Innocent Until Proven Guilty, Even in Competition Cases

On 30 March 2016, the Market Court issued a decision on cooperation between competitors in power line design and construction contracts in 2004–2011. The Market Court dismissed the Finnish Competition and Consumer Authority’s (the FCCA) 35 million euro fine proposal as being time-barred.

The case concerned alleged cooperation between Finland’s two largest power line companies, Eltel Networks Oy and Empower Oy. The FCCA deemed that the companies had agreed on prices and profit margins and divided contracts for upcoming power line projects in 2004–2011. Ultimately, the Market Court did not rule on whether Eltel had violated competition law, but dismissed the FCCA’s fine proposal due to insufficient evidence. Empower had been granted immunity from fines because it had revealed the cooperation to the FCCA.

The case was tried under the old Act on Competition Restrictions, which provided that a competition violation would become time-barred five years after the end of the restriction or of when the FCCA became aware of the restriction.[1] The FCCA made the fine proposal on 31 October 2014, so it would have needed to prove that the cartel had continued after 31 October 2009. The Market Court found that the FCCA had not provided sufficient evidence of this.

The FCCA’s Burden of Proof

The Market Court’s decision confirmed that the FCCA has a high burden of proof in competition cases. The FCCA must present accurate and consistent evidence on alleged restrictions based on which the Market Court can be certain that a violation existed. The Market Court cannot decide a case against suspected company unless it is convinced of the violation’s existence. The burden of proof is not met if the company suspected of a violation can provide a credible alternate explanation for the facts presented by the competition authority.

‘A court must always decide a matter to the benefit of a suspected company when it is uncertain of the actual course of events. This is the principle of the presumption of innocence, which has been confirmed in the EU Charter of Fundamental Rights and the EU’s established case law.’

Insufficient Evidence and Breach of Company’s Defence Rights

According to the Market Court, the FCCA had not sufficiently proven that the cooperation between the companies had continued after the meetings in 2004–2006 and the few telephone calls in 2007. The FCCA had sought to prove that the cooperation had continued thereafter, among other things, through:

The Market Court deemed that the FCCA only presented unspecific evidence to support its claims. For this reason, the Market Court deemed that the FCCA had not proven that the effects of the cooperation would have continued at least until 31 October 2009 and dismissed the proposed fine as being time-barred.

In addition, the Market Court deemed that the FCCA’s actions were blameworthy, because it did not hear Eltel concerning all of the FCCA’s allegations, facts and reasoning before making the fine proposal. Consequently, the FCCA was ordered to compensate a proportion of Eltel’s legal costs.

Protecting Company’s Defence Rights

The Market Court’s decision emphasises the investigation obligation of the authorities, and the outcome of the case is positive from the perspective of due process. In practice, the decision means that the FCCA must pay more attention to the sufficiency and specificity of evidence in cases where it is making a fine proposal to the Market Court. In addition, the FCCA needs to focus on ensuring that the companies’ defence rights are realised already during the authority proceedings.