Here’s our roundup of the most interesting competition law developments in the Nordic countries in 2017.
- Sweden: In 2017, there was a total of around 80 merger notifications to the Swedish Competition Authority (about a 7.5% increase on 2016). During the same period, there were three Phase 2 decisions, all clearances with no commitments, namely Arla / Gefleortens mejeri (dairy sector); Ahlsell / Viacon (water and sewage sector); and Nibe / Enertech (heat pumps sector, filed in 2016 but cleared in early 2017).
- Denmark: In 2017, there was a total of around 45 merger notifications to the Danish Competition and Consumer Authority. Eight of these were notified under the standard procedure, while the rest was notified under the simplified procedure. All merger notifications were approved, though 2017 was the year when JP/Politiken withdrew its notification of its acquisition of the rival newspaper Børsen (a Danish financial time’s newspaper). According to media reports, the Consumer and Competition Authority was on the road to a prohibition. JP/Politiken decided to change strategy and acquired a minority stake (49 %) Børsen. The most significant Danish merger case, however, was the Metro case concerning a fine for Metro not to submit correct information to the Danish Competition and Consumer Authority. In April, Metro was sentenced by the Danish District court to pay a fine of DKK 50,000 (app. EUR 6,700) for submitting incomplete information. The fine was confirmed in November by the Eastern High Court.
- In Denmark, a merger between two hardware stores got some attention. The transaction was approved following remedies offered by the parties. The interesting part was that the remedies were behavioral. In order to have the transaction approved, the parties agreed to divide the target into two business. The buyer was allowed to take over one of the businesses, while the other part was continued as a new business by the seller. The seller also agreed to ensure the opening of new stores. Thus, the remedies were in fact aimed at the seller and not the buyer.
- Finland: In 2017, there was a total of around 31 merger notifications to the Finnish Competition and Consumer Authority (one is still pending: Eurofins Product Testing Lux Holding SARL / VTT Expert Services Oy / Labtium Oy). During the same period, there were five Phase 2 decisions, namely YIT / Lemminkäinen (cleared unconditionally in January 2018); Scandic Hotels / Restel Hotellit (cleared with commitments); Attendo Intressenter / Mi-Hoiva (cleared unconditionally); Yamaha Motor Europe N.V. and Inhan Tehtaat / part of Konekesko’s motor boat production and sales operations (cleared unconditionally); and Suomen Osuuskauppojen Keskuskunta, HOK-Elanto Liiketoiminta, Pirkanmaan Osuuskauppa, Turun Osuuskauppa and Meira Nova / Stockmann: Delicatessen (cleared with commitments).
- Norway: The Norwegian Competition Authority got 99 filings, but apparently not 99 problems, as few of them went to Phase 2. However, they were all cleared unconditionally with one exception: a joint venture combining terminal operations from Greencarrier Shipping & Logistics AS, DFDS Logistics AS and Seafront Group AS was abandoned in January 2018 in the face of opposition from the authority. In addition, a merger filed in 2016 between two specialized shipping companies involved in the transportation of frozen fish (Eimskip Norway AS / Nor Lines AS) was blocked in 2017. Among the Phase 2 clearances, a telecoms merger was noteworthy (see this post).
Cartels and co-operation
- Non-compete clauses: The Swedish Competition Authority’s appeal was rejected in the case involving international removal firms that had agreed five-year non-compete clauses in the context of two transactions. The two and three year periods set out in the EC’s Notice on Ancillary Restraints were interpreted by the court of appeal to be safe harbours not upper limits beyond which such clauses could be seen as infringements by object.
- Joint bidding: More successful was the appeal by healthcare firms, previously fined around EUR 3m for joint bidding strategies in response to a public tender (see this post). The Swedish Competition Authority had argued that the sub-contracting arrangements in focus were restrictions by object but, after initial success at first instance, this was rejected on appeal and the parties ultimately cleared of wrongdoing.
- More joint bidding: In Norway, local taxi cooperatives Ski Taxi and Follo Taxi had no success in their appeal to the Supreme Court. The court held that joint bidding is anticompetitive by object if the parties could instead have submitted separate bids (see this post). Emboldened by the judgment, the Norwegian Competition Authority concluded its investigation against five electrical installation firms belonging to the El-Proffen chain for cooperating openly on bids in a public procurement process. The five firms and the El-Proffen chain were fined NOK 18m (EUR 2m) in total.
- Price coordination: In Denmark, 2016 ended with the final matter in the matter known as the Danish construction cartel, the final undertaking being the leniency applicant; hence, getting immunity. Several construction undertakings had shared prices before submitting offers in various tender proceedings. Most of them were fined. In 2017, another investigation of the construction sector was initiated. According to media coverage the investigation also concerns alleged price coordination. More to follow on the blog regarding this investigation in 2018.
- Mutual standards within the construction sector: The Danish Competition and Consumer Authority rendered a decision stating that two undertakings manufacturing roofing products had infringed the competition act by agreeing on a mutual standard, which prevented other players from entering the market. The matter is expected to be reported to the Danish State Prosecutor in order for the prosecutor to seek criminal sanctions.
- Trade associations: In December 2017, the Finnish Market Court fined several operators in the coach sector for anticompetitive behaviour within the Finnish Bus Association. The case relates to the major legislative change that entered into force on 3 December 2009. The reform meant that the old exclusivity system of the Finnish public transportation act was abolished and markets were partly opened for competition. According to the Market Court, certain members of the Bus Association infringed competition law by seeking to prevent new competitors from entering the market e.g. by preventing competitors’ access to Oy Matkahuolto Ab’s timetable, ticket and parcel services. The Finnish Competition and Consumer Authority (FCCA) had proposed penalty payments of EUR 38m in total. The Market Court, however, dismissed significant parts of the FCCA’s proposal and reduced the fine to EUR 100 000 (in total EUR 1.1m) for each of the participants. The matter has been appealed to the Finnish Supreme Administrative Court.
- Boycott: Four Norwegian publishing houses were fined NOK 32m (EUR 3.3m) in total for an alleged boycott of a distributor. Some of the publishers have taken legal action before Oslo city court to overturn the Norwegian Competition Authority’s decision.
- Swedish Match: In Sweden, a fine of around EUR 4m was imposed on tobacco firm Swedish Match in early 2017 for an abuse of dominance obliging its snus retailers to put generic labels on rival products displayed in store refrigerators. This has been appealed and a hearing is expected to begin in May 2018.
- Nasdaq: Although not news from 2017, the Nasdaq case ruled on in January 2018 is worthy of note here (blog post to follow)! The Swedish court rejected the argument of the Swedish Competition Authority that Nasdaq had abused a dominant position on the stock exchange by seeking to prevent direct access of a new entrant to a data centre. The authority has said it will appeal the judgment.
- Post Denmark has been a returning party within Danish cases on abusing a dominant position. This was also the case in 2017, though the matter regarded an infringement concerning 2007-2009. In 2007 Post Denmark had introduced a rebate scheme, which resulted in customers being inspired to buy all or nearly all of their distribution from Post Denmark. Post Denmark changed the scheme in 2010, but the 2007-2009 scheme was investigated by the Danish Competition and Consumer Authority. Following among other cases the Intel case, the Danish Competition and Consumer Authority ruled in May 2017 that Post Denmark did abuse a dominant position as the rebate scheme resulted in barriers to enter the market as customers were tied to Post Denmark.
- Yarps / Telia: An abuse of dominance damages claim by internet provider Yarps against telecoms company Telia was rejected on appeal in Sweden. Following on from earlier enforcement action by the Swedish Competition Authority, Yarps had been awarded around EUR 6.68m in damages in 2016. However, this was overturned in June 2017 on the basis that Yarps had not proven that Telia’s conduct had anti-competitive effects on the market. This has been appealed.
- Tele2 / Telia: Similar to the Yarps case from earlier in the year (see above), Tele2’s damages claim against Telia was overturned on appeal in December 2017. Previously awarded EUR 24m in 2016, the court now ruled that Tele2 had failed to establish causation. More than fifteen years after initial action by the Swedish Competition Authority, these Telia margin squeeze cases roll on, this latest twist providing little likely to boost future private actions of this sort. The impact of the implementation in Sweden of the EU Damages Directive in December 2016 remains to be seen.
- SOS Dansk Autohjælp A/S: This was a civil court case in Denmark concerning a non-compete clause. The clause was overruled by the Danish Maritime and Commercial court as the court decided the clause would restrict competition. SOS Dansk Autohjælp A/S is a road assisting business, which is organized as a kind of a franchise. SOS International had included a provision stating that participants could not compete with SOS International for a period of 6 months following a termination of the franchise agreement. The court ruled that such a clause constituted an infringement of the Danish Competition Act as it limited competition by ruling out a potential new player in the market. In the view of the court the provision had a significant impact on competition; thus, could not be enforced.
- Raw Wood Case: The Helsinki District Court dismissed follow-on damages claims by hundreds of municipalities and private forest owners against Metsäliitto Cooperative, Stora Enso and UPM-Kymmene. The District Court had already earlier dismissed a claim by Metsähallitus in 2016. The Metsähallitus part of the raw wood follow-on saga is still pending before the Helsinki Court of Appeals.
- Asphalt Case: There are also still pending follow-on damages cases related to the asphalt case but some new judgements were also handed down in 2017. The most important development is that the Finnish Supreme Court decided to grant a limited leave to appeal to two parties. It subsequently decided to seek a preliminary ruling from the ECJ to ascertain e.g. the extent to which successor liability, as it exists under EU competition law, should be applied when determining liability for damages. It will be interesting to see how the ECJ will rule on the case as it may potentially have an impact on the private enforcement regimes throughout the EU.
Procedure & other
- New merger rules in Sweden: During 2017, the Swedish Competition Act was amended to give the Swedish Competition Authority the power to make its own decisions to prohibit mergers (without the need to take such cases to court, as had previously been the case), see this post. These changes came into force on 1 January 2018.
- New Director General in Sweden: In September 2017, Rikard Jermsten took up his post as the new Director General for the Swedish Competition Authority, replacing Dan Sjöblom who moved to the Swedish Post and Telecom Authority, see this post.
- Swedish investigation into insurance industry: Dawn raids in April and June 2017 were followed by an interesting appeal from one of the targeted companies on the right of the Swedish Competition Authority to copy and seize electronic data during such inspections (leading to judgments in October and November). The fact that investigatory steps during a raid are not considered to be appealable decisions was argued to be inconsistent with fundamental rights as set out in the ECHR and EU Charter. Appealed all the way to the Swedish Supreme Court in December, a final outcome is now awaited.
- Ombudsman decision: In July, the Swedish Ombudsman issued a decision criticising the handling by the Swedish Competition Authority of the now closed investigation into abuse of dominance by Novamedia (operator of the Swedish Postcode Lottery). Of note was the censure surrounding the duration of the investigative phase itself, the most lengthy on abuse to date (having been opened in spring 2013 and closed in late 2017, see below on ‘case closures’).
- Resale price maintenance: In Denmark, 2016 ended with a resale price maintenance case slamming a fine on a small furniture business dealing furniture at wholesale level. Canett was fined DKK 600,000 (app. EUR 80,000). 2017 also included a resale price maintenance case. In April 2017, Olympus accepted a fine of DKK 3.6m (almost EUR 500,000) for resale price maintenance. Olympus acknowledged to have instructed its dealer in a way that constituted resale price maintenance for two yours ending the practice in November 2013.
- New guidelines: In Denmark, the Danish Competition and Consumer Authority published new draft guidelines for consortia agreements in June 2017. The final guidelines were expected to be published later in 2017. Yet, the final guidelines have not yet been published. The draft was heavily criticised by lawyers and businesses as the guidelines appeared to be too strict. The discussions on consortia agreements will remain a hot topic in Danish competition law in 2018. The Danish Competition and Consumer Authority also issued guidelines on acquisition of minority stakes. The guidelines focus on the risk of spill over problems when competitors own parts of their competitors.
- Nordic NCAs cooperation agreement: On September 2017, Finland joined the new Nordic competition authorities’ cross-border co-operation agreement. Although Finland joined for the first time, the agreement also replaces the previous agreement between Denmark, Norway, Iceland and Sweden. The new arrangement changes the co-operation between the competition authorities in the entire Nordic region and co-operation powers partly extend beyond the principles laid down for the ECN-framework (see this post).
- New competition appeals board: Norway set up a new appeals board to rule on appeals over decisions taken by the Norwegian Competition Authority.
- Swedish case closures: Quite a number of cases were closed by the Swedish Competition Authority during 2017, for example investigations involving the porcelain sector (closed in March, although a related investigation is still ongoing), the dairy sector (closed in May), online car advertising (closed in June), the locksmith services market (started in 2013 and closed in November), the lottery sector (started in 2013 and closed in November), catering equipment (closed in December) and a building-related sector (closed in December). Several significant closures involving long-running investigations occurred after the new Director General took office, although it would be pure speculation to make any connection (albeit tempting to do so)!
- Finland case closures: The Finnish Competition and Consumer authority closed many long-running cases in 2017. For example, investigations concerning Finnish music copyright CMO (closed in December), Cash ATM’s (closed in June with commitments), road logistics (closed in November), railways (closed in October) and energy industry (closed in May) were closed during 2017.
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