Competition (Finland): Finnish Supreme Administrative Court imposes EUR 70 million fine on Valio for predatory milk pricing

On 29 December 2016, the Finnish Supreme Administrative Court ("SAC") upheld the Market Court's ruling stating that Valio Oy ("Valio") had violated competition law and must pay a a fine of EUR 70 million. In 2012 the Finnish Competition and Consumer Authority ("FCCA") found Valio guilty of predatory pricing on the Finnish fresh milk market. The FCCA proposed that the Finnish Market Court ("Market Court") impose a fine of EUR 70 million on Valio. The FCCA's investigation showed that Valio's top management made a strategic decision intended to foreclose competition on the Finnish fresh milk market by dropping the wholesale prices of its fresh milk considerably below costs. The purpose of underpricing was to achieve a position close to a monopoly in the market and thereafter to raise the prices back to the level that existed before its main competitor, Arla, had entered the market. In 2014 the Finnish Market Court agreed with the FCCA and ruled that Valio's conduct was in breach of competition law and imposed the proposed EUR 70 million fine on Valio.

The SAC, as the final appellate instance, upheld the Market Court's decision, including the fine. Further, the SAC noted that Valio's competition violation was serious and significant, and that it had lasted for almost three years ending only in the FCCA's cease and desist order in 2012. The fine imposed on Valio is the highest fine for competition law violations imposed on an individual company in Finland.

Source: Finnish Competition and Consumer Authority Press Release, Supreme Administrative Court Press Release (in Finnish) and Supreme Administrative Court decision, KHO 2016:221, 29/12/2016 (in Finnish) Back to top

Competition (Finland): Lemminkäinen requests leave to appeal to the Supreme Court in the asphalt cartel damages case

On 19 December 2016, Lemminkäinen Corporation ("Lemminkäinen") has requested leave to appeal certain Helsinki Court of Appeal decisions ("decisions") regarding damages related to the Finnish asphalt cartel to the Finnish Supreme Court. The damage claims relate to a 2004 infringement decision by the Finnish Competition and Consumer authority ("FCCA") and the subsequent Supreme Administrative Court ("SAC") decision of 2009, where the SAC imposed a total fine of approximately EUR 83 million on Lemminkäinen, VLT Trading Oy (former Valtatie Oy), NCC Roads Oy, Skanska Asfaltti Oy, SA-Capital Oy, Rudus Asfaltti Oy and Super Asfaltti Oy.

Lemminkäinen's request for leave to appeal concerns the decisions regarding the State's claim and those 13 municipalities' claims, where the claimants' claims were partly accepted and where Lemminkäinen did not reach a settlement with the claimants after the decisions. According to Lemminkäinen, there are certain aspects such as the State's liability and value added tax where the conclusions of the Helsinki Court of Appeal differ from previous case law or where there is no established case law.

Source: Lemminkäinen Corporation Stock Exchange Press Release, 19/12/2016 Back to top

Competition (Sweden): PostNord's quantity discounts are not discriminatory according to Stockholm Administrative Court of Appeal

On 28 December 2016, the Stockholm Administrative Court of Appeal (the "Administrative Court of Appeal ") rejected the Swedish Post and Telecom Authority's ("PTS") claim that new quantity discounts proposed by PostNord Group AB ("PostNord"), the universal postal service provider in Sweden, are discriminatory. By doing so, it repealed a decision by PTS to prohibit PostNord from applying the new quantity discounts. PostNord had decided to change the conditions for receiving quantity discounts starting 1 January 2016. Previously, the discounts were calculated based on the total volume of postal items from all senders. According to the new conditions, the discounts would instead be calculated per sender. Such conditions would affect the amount of discounts given to intermediaries that consolidate postal items from a number of senders, so-called consolidators.

Quantity discounts per sender have previously been considered by the Court of Justice of the European Union ("CJEU") in 2015 in Case C-340/13, bpost SA v. Institut belge des services postaux et des télécommunications (IBPT) (the "bpost case"). In the bpost case, IBPT claimed that quantity discounts applied by bpost, which were calculated per sender, discriminated against consolidators because larger senders could obtain greater discounts than consolidators. However, the CJEU concluded that the quantity discounts were not discriminatory because larger senders and consolidators were not in comparable situations regarding the objective pursued by the system of quantity discounts per sender, which was to stimulate demand in the area of postal services.

PTS argued that the main objective with PostNord's new quantity discounts were to make customers chose PostNord as a service provider. However, the Administrative Court of Appeal concluded that PostNord's proposed discounts may have many objectives, but that the bpost case establishes that quantity discounts have the objective to stimulate demand for postal services. The CJEU did not consider that different conditions for competition can exist in different markets within the European Union. Therefore, the fact that there are a number of competing postal service providers on the Swedish market did not affect the applicability of the bpost case. Thus, the Administrative Court of Appeal found that senders and consolidators on the Swedish postal market was not in comparable situations and that the new system of quantity discounts per sender was not discriminatory.

Source: Administrative Court of Appeal in Stockholm Judgment 28/12/2016 (in Swedish) Back to top

Competition (Sweden): Swedish Competition Authority publishes report on state alcohol retail monopoly

On 29 December 2016, the Swedish Competition Authority ("SCA") released its second report for 2016 on the state alcohol retail monopoly. The SCA must submit such reports twice a year to the Commission, due to obligations incumbent on Sweden after joining the European Union in 1995 to retain the state monopoly of Systembolaget AB ("Systembolaget"). Systembolaget is a state-owned company that runs a network of retail shops selling spirits, liquors and beverages with an alcohol content above a certain limit. The purpose of the reports is to clarify for the Commission whether the state monopoly discriminates between domestic and imported products and thereby impedes competition. The state monopoly is considered to be non-discriminatory if the distribution and sales terms for alcoholic beverages are objective, transparent and objectively applied.

In the second report for 2016, the SCA reports Systembolaget's planned change to lightweight bottles, its modified price model and a proposed legislation concerning private individuals' e-commerce with alcohol.

Source: Swedish Competition Authority Press Release 29/12/2016 (in Swedish) and Swedish Competition Authority Report 29/12/2016 (in Swedish) Back to top

Competition (Sweden): Competition Damages Act enters into force

On 27 December 2016, the Competition Damages Act (Sw. konkurrensskadelagen) entered into force in Sweden. The act implements Directive 2014/104/EU on certain rules governing actions for damages under national law for infringements of the competition law provisions of Member States and of the European Union.

Source: Swedish Competition Authority Press Release 27/12/2016 (in Swedish) Back to top

Public procurement (Finland and Sweden): New public procurement acts enter into force

On 1 January 2017, new public procurement acts entered into force in both Finland and Sweden. The acts implement the European Union's public procurement directives: directive 2014/24/EU on public procurement (the new "Classical Directive"), directive 2014/25/EU on procurement by entities operating in the water, energy, transport and postal services sectors (the new "Sector Directive"), and directive 2014/23/EU on the award of concession contracts . Moreover, the Finnish Competition and Consumer Authority ("FCCA") has been newly tasked with the supervision of the legality of public procurement in Finland focusing primarily on illegal direct procurement and other corresponding procurements conducted in a blatantly erroneous or discriminatory manner.

Source: Finnish Competition and Consumer Authority Press Release 30/12/2016 and Swedish Competition Authority Press Release 2/1/2017 Back to top