Amendments to the Finnish Competition Act and public procurement rules
Amendments to both the Finnish Competition Act and the rules concerning public procurement in Finland recently came into force. This article aims to provide a comprehensive overview of the most relevant changes and their significance.
The amended Competition Act provides the FCCA with further procedural and enforcement tools
The changes to the Competition Act came into force on 24 June 2021, extending the enforcement powers of the Finnish Competition and Consumer Authority (FCCA). One of the main drivers of the amendments has been the implementation of the so-called ECN+ Directive, which aims to enhance and harmonize the application of the EU competition rules at Member State level.
The amendments apply, for example, to the FCCA’s investigative powers, such as hearings conducted and requests for information made by the FCCA and, significantly, its powers to conduct inspections. The rules regarding immunity from or the reduction of fines have also been amended.
One of the most significant amendments to the Competition Act relates to the imposition of fines on associations of undertakings, such as trade associations. Based on the amended Competition Act, when determining the amount of a fine imposed on a trade association, the FCCA can take into account the turnover of individual members of the association. Additionally, members of the association may, under certain conditions, be held liable for a fine imposed on the association. The possibility to impose a fine for procedural infringements (in addition to the actual alleged breach of competition law) has now also been expressly included in the Competition Act.
These most recent amendments to the Competition Act are also regarded as paving the way for more intensified cooperation between the national competition authorities of the EU Member States and enabling further cross-border cooperation in, for example, surprise inspections carried out at companies’ premises. Despite the widely-applied distance working recommendations due to the Covid-19 pandemic, surprise inspections have been started up again by the competition authorities, including the FCCA.
The amended Competition Act also brings an element familiar to many under the merger control procedures into the world of antitrust. The FCCA now has the power to propose that the Market Court impose structural corrective measures, such as divestments, on companies in the context of antitrust enforcement.
As regards the level of fines, the recent amendments can be expected to bring welcome clarity and predictability on how the FCCA calculates the fines it proposes be imposed. Whether this is the case in practice still remains to be seen.
In its report on the amendments to the Competition Act, the FCCA itself has underlined that this amendment “may raise in particular the fines proposed for the most serious and long-term infringements”. It is also worth noting that these fine-related amendments do not extend to the Market Court or the Supreme Administrative Court, which retain extensive discretion in assessing the amount of the fines proposed by the FCCA.
Amendments to the public procurement Rules leading mainly to technical changes and clarity
The amendments to the rules on public procurement came into force on 1 July 2021.
In terms of clarifications, at the top of the list are the rules on notifying the maximum volume or value of procurement contracts based on a framework agreement. According to the amendment, a contracting authority must indicate the maximum volume or value of the presumed purchases to be made under the framework agreement in its request for tender.
The purpose of framework agreements is to act as a technical tool, allowing several procuring entities and several suppliers to set out the prices, volumes and other terms of procurement contracts during a certain period. They are generally used in situations where the individual procurements are to occur in several stages over time and may entail very different types of needs of the contracting entity.
A typical example would be a procurement of drugs and other medical products by a central hospital district. Recent case law and market practice have illustrated that the rules around these types of situations will benefit from clarification.
Certain technical clarifications have also been made to the rules concerning the voluntary exclusion requirements and their application to so-called small procurements. Additionally, a number of the provisions in the Act on Procurement and Concession Contracts, the Act on Public Contracts in the Utilities Sector and the Act on Defence and Security procurements have been clarified to ensure their application is in accordance with the EU Procurement Directives.
All of these clarifications and technical amendments are a step towards increasing legal certainty and increasing the quality of public procurements in Finland to the benefit of tenderers and contracting entities alike.