Insights | March 16, 2022

Year in review – competition and foreign direct investment highlights of 2021 in Finland and Sweden

Despite the continuing COVID-19 pandemic, 2021 brought with it a number of interesting developments in the areas of competition law and foreign direct investment. In particular, in merger control, a clear trend was the increase in pan-Nordic transaction activity, which led to a number of simultaneous merger approval processes being conducted by several Nordic competition authorities. This also provided a glimpse into the practical application of the cooperation agreement between the Nordic competition authorities. For example, the merger between Altia Oyj and Arcus ASA (the merged entity now being Anora Group Oyj), described in more detail below, was investigated by the Finnish, Swedish and Norwegian competition authorities, all of which required partially-aligned remedies to clear the merger.

In Finland, the Finnish Competition and Consumer Authority (FCCA) continued to lay down stricter conditions in its merger approvals, as it imposed both an up-front buyer obligation and a fix-it-first obligation for the first time in two consecutive conditional clearance decisions. Other highlights in Finland include the Supreme Administrative Court’s long-awaited decision in the power transmission line building cartel case clarifying how the duration of a cartel infringement is to be determined.

2021 was the Swedish Competition Authority’s (SCA) busiest year ever, with 139 mergers approved. Whilst no merger was prohibited, four cases merited in-depth (Phase II) investigations and in two cases remedies were required. Other highlights in Sweden include  the SCA’s decision to  close its investigations into certain insurance companies after four years of investigation, as well as the SCA’s call for new enforcement tools to combat competition concerns which cannot be addressed under the current competition legislation.


Merger control
  • The FCCA cleared the merger between alcoholic beverage suppliers Altia Oyj and Arcus ASA subject to conditions in April 2021. The FCCA found that, without remedies, the merger would have distorted effective competition in the Finnish markets for aquavit and berry liqueur. To remedy the FCCA’s concerns, the parties agreed to divest an aquavit brand and terminate a distribution agreement concerning berry liqueurs. In respect of the divestment, the FCCA applied the so-called up-front buyer obligation for the first time in Finland. The up-front buyer obligation entailed that the parties could complete the merger only after a binding agreement on the required divestiture was concluded with a buyer approved by the FCCA. Subsequently, the FCCA has made it known that it is likely to apply the up-front buyer obligation in most divestment cases in the future. The up-front buyer obligation was applied again a few months later when the FCCA conditionally approved the acquisition of Fidelix Holding Oy by Assemblin AB.
  • Continuing on the track of firsts, in its conditional clearance of Mehiläinen Oy’s acquisition of Fysios Holding Oy in early 2022, the FCCA applied the so-called fix-it-first obligation – a stricter version of the up-front buyer obligation – requiring that the parties find a suitable buyer for the divestment business and enter into a binding agreement with the buyer already during the FCCA’s investigation, thus putting considerably more pressure on the timeframe to negotiate and agree the divestment transaction. The FCCA has, however, indicated that the up-front buyer obligation will likely be preferred over a fix-it-first obligation in its future case practice.
  • Finally, the FCCA resorted to behavioral remedies in one case in 2021 even though such remedies are typically not considered sufficient to resolve competition concerns. In the conditional clearance of the acquisition of Heinon Tukku Oy by Valio Oy, the FCCA identified a risk of Valio gaining access to competing manufacturers’ wholesale pricing and other sensitive information through Heinon Tukku, which could influence Valio’s incentives in pricing and significantly restrict competition between manufacturers. To address the FCCA’s concern, Valio undertook to ensure that no such information would be passed on within the organization in a way that would hinder competition for a period of ten years from the FCCA’s decision. As the transaction did not raise any horizontal competition concerns, the FCCA considered this behavioral remedy to be sufficient to eliminate the identified competition concerns.

Mergers in figures

Following the clear slowdown in merger activity in 2020 caused by the Covid-19 pandemic, the number of merger control cases rebounded in 2021 close to the pre-pandemic levels. Of the 32 merger decisions issued in 2021, the vast majority were unconditional clearances in Phase I. Three cases required an in-depth investigation and were cleared subject to conditions after a Phase II investigation. In addition, the FCCA modified the conditions imposed in one case.

Restrictive agreements
  • The Finnish Supreme Administrative Court (SAC) issued its long-awaited decision in the power transmission line building cartel case in August 2021, clarifying the assessment of the duration of competition law infringements and the expiry of limitation periods under EU competition law. The SAC’s decision was preceded by a preliminary ruling by the Court of Justice of the European Union (CJEU) in January 2021, in which it concluded that the end date of an alleged bidding cartel – and the starting date for calculating the limitation period – is the date on which the agreement setting out the essential characteristics of the project was entered into. In the case at hand, the SAC concluded that the agreement setting out the essential elements of the project allegedly subject to coordination had been signed over seven years before the FCCA issued its fining proposal to the Market Court. As the relevant limitation period under the Finnish Competition Act is five years from the end of the infringement, the FCCA’s proposed fine of EUR 35 million was deemed time-barred. For a more in-depth discussion of the case, please see our earlier Roschier Insights article.

  • 2021 also saw a clear trend of fines being imposed on trade associations for anti-competitive behavior. In February 2021, the FCCA proposed that the Finnish Market Court impose fines totaling EUR 22 million on the Finnish Real Estate Management Federation and six companies represented on the Federation’s Board for participation in a price cartel between 2014 and 2017. The case is currently pending before the Market Court. In August 2021, the SAC issued its awaited decision in the Finnish driving schools cartel case, finding that a trade association for driving schools in the Uusimaa region had issued illegal price recommendations to its members. The SAC imposed a fine of EUR 44,000 on the trade association and three driving schools, doubling the fines imposed by the Market Court.
  • In March 2021, the Finnish Market Court issued its decision finding that three companies active on the Finnish building insulation market had participated in a cartel aiming to increase the price level of expanded polystyrene (EPS) insulation in Finland between late 2012 and mid-2014. The Market Court imposed a fine of EUR 3.2 million on two of the companies, the third company having received immunity from fines under the Finnish leniency program. The Market Court largely confirmed the FCCA’s proposal, but imposed lower fines than proposed by the FCCA, as it did not find proof that the cartel would have continued until the end of 2014, as claimed by the FCCA. One of the companies fined by the Market Court has appealed the decision to the SAC. In respect of the other two companies, the Market Court’s decision is final.
Public procurement
  • The FCCA shed some much welcomed light on the competition law assessment of joint bids in competitive tender processes when it issued a proposal to impose a fine of approximately EUR 1.9 million on six companies and their joint ventures operating in the public transport services sector in the Turku region. In the FCCA’s view, the joint bids submitted by the companies through their joint ventures limited the number of alternatives available to the contracting authority, as, objectively, the companies would have been able independently to participate in the competitive tendering processes. Therefore, the FCCA concluded that the joint bids constituted a serious violation of the Finnish Competition Act, as they eliminated all competition between the companies. For a more in-depth discussion of the case and the factors to be taken into account when considering a joint bid, please see our earlier Roschier Insights article. The case is currently pending before the Market Court.

  • In May 2021, the SAC handed down a landmark precedent relating to the definition of public service agreements and concession contracts in the context of taxi-transport services procured by the Social Insurance Institution of Finland (Kela). The SAC found that, while the agreement in question did meet some of the criteria for a concession contract, one essential criterion – passing the financial risk related to the operation of the service to the service provider – was not fulfilled. The SAC held that, under normal operating conditions, the service provider would not be exposed to market uncertainties and the risk of not being able to recoup the investments and costs incurred would be negligible in relation to the agreement. Although the absolute amount of the assigned risk generally has no effect on whether a contract is classified as a concession contract or not, the negligible risk caused the SAC to classify the contract as a public service agreement, revoking the Market Court’s earlier decision.
  • Another interesting decision from the SAC concerns the interpretation of the principle of proportionality in the context of a contracting authority’s decision to make the conclusion of a procurement agreement conditional upon the resolution of a patent dispute between the tenderers, even though no such requirement had been laid down in the invitation to tender. The SAC held, in line with the Market Court’s decision, that in this context and considering that no final judgment on the patent dispute was expected during the relatively short contract period, the conditions laid down in the award decision did not comply with the principle of proportionality set out in the Act on Public Procurement and Concession Contracts.
Foreign direct investment review
  • Foreign direct investment (FDI) review in Finland – and across the EU – has increased significantly in the past few years, and 2021 was no exception. The Finnish FDI regime applies to investments in or acquisitions of so-called monitored entities, which include companies active in the defense and security sectors as well as companies otherwise considered critical for safeguarding vital functions of society. The enforcement of the Finnish FDI regime clearly increased as a result of the implementation, in late 2020, of the EU FDI screening regulation (Regulation 2019/452), which essentially requires each EU Member State to inform the European Commission and other EU Member States of its FDI screening activities. The European Commission and other EU Member States have a set timeframe within which they must inform the Member State conducting the review whether they will be submitting an opinion regarding the approval being sought. In our experience, the multijurisdictional mechanism has the potential to significantly extend the timeframe of the FDI review in Finland. The exceptional circumstances of the Covid-19 pandemic have also clearly broadened the substantive scope of the FDI review, particularly as regards the concept of companies considered critical for safeguarding vital functions of society. During 2021, it was clear that, due to the pandemic, companies fell into this category particularly if they were active in diagnostics or the manufacture of products deemed essential for the handling of the pandemic, even though in normal circumstances these companies would have been unlikely to be considered monitored entities. We expect to see FDI screening activities remaining at a high level in 2022 as well.
Legislative and other developments
  • The so-called ECN+ Directive has finally been implemented in Finland as the latest amendments to the Finnish Competition Act entered into force on 24 June 2021. With these amendments, the FCCA was, inter alia, granted more extensive enforcement and investigative powers with respect to its antitrust investigations and the possibility to impose higher fines on associations of undertakings, such as trade associations. For a more in-depth discussion around these legislative changes, please see our earlier Roschier Insights article. The ECN+ Directive was also implemented in Sweden last year.

  • On 1 November 2021, the EU Directive on Unfair Trading Practices in the Food Chain was implemented into the Finnish Food Market Act. The reform aims to balance the negotiation positions in the agricultural and food supply chain by prohibiting certain trading practices in business-to-business relationships. The new provisions, designed to protect suppliers in a weaker negotiating position, apply when the buyer’s turnover exceeds that of the supplier’s and is in excess of EUR 2 million. Under the amended legislation, a buyer is, for example, prohibited from making unilateral amendments to contract terms. The reform may also impact the competition law assessment of trading practices between grocery retailers and their suppliers, as the trading practices considered unfair under the amended Food Market Act may widen the scope of practices considered as an abuse of dominance under the Finnish Competition Act. For further reading on the topic, please see our earlier Roschier Insights article.
  • The Ministry of Economic Affairs and Employment (MEAE) initiated a public consultation concerning the possible expansion of the merger notification obligation under the Finnish Competition Act in January 2022. The consultation stems from a report published by the FCCA in June 2021. Currently, transactions are notifiable in Finland if the combined worldwide turnover of the parties exceeds EUR 350 million and the turnover in Finland of each of at least two of the parties exceeds EUR 20 million. In its report, the FCCA suggests that the first threshold should be amended to the parties’ combined turnover of EUR 100 million generated in Finland. The latter threshold would remain unchanged. In addition, the FCCA suggests that it should be granted the right to require a notification even if the turnover thresholds are not met, provided that one or more of the parties generate a combined turnover of EUR 50 million in Finland. In the MEAE’s initial view, the amendment of the threshold concerning the parties’ combined turnover would be justified. In respect of the right to require a notification even if notification thresholds are not met, the MEAE did not take a clear position in the consultation documents. The deadline for comments was 11 February 2022. The schedule for the next steps in the process is still open. Several interested parties, including the Finnish Bar Association, have submitted a statement in response to the consultation request.


Merger control
  • In April, the SCA cleared the merger between the alcohol and beverage suppliers, Altia and Arcus after the companies offered voluntary commitments relating to aquavit, vodka and cognac. In Sweden, the state-controlled retailer, Systembolaget has a monopoly over selling alcohol above a certain alcohol percentage to final consumers in the retail segment and because of this, it is also by far the largest buyer of alcohol in Sweden. Despite Systembolaget’s monopsony with transparent and regulated purchasing and pricing procedures, the SCA’s investigation found that the merger could lead to consumer harm and required remedies in the vodka, aquavit and cognac segments. Market definition and consumer preferences for premium versus lower price products, as well as preferences as to national origin were at the heart of the investigation. The remedies accepted included brand divestitures, as well as an exclusive sublicensing arrangement which was offered as an alternative to a divestment in the cognac segment.
  • In September, the SCA conditionally cleared Axfood/Dagab’s acquisition of a combination of sole and joint control over the Bergendahl group. Both groups are active in several levels of the grocery industry. The concentration raised concerns only at the wholesale level, where customers that were not connected retailers of Dagab were, according to the SCA, at risk of receiving less favorable terms than customers that were connected to Dagab. The remedies that were ultimately accepted by the SCA included that Dagab would negotiate with Bergendahl Foods’ current clients and offer them terms that were equal to or more favorable than the existing terms, and that Dagab would negotiate with and offer non-discriminatory terms to “new innovative clients” (primarily aiming at e-commerce retailers).

Mergers in figures


Restrictive agreements
  • In February, the Patent and Market Court of Appeal upheld the lower court’s judgment, dismissing Telesport’s claim that Telia and Svea Billing had breached the Swedish prohibition on anti-competitive collusion between companies. Telesport had sold mobile subscriptions to customers on service provider TeliaSonera’s network via their enabler Telogic, who, in 2013, filed for bankruptcy. Telogic’s competitor Svea Billing subsequently entered into negotiations with TeliaSonera with the intention of replacing Telogic as TeliaSonera’s provider. Telesport sued TeliaSonera and Svea Billing, alleging that they had entered into an anti-competitive agreement or a concerted practice to exclude Telesport from Telia’s network, which led to a loss of earnings for Telesport. The central issue for the Patent and Market Court of Appeal was whether there was a common understanding between Telia and Svea Billing to exclude Telesport. With reference to the CJEU’s case law, and in particular the Adalat case, the Court stated that, while it is sufficient for the establishment of an agreement that measures proposed by one party are implicitly accepted by the other, it is necessary in such a case that the intention by the company proposing such measures constitutes an explicit or implicit invitation to jointly implement an anti-competitive objective. The Court assessed the oral and written evidence and concluded that it did not support the conclusion that TeliaSonera and Svea Billing had a common understanding to exclude Telesport from TeliaSonera’s network, whether by a formal agreement or by way of a concerted practice.

  • As mentioned in last year’s Year in Review, the SCA sued the Swedish dairy company Arla for violating the prohibition against anti-competitive agreements. In October 2021, the Patent and Market Court published its verdict. Arla agreed that, in a public procurement process, it had shared strategic information with a competitor concerning its intended bid, as well as the margins for a number of products included in the procurement process. Arla argued that since it had informed the SCA about the information exchange and provided information during the investigation, it should receive a full or partial immunity from fines. In the procurement, the contracting authority had informed the SCA that it suspected tenderers of having cooperated in the process. Subsequently, the SCA issued a request for information to Arla. After having received the information request, Arla anonymously contacted the SCA inquiring if leniency in a potential violation in regard to information sharing in a procurement process was an option, which the SCA confirmed. Arla then orally applied for leniency, and received a marker from the SCA based on initial information of the infringement. As a response to the information request, Arla referred to its leniency application, which was supplemented on the same day with additional information. Even though Arla had received a marker, the SCA argued that a marker is not a guarantee of leniency, nor is it a confirmation that a case is already under investigation. It further argued that at the time of the leniency application, the SCA already had sufficient evidence and that the information supplied by Arla was neither eligible towards leniency since it was essentially information covered by the information request, nor concerned other matters than the violation. The Court sided with the SCA on the matter of leniency and found that the SCA had in fact had sufficient prior evidence for an intervention against Arla, and that the information supplied by Arla prior to its leniency application had not been supplied freely but rather in response to the direct request from the SCA. The Court, therefore, fined Arla SEK 1.1 million (about EUR 100,000).
  • In July, in an interim decision, the SCA ordered Svensk Mäklarstatistik AB to continue to provide raw data to Valueguard Index Sweden and to allow Valueguard to produce and publicize statistics concerning condominium transactions based on that raw data. The SCA had received a complaint from Valueguard that Svensk Mäklarstatistik had terminated an agreement with Valueguard, only to propose a new agreement which did not include the right for Valueguard to publicize the statistics. Without the raw data, Valueguard could not produce its “HOX-index”, which is an index central to the financial services Valueguard offers. The raw data collected by Svensk Mäklarstatistik from realtors had no other supplier or substitutes. Accordingly, Svensk Mäklarstatistik had a monopoly on the raw data and, as such, a dominant position on the market for the publication of statistics regarding the housing market in Sweden. The SCA concluded that the refusal of Svensk Mäklarstatistik to allow Valueguard to publicize the statistics would likely eliminate all effective competition on the market. This refusal was not objectively justified and, since the market was a monopoly, no actual or potential alternatives existed for Valueguard. As a result, the SCA concluded that it was probable that Svensk Mäklarstatistik had abused its dominant position and coupled the interim decision with a fine of SEK 2 million until the final decision has been adopted.
  • In the spring of 2017, the SCA conducted dawn raids on a number of insurance companies in what was to become the biggest cartel investigation in history in Sweden. In February 2021, however, after almost four years of investigation, the SCA decided not to pursue the matter further. The SCA’s focus changed throughout the investigation. In the end, the SCA suspected that an insurance broker Söderberg & Partners and insurance companies If and Trygg-Hansa had agreed to divide three energy insurance contracts which were to be awarded by way of a public procurement process, between the two insurance companies. The SCA suspected that, in their role as an insurance broker, Söderberg & Partners had communicated information between the tenderers in a way that infringed Article 101 of the TFEU. In other words, the suspected infringement was a somewhat innovative theory of hub-and-spoke cartel conduct. Ultimately, the SCA found that this theory did not hold up in this case and closed the investigation. The circumstances did not show that there had been an exchange of information deemed to affect competition negatively. However, the SCA noted that some interests of clients had been overlooked by the broker Söderberg & Partners, and such practices could risk undermining the procurement process and in turn harming competition. In other words, the SCA did not write off its theory, but found no evidence of harm in this particular case.
Foreign Direct Investment
  • In November, a government inquiry presented its proposal for a Swedish foreign direct investments (FDI) regime (SOU 2021:87). The proposed legislation would give the Swedish state the power to intervene against foreign investments in several sectors, if they are at risk of jeopardizing Swedish national security, public order or public safety. Examples of such sectors include services essential to the basic needs of society, activities related to dual-use products, activities whose principal purpose is the processing of sensitive personal data, and activities related to raw materials critical to the EU. The scope of the FDI regime would thus be significantly wider than that of the current legislation, which only enables governmental review in relation to activities that are vital to national security. Under the proposed regime, acquisitions of 10% or more of the votes in a target company would be notifiable. The authority suggested to be responsible for the review is the Inspectorate of Strategic Products. The legislation is proposed to enter into force on 1 January 2023. The Government has yet to present a bill based on the proposal, and changes are expected before it is passed into law. This is, therefore, an area we will keep a keen eye on in the months to come.

Legislative and other developments
  • For some time now, the SCA has been conducting a number of inquiries regarding competition in different sectors of the market. During 2021, three extensive reports were published based on these inquiries, the latest regarding competition in the building materials market. Even though the scope of these reports has been diverse, we have noticed that the conclusions in all of these reports have a common theme. The inquires have all concluded that the SCA needs new tools to counter competition issues. Based on the current rules, competition authorities within the EU are usually limited to acting in situations related to i) abuse of dominance, ii) cartels or agreements that prevent, restrict or distort competition, or iii) mergers that can be expected to significantly impede effective competition. However, new legislation providing for such tools was proposed by the European Commission in late 2020 with the Digital Markets Act, although these tools are only applicable in the digital markets. The tools included in the Digital Markets Act would give authorities the possibility to restrict certain behaviors that might limit competition, but are outside the framework of dominance or restrictive agreements. There is also the issue of “killer acquisitions”, meaning mergers in which the target has a turnover below the relevant threshold required for competition authorities to be able to assess the merger, something that the Digital Markets Act would alleviate. In Sweden, the SCA has concluded in their reports that the markets investigated are complex and that there are signs of competition concerns. The SCA argues that there is a need for legislative changes to tackle these concerns, since the issues are not due to abuse of dominance or cartels, as well as a tool to investigate mergers that do not meet the notification threshold. The first of the proposed tools would give the SCA the ability to require that the SCA must always be informed of mergers connected to certain companies or certain sectors. The other main proposed tool that the SCA argues it needs is a “market investigation tool” to enable it to investigate more broadly competition within a sector of the market, including remedies for the sector to promote competition in the future.