Merger control

In small markets like Finland, ensuring a competitive environment requires effective merger control. On the proposal of the Finnish Competition and Consumer Authority (FCCA), the Market Court may prohibit a concentration or attach conditions on its implementation, if the concentration may significantly impede effective competition in the Finnish markets or a substantial part thereof, in particular as a result of the creation or strengthening of a dominant position (so-called SIEC test that is also used in the EU).

Concentrations exceeding national turnover thresholds must be notified to the FCCA. If the deal falls within the scope of the Council Regulation (EC) No 139/2004 on the control of concentrations between undertakings, it must be notified to the European Commission, who has exclusive competence to review concentrations with a Community dimension.

However, the Commission and the competition authorities of EU countries have a system for the referral of cases. In the system, concentrations that meet certain criteria can be referred to another authority. A concentration cannot be implemented before the relevant competition authority has issued a decision on the matter.

Competition neutrality

The competition neutrality provisions of the Competition Act ensure equal competitive conditions for public and private sector business activities. State- or municipality-owned undertakings operating in the same market as private enterprises may sometimes disturb the effectiveness of the market and the existence of equal operating conditions.

At its most extreme, the lack of neutrality may lead to undertakings being excluded from the market. On the other hand, many sectors have also been opened up to competition enabling private enterprises to produce services that have traditionally fallen under the responsibility of public sector operators. Neutrality issues may also concern exclusive and special rights granted by public bodies.

Under the Competition Act, the Finnish Competition and Consumer Authority (FCCA) has the authority to intervene in the provision of goods and services in public sector business activities carried out by the State, municipalities, joint municipal authorities or entities under their authority, if the operating models or operating structures prevent or distort competition in the market.

Such models may involve, for instance, prices that do not reflect costs. A prohibited structure could mean operating in government agency form. The primary form of intervention in neutrality issues is negotiations on corrective measures. As a last resort, the FCCA may impose prohibitions, obligations and orders.

Competition neutrality may be compromised for example if the State or a municipality is engaged in economic activities within the meaning of EU law using an organisational form that gives the operator bankruptcy protection or tax benefits to which private operators are not entitled. The Local Government Act already imposes an obligation to convert such activities into a separate company:

Further information: virve.haapajarvi(at)tem.fi