22 July 2020

A majority of all the decisions where the EU antitrust rules are being applied are taken by national competition authorities. The European Commission, therefore, considers it essential that national competition authorities have all the powers they need to apply the EU antitrust rules effectively. Directive (EU) 2019/1 (the so-called “ECN+ Directive”) aims at empowering the national competition authorities of the EU Member States to be more effective enforcers and to ensure the proper functioning on the internal market.

More specifically, the purpose of the ECN+ Directive is to ensure that when applying the same legal basis, i.e. the the EU antitrust rules, national competition authorities have the appropriate enforcement tools in order to bring about a genuine common competition enforcement area. To that end, the ECN+ Directive provides for minimum guarantees and standards to empower national competition authorities to reach their full potential.

In Finland, the Ministry of Economic Affairs and Employment (the “MEAE”) recently published its report regarding the national implementation of the ECN+ Directive. In its report, the MEAE proposes several changes to the Finnish Competition Act. The below non-exhaustive summary discusses certain interesting changes proposed by the MEAE, including imposition of structural remedies to end competition infringements, detailed provisions on the setting of competition infringement fines and enhanced cooperation between national competition authorities in the EU.

Structural remedies:

The changes would enable competition authorities to impose structural remedies to bring a competition infringement effectively to an end. Structural remedies would include, for example, the obligation for an undertaking to divest a business unit or share capital in a competing undertaking. In Finland, the Market Court would have the power to impose structural remedies on the proposal of the Finnish Competition and Consumer Authority (the “FCCA”).

Competition infringement fines:

The MEAE also proposes the introduction of detailed provisions regarding the setting of the amount of competition infringement fines. The purpose of the new provisions is to provide undertakings with a possibility to assess the amount of a potential competition infringement fine in advance. A fine would consist of two parts: (i) the basic amount of the fine and (ii) adjustments to the basic amount of the fine. The basic amount of the fine would consist of a percentage-based amount up to 30% of the turnover attributable to the goods or services related to the competition infringement for the last year of the infringement. The basic amount of the fine would be assessed based on the infringement, whereas the adjustments would be determined based on the conduct of each undertaking participating in the infringement. The proposed new provisions would broadly correspond to the guidelines applied by the European Commission.

A competition infringement fine could also be imposed as a result of a violation of certain procedural rules of the Finnish Competition Act, e.g. by refusing to grant access to the undertaking’s premises in connection with a dawn raid. In addition, a fine could be imposed on an undertaking which submits false, inadequate or misleading information to the FCCA, upon its request, to investigate a restraint on competition. The fine for a violation of the procedural rules could amount to 1% of the global turnover of the undertaking violating the rules.

One of the most significant changes concern the fines that may be imposed on industry associations. According to the proposal, the combined turnover of the undertakings that are members of the associations would be taken into account when determining the amount of the fine. Moreover, where the industry association is unable to pay the fine, the FCCA would be entitled to require payment of the fine directly by any of the undertakings who were members of the decision-making bodies of the industry association at the time of making the decision on the competition infringement. Secondarily, the FCCA would have the right to require payment from any of the members of the association, which were active on the market on which the infringement occurred. However, the fine in respect of the infringement in question could not exceed 10% of an undertaking’s total annual global turnover. In addition, no payment could be requested from an undertaking which demonstrates that it did not implement the infringing decision, and either was not aware of it or actively distanced itself from it prior to the FCCA’s investigation. The proposed amendment significantly increases the potential liability of undertakings that are members of industry associations and highlights the need for competition compliance monitoring in this respect.

Enhanced cooperation between national competition authorities:

The proposed changes would also increase cooperation between national competition authorities within the EU. For example, the FCCA would be granted a right under certain circumstances to carry out inspections at the request of competition authorities of other EU Member States. Moreover, officials of national competition authorities of other EU Member States could be permitted to attend and actively assist the FCCA’s officials in an inspection conducted by the FCCA.

The amendments are proposed to enter into force on 4 February 2021, which is the due date for the national implementation of the ECN+ Directive.

By Lotta Pohjanpalo and Matti Siiteri

Waselius & Wist

Helsinki, Finland