15/03/2017

Amendment of Competition Act Continues

The working group preparing the amendments of the Competition Act published its report on 14 March 2017.

The working group has completed its assessment of the current state of the Competition Act and has proposed changes, particularly to authority inspections and the penalty system.

In its report, the working group proposes that the Finnish Competition and Consumer Authority (FCCA) should have the right to continue inspecting electronic material in its own offices when carrying out inspections. The working group also proposes that an express provision be added to the Competition Act stating that the FCCA's right of access would not be dependent on the storage medium, because material relevant to inspections is often stored in a variety of mobile devices.

The report also proposes improvements to the protection of privileged communications between companies and their outside legal counsel. This would be achieved through a new procedure for disputed situations in which the documents would be handed over for review by an official independent of the supervision of the Competition Act. This official would decide whether a document is privileged communication with legal counsel. According to the proposal, this decision would not be open to appeal independently of the main matter.

The working group would expand the powers of the FCCA in connection with inspections outside of the company's business premises (i.e. home inspections). In the future, the FCCA would be allowed to request information on facts and documents and store the answers it receives in connection with these kinds of inspections. 

With respect to the amounts of penalty payments imposed on industry associations, the working group proposes that, in the event a violation committed by an association relates to the behaviour of its members, the penalty payment could be a maximum of ten per cent of the sum of the turnovers of the association and its ten largest members involved in the behaviour in question.

According to the working group's proposal, a competition infringement could also lead to 'structural remedies' being imposed. This would usually involve obligating the company to divest certain assets.  These kinds of structural remedies would be imposed by the Market Court based on the proposal of the FCCA. 

The report also proposes that the law allow penalty payments to be imposed if certain of the Competition Act's procedural rules are violated. A penalty payment could be imposed, for example, if a company were to provide false information when responding to the FCCA or were to refuse to comply with an inspection. The penalty payment would be imposed by the Market Court based on the proposal of the FCCA.

The working group has also made proposals relating to, among other things, the exchange of information between authorities, the prioritisation and inadmissibility of cases, the procedural deadlines for merger control as well as the supervision of competition neutrality.

The working group did not provide proposals for provisions for all of the matters it discussed, and the report is not unanimous. In particular, the representatives of industry and commerce submitted critical observations in the minority reports and supplementary statements attached to the report.

The report is open for comments until 15 May 2017.  The next stage in the reform is to draft a government bill.

The working group already published an interim report on 2 May 2016 concerning its other task. In the interim report, the working group assessed the need to reform the Competition Act due to a government programme concerning the profitability of Finnish food production. 

Read the full working group report of 14 March 2017 in Finnish.

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