Etusivu \ Deregulation and New Legislation \ Reform of the Competition Act

Reform of the Competition Act

In March 2017, the Ministry of Employment and the Economy completed a working group report (in Finnish) on the reform of the Competition Act. The deadline for providing statements on the draft bill (in Finnish) based on the working group report was at the end of January 2018. The working group, in which the FCCA was also represented, had two tasks:

  1. to assess the amendment needs of the Competition Act in accordance with the Government Programme; and
  2. to make proposals on other amendment needs of competition legislation on the basis of the harmonisation of EU and national legislation and the related reform proposals made.

The work on the first task was completed in 2016. According to the interim report  (in Finnish) published at the time, it was not justified to address the profitability challenges of agriculture through competition legislative means. However, the working group deemed it necessary to clarify the wording of the so-called agricultural derogation in the Competition Act to more clearly apply to the arrangements allowed by EU legislation.

The report pertaining to the second task was completed on 14 March 2017, and the draft Government proposal prepared by the Ministry on the basis of the report was circulated for comments in December 2017. After completion of the working group report, the European Commission issued a directive proposal regarding the independence, resources and enforcement powers of the Member State competition authorities in their application of Articles 101 or 102 of the TFEU. The parliamentary process concerning the proposal will continue in 2018. The provisions of the directive proposal are partly similar to the proposals of the working group, while in some respects they go further. It was, therefore, not practical to lay down provisions on matters covered by the proposal before completion of the final directive. Hence, and due to feedback received during the commenting round, the national draft bill is more limited in scope than the working group proposal..

The three key suggestions in the proposal are:

  1. Tightening the competitive neutrality provisions so that public operators would need to maintain separate accounts of the economic activities they undertake. This provision would improve the possibility to intervene in the economic activities of a public entity that threatens equal competition and would expedite the processing of the matter.

  2. The inspection provisions would be amended to allow the FCCA to conduct searches on electronic inspection material in its own premises instead of reviewing the material in the company’s premises, as is the case under the current legislation. The proposal would rationalise the inspection process and improve the conditions for antitrust supervision, as the inspectors and equipment needed for inspections would not have to be tied for long periods to companies around the country.

  3. Improving the FCCA’s right to obtain information so that the obligation to provide information would also apply to public sector operators and give the FCCA the possibility to disclose and acquire information that is otherwise confidential from other specified authorities. The first improvement is necessary for the supervision of competitive neutrality and cartels, as practical experience has demonstrated shortcomings in the willingness and legal possibilities of public sector entities to disclose information that would help uncover cartels to the FCCA. The last reform is a requirement for cooperation between authorities for combating cartel-type restrictions and the black economy, which undermines competition.

The reform package for the Competition Act also includes a cooperation agreement between Nordic competition authorities, now also joined by Finland. The heads of the Nordic agencies signed the agreement in September 2017, but its entry into force requires amendments to competition legislation. The Government submitted the proposal (in Finnish) concerning this to Parliament in December 2017.  Incorporating the provisions of the agreement in the Competition Act would improve the processing of Nordic cross-border competition cases and also provide the appropriate legal framework for Finnish officials to discuss and share information on acute competition issues with Nordic colleagues.