Roschier Insights Webinar, key takeaways: Significant changes in competition law praxis and legislation
Our EU & Competition law experts, Senior Associate Sari Rasinkangas and Partners Christian Wik and Ami Paanajärvi discussed various competition law developments in the last year and certain future trends and expectations in the first ever Roschier Insights Client Webinar, held in late May 2020.
Covid-19 related developments were naturally very much on the agenda with focus on the willingness of competition authorities to allow exceptional cooperation between companies during the pandemic. On the merger control side, the first blocking of a proposed transaction by the Finnish Market Court and the tendency of the Finnish Competition and Consumer Authority (FCCA) to open in-depth investigations was discussed. Finally, the webinar was rounded off with a glance at the proposed legislative changes to the Competition Act and what can be expected in the near future.
The COVID-19 pandemic has had a significant impact on how competition law is applied. Competition authorities have signaled flexibility for necessary cooperation between competitors but, at the same time, companies are warned against illegal exploitation of the crisis. We have also seen the return of comfort letters with the first one already adopted by the European Commission.
Whilst it is clear that more cooperation is allowed, the competition authorities’ focus is currently on cooperation aiming to ensure the supply of essential scarce goods and services, such as medical supplies. All cooperation measures are expected to be limited to the necessary and to be implemented only temporarily. The temporary framework put in place by the European Commission, and subscribed to widely by national competition authorities, is in force until further notice. Only time will tell for how long.
Merger control developments
The enforcement of merger control is also affected by the crisis, and delays and obstacles are to be expected in the notification process. Several Nordic competition authorities have, in fact, already extended the timelines reserved for merger review processes and there is currently a proposal also in Finland to extend the second phase investigations with a month. It remains to be seen whether this proposed temporary law will pass parliamentary review, as many commentators note that it is excessive and unnecessary considering the possibilities for extension already available in the currently applicable Act.
Before the current crisis, we saw historical events in merger control in the form of the FCCA issuing a blocking proposal, ultimately upheld by the Market Court, in the Kesko/Heinon Tukku case. This was the fourth blocking proposal in the history of the FCCA, and the first one that the Market Court accepted. The FCCA is currently in the midst of two in-depth reviews, at least one of which may prove to be a challenging one.
Increased liability for companies under the revised Competition Act
On 14 May 2020, the draft proposal for the amendment of the Competition Act was published and is currently subject to consultation (ending 24 June 2020). The draft proposal contains many interesting elements with a strong focus on increasing resources and tools for the FCCA in order to facilitate effective antitrust enforcement whilst broadening the liabilities of companies. In particular, the aim is to solidify the rules concerning liability for infringements that take place in the context of trade association meetings, and ensure that fines are ultimately calculated based on the turnovers of the member companies and not only of the association itself.
Another very interesting proposal is to grant the FCCA the power to propose structural remedies in order to end anti-competitive behavior. This could conceivably be e.g. the divestment of ownership in competing companies in order to prevent the flow of competitively sensitive information between them. The revised Competition Act is expected to come into force in February 2021 at the latest.