate a concentration before the procedural timelines begin to run. The meetings and their participants are confidential.

Pre-clearance implementation

Can a merger be implemented before clearance is obtained?

The transaction may not be implemented before the Finnish Competition and Consumer Authority (FCCA) has cleared the transaction.

However, the FCCA may grant permission to implement the merger before clearance in individual cases. Typically, the permission concerns only some implementation measures, not the entire transaction.

Measures necessary to preserve and safeguard assets and measures necessary to ensure the continuing of business may also be implemented.

Guidance from authorities

What guidance is available from the authorities?

The FCCA has published its Guidelines on Merger Control in 2011, which are largely in line with the European Commission’s guidelines. In practice, the FCCA is always willing to discuss issues related to the proposed concentration, jurisdiction and content of the notification.


What fees are payable to the authority for filing a notification?

There are no filing fees.

Publicity and confidentiality

What provisions apply regarding publicity and confidentiality?

The FCCA is obliged to treat the matter confidential until the official notification has been submitted to the FCCA, after which the matter is registered and the names of the parties become public. Business secrets contained in the notification, requests for comments to market participants and other materials are protected under the Act on Openness of Government Activities (621/1999) during and after the merger control procedure.


Are there any penalties for failing to notify a merger?

On a recommendation by the FCCA, the Market Court may impose fines of up to 10% of the infringing party's turnover where the party has failed to notify the concentration. The Market Court may also order the concentration to be dissolved. However, the FCCA has never made such a proposal.

Procedure and test

Procedure and timetable

What procedures are followed by the authority?  What is the timetable for the merger investigation?

The FCCA's review is divided into two phases, the latter of which is initiated only if the FCCA considers it necessary to investigate the concentration further.

Phase I investigations last for a maximum of one month from receipt of the notification. During Phase I the FCCA decides whether it investigates the notified concentration further and opens the Phase II investigation, or approves the concentration with or without conditions. If the FCCA does not make a decision within one month, the concentration is considered approved.

The FCCA clears the concentration during Phase I if there are no significant harmful effects on competition. In practice, the FCCA tries to issue decisions in cases with no competition concerns in approximately 10 working days, but is not obliged to do so.

In Phase II the FCCA has three months to decide whether to:

•impose conditions on the implementation of a concentration;

•approve it without conditions; or

•propose prohibition to the Market Court.

The FCCA may ask the Market Court to extend the Phase II investigation by up to two months, which it has done in some complex cases. The FCCA's practice is to require consent of the parties to the concentration to such a request.

The FCCA is open for confidential pre-notification negotiations which may lead to the FCCA requiring less information about a concentration or clearing it more rapidly after the actual notification is submitted. 

What obligations are imposed on the parties during the process?

The parties may not implement the concentration before the clearance decision has been issued. A party acquiring control of the business or a part thereof is under an obligation to submit the notification. The entities or foundations participating in a merger and the undertakings founding a full-function joint venture are also under an obligation to submit a notification.

The parties may also need to respond to the FCCA's specific questions or requests for certain data, with the risk that the FCCA may stop the procedural timelines until it has received all requested information. The FCCA is also empowered to carry out surprise investigations in merger control cases and has also done so in practice.

What role can third parties play in the process?

The FCCA customarily hears the customers, competitors and suppliers of the merging parties, as well as other authorities and trade associations during the review process. Third parties are also invited to submit their comments on the commitments that the parties have offered. Third parties have an extensive right to access documents and may also be granted an audience with the FCCA to express their views, particularly during Phase II investigations. However, the right to appeal the actual decision requires that the decision have a direct effect on the rights, obligations or interests of the complainant. The Supreme Administrative Court has ruled (Decision 2002:50) that generally, competitors cannot appeal a clearance decision. Pursuant to the Competition Act and the aforementioned decision of the Supreme Administrative Court, the Market Court can prohibit a concentration only based on a proposal by the FCCA. Therefore, an appealing party cannot have a concentration prohibited.

Substantive test

What is the substantive test applied by the authority?

The applicable substantive test is the significant impediment of effective competition (SIEC) test, under which it is assessed whether the proposed merger significantly impedes effective competition in Finnish markets or a substantial part thereof, particularly as a result of creating or strengthening of a dominant position. The SIEC test allows the assessment to have a wider focus on the actual competitive effects of the merger.


Does the legislation allow carve-out agreements in order to avoid delaying the global closing?

Measures necessary to preserve and safeguard assets and measures necessary to ensure the continuing of business may be implemented. Further, the FCCA may give permission for closing at least outside Finland, subject to receiving an application from the notifying party.

Test for joint ventures

Is a special substantive test applied for joint ventures?

No. The FCCA reviews joint ventures based on the SIEC test. The Competition Act contains no explicit provisions on assessing the possible coordination of the competitive behaviour of the joint venture's parent companies similarly to Article 2(4) of the EU Merger Regulation. However, according to the FCCA's Guidelines on Merger Control, the SIEC test also covers review of these effects.


Potential outcomes

What are the potential outcomes of the merger investigation? Please include reference to potential remedies, conditions and undertakings.

The FCCA may approve the concentration with or without conditions, or may propose to the Market Court that the concentration should be prohibited. The Market Court may then approve the concentration with conditions (which may be different from the ones submitted to the FCCA) or prohibit the concentration.

The parties may propose remedies for potential competition issues. It is up to the notifying party to propose sufficient remedies. Pursuant to the Competition Act, the FCCA cannot impose conditions on a concentration that are not approved by the notifying party. This effectively means that the parties must propose remedies early enough so that the FCCA can properly assess them within the relevant time limits. Recent two prohibition proposals made by the FCCA were based on the view that sufficient remedies had not been offered early enough.

The preparatory works of the Competition Act state that mainly structural remedies (eg, divestments) should be used in merger control cases. The FCCA favours structural remedies over behavioural ones, and notes in its Guidelines on Merger Control that remedies which are ordered to be followed are usually structural. However, examples of clearing concentrations based only on behavioural remedies can also be found in the FCCA's practice in situations where they are found appropriate and sufficient to counter the problems identified.


Right of appeal

Is there a right of appeal?

A notifying party cannot appeal a conditional approval decision. If the FCCA makes a proposal to the Market Court to prohibit the concentration, the parties are asked to submit their written statement regarding the proposal to the court. The Market Court’s decisions may be further appealed to the Supreme Administrative Court by the notifying party or the FCCA.

The notifying party cannot appeal a decision approving the concentration without commitments (eg, for the reason that the concentration was not notifiable due to jurisdictional issues) as, according to Market Court case law (MAO:115/I/02), the notifying party lacks the need for legal protection in such situations.

Do third parties have a right of appeal?

Third parties have the right to appeal a decision approving the concentration only if they are considered to be directly affected by the decision in the sense specified in the Administrative Judicial Procedure Act. In practice, however, third parties in a merger control case have never been considered to be in such a position. As the Market Court can prohibit a concentration only based on the FCCA's proposal, an appealing third party cannot have a concentration prohibited. Therefore, the only effect that an appeal could have is the removal of either a single commitment or the whole remedies package.

Time limit

What is the time limit for any appeal?

An appeal from a FCCA decision must be submitted to the courts within 30 days of notification of the decision, and subsequent appeals to the Supreme Administrative Court must also be submitted within 30 days of receiving notification of the court’s decision. However, the reasoning of the appeal may be amended at a later stage and there is no preclusion in the administrative procedure.