Competition legislation
The Competition Act and EU competition rules prohibit competition restraints which are generally considered to have harmful effects on sound and effective economic competition (prohibition principle). Such prohibited restraints include
- the abuse of dominant position
- mutual agreements and practices between competing undertakings to limit competition (cartels).
The substantive provisions of the Competition Act correspond to those included in Articles 101 and 102 of the Treaty on the Functioning of the European Union (TFEU). Unlike EU legislation, the Finnish Competition Act also includes provisions on competition neutrality and a provision on dominant position in the grocery trade market. The EU competition rules are applied when an arrangement affects the trade between EU Member States. The Competition Act applies when no such effect on trade exists.
Under the Competition Act, the authorities can intervene in activities that restrict competition in Finland or affect Finnish customers. The Competition Act enables the Finnish Competition and Consumer Authority (FCCA) to prioritise its tasks and focus its resources on the most significant competition issues.
Dominant position in grocery trade
According to the Competition Act, an operator holds a dominant position in the grocery trade market if its market share in the Finnish retail trade of groceries exceeds 30 per cent. The grocery trade market refers to both retail and procurement markets. Enterprises holding a market share exceeding the threshold have to comply with the prohibition of the abuse of dominant position. The provision has no effect on the criteria for the abuse of dominant position.
Dominant position and mutual agreements between undertakings
Both the Competition Act and Article 102 of the TFEU prohibit the abuse of dominant position. The abuse may concern for example pricing, as in the case of excessive pricing, price squeezes, predatory pricing or price discrimination. Other forms of abuse include refusal to supply, tying, and exclusive sales or purchasing agreements.
The Competition Act and Article 101 of the TFEU also allow for intervention in agreements and practices that limit competition between undertakings operating at the same level of the production or distribution chain, i.e. competitors. Such practices include price-fixing and bidding cartels (collusive bidding), sharing markets and sources of supply, and limiting production.
The Competition Act and Article 101 of the TFEU also enable authorities to intervene in supply and distribution agreements between undertakings operating at different levels of the production or distribution chain if they involve restrictions on competition. These may include, for example, single branding (non-compete obligation), exclusive distribution, customer allocation, selective distribution, exclusive supply obligation, tying and recommended resale prices.
The Competition Act and EU competition legislation also include provisions on merger control.
The Competition Act entered into force on 1 November 2011
Since then, it has been amended a few times. The provisions on competition neutrality entered into force at the beginning of September 2013, and the section on dominant position in the grocery trade market entered into force at the beginning of 2014.
In the Competition Act, new provisions have also been added to the section on inspections. An amendment that entered into force at the beginning of March 2015 clarified the Finnish Competition and Consumer Authority's (FCCA) right to carry out inspections as part of enforcing the Competition Act when an undertaking has outsourced its information management activities to an external service provider.
The Ministry of Economic Affairs and Employment set up a working group on the reform of the Competition Act. Its mandate ran from 1 September 2015 to 28 February 2017.
Further information: virve.haapajarvi(at)gov.fi and iiro.ihanamaki(at)gov.fi