Competition Economics Handbook 2019


30 October 2018

Copenhagen Economics

The trend towards more Phase II merger investigations by the Finnish Competition and Consumer Authority (FCCA) continued during the past year. The role of economics in merger investigation is pronounced. Even though there are cases pending at the FCCA, the authority has not brought a cartel or abuse of dominance case to Market Court since January 2016.

Trend towards more Phase II merger investigations continues

Since August 2017, the FCCA has conducted Phase II investigations in 10 merger cases. In comparison, during the same period there were four Phase II investigations in Denmark and Norway, and none in Sweden. High caseload in mergers has led the authority at times stretching its resources to meet deadlines.

Six of the 10 merger cases are closed while four are pending. Out of six cases with a decision, two were cleared without remedies and four were cleared subject to remedies. Efficiencies seem to play an increasing role and are assessed perhaps more carefully than before.

Economics has an important role in merger analysis, and the chief economist, appointed at the beginning of 2017, and his team have typically a pronounced role in merger investigations. Party-appointed economists are often involved and used in many cases already early on in the merger process.

The FCCA seems to continue its focus in merger analysis on closeness of competition. The FCCA and the party-appointed economists typically use a range of economic tools to analyse closeness and to estimate the price effects of mergers. Customer surveys, qualitative evidence, indicative price rise tools such as UPP, bidding analysis and price regressions, among others, are often used in more complex mergers. Since there are no recent merger cases that would have been brought to Market Court, there is no precedent on how the FCCA would in practice reconcile closeness of competition and effects analysis with market definition.

No cartel or abuse of dominance cases pending in Market Court

Currently there are no cartel or abuse of dominance cases pending in Market Court. In fact, the FCCA has not brought a competition case to Market Court since January 2016. Three cartel cases, involving bus companies, the powerline market and the Finnish Bakery Federation, are currently pending in the Highest Administrative Court.

In May 2018, the Helsinki Court of Appeal dismissed the claims of the state forest owner, Metsähallitus, in the wood procurement cartel damage case. The wood procurement case is the largest cartel damage case in Finland and has included three separate processes: the damages raised by the state, the municipalities and the private forest owners. Economic evidence has played a central part in estimating the damages.

New director appointed

Kirsi Leivo started her five-year tenure as the newly appointed director of the FCCA in September 2018, when Juhani Jokinen retired from the position. In the media, Leivo has advocated for higher cartel fines and lowering the turnover threshold in merger control.