Thursday, 29 January 2009

Finland: Competition proposal published

A working group has prepared a reformed Act on Competition Restrictions for the Ministry of Employment and the Economy of Finland. The report is in Finnish, but there is a press release and abstract in Swedish and an abstract in English. Here is the available English text:

On 13 June 2007, the Ministry of Trade and Industry appointed a working group to identify the need to reform the Act on Competition Restrictions and to prepare proposals for the required amendments.

The Government Programme of Prime Minister Matti Vanhanen’s second Cabinet states that the Government will assess the need to amend the Act on Competition Restrictions and implement the necessary changes. According to the appointment letter of the working group, an effective competition policy requires the availability of functioning and up-to-date tools for addressing harmful restraints on competition.

The current Act on Competition Restrictions (480/1992) entered into force on 1 September 1992 and has, subsequently, seen many amendments. In the main, the regulations in force can be considered functional, but the high number of amendments has weakened the systematic structure of the Act. Reform needs also pertain to the content-related regulations, resulting from experiences gained from applying the Act, the development of Community legislation, and changes in the competitive operating environment.

The aim of the Competition Act is to ensure healthy and well-functioning competition, the key goal being to secure a well-functioning competition mechanism. Such an operating environment would serve companies and benefit customers and consumers alike. As concerns the objectives of the Act, it is essential that the Finnish Competition Authority is able to handle matters with sufficient speed and efficiency.

The working group has examined the needs related to developing regulations pertaining to the procedure followed in competition restriction issues. In this respect, the goal is to achieve a balance between efficiency and the legal protection of enterprises. More rapid processing, regulation of the publicising of documents, and development of the Competition Authority’s powers of investigation have emerged as key development targets.

Separate regulations concerning enterprises’ rights to defend themselves would also be introduced into the Act. Moreover, it is proposed that the so called leniency system concerning discharge from fines from infringements, and the mitigation of the fine, should be made more predictable than at present.

The competition infringement sanction system has been assessed from the viewpoints of an administrative infringement fine, the penal system and the application of a business prohibition. In the working group’s opinion, the competition infringement sanction system should continue to be based on an administrative infringement fine.

However, it is proposed that the regulations pertaining to the infringement fine be developed so that the pre-emptive nature and foreseeability of sanctions be implemented more effectively than at present. The working group does not propose the criminalisation of activities contrary to the Act on Competition Restrictions nor the establishment of a separate business prohibition system for matters related to competition restriction.

The regulations in force concerning merger control have proven to be well-functioning in the main. Correspondingly, a significant proportion of the working group’s proposals clarify and update the current regulations. However, the working group also proposes certain reforms of the Act, such as modifying the test used in the assessment of mergers and acquisitions, the elimination of the deadline set for compulsory notification, and the possibility to extend processing time limits.

The regulations in the Competition Act concerning the claiming of damages would remain based on the principles of the Act in force. Here, the aim is to eliminate defects related to the current provisions, clarify the regulations concerning compensation for damage, and enhance legal certainty.

Source: Ministry of Employment and the Economy Julkaisut: Kilpailulaki 2010 (29 January 2009)


When Minister Tarja Cronberg received the report, she emphasised the need for competition policy in the present economic situation. Cronberg welcomed the working group’s clear line against the profitability of cartels.

Source: Ministry of Employment and the Economy press release: Työryhmä esittää: Uusi laki tehostamaan kilpailuvalvontaa (29 January 2009)

The press release in Swedish: Arbetsgruppens förslag: Effektivisering av konkurrensövervakningen genom en ny lag

Ralf Grahn