Finland: economist perspective

Phase II merger reviews have continued to dominate the Finnish field of economics of competition law. Economists at the Finnish Competition and Consumer Authority (FCCA) have continued their already strong involvement in merger reviews. We note two key developments in merger investigations. First, in February 2020, the Market Court prohibited a merger between two grocery wholesalers in accordance with the FCCA’s proposal. This was the first time a merger has been prohibited in Finland and a large amount of economic evidence was presented in the case. Second, according to the lawyers we interviewed, many of the recent merger reviews have been detailed and data-intensive, increasing the duration and scale of the FCCA’s review processes. In contrast, the number of major cartel and abuse of dominance cases in Finland has remained moderate.

This article is based on interviews with the FCCA and prominent competition law practitioners from the law firms Avance, Castrén Snellman, Frontia, Hannes Snellman, HPP Attorneys, Krogerus, Mentula Attorneys, Merilampi and Roschier.

Merger control processes have become more data-intensive

In 2019, the FCCA accepted 30 mergers unconditionally, accepted four conditionally and prohibited one. Three cases entered Phase II merger investigations. Moreover, during the first half of 2020 the FCCA accepted six merger filings and initiated three Phase II merger investigations.

According to the lawyers interviewed, the FCCA has increased the length of its Phase II investigations. The FCCA applied extensions for Phase II investigations three times during 2019. Two of these extensions were applied in the Kesko/Heinon Tukku merger review, which the Market Court ultimately prohibited. The FCCA’s investigation lasted for six months after the notification. In addition to applying for extensions, the authority has issued two “stop-the-clock” decisions in both Mehiläinen/Pihlajalinna and Caverion/Maintpartner merger investigations on the grounds of incomplete data submissions from the parties.

According to the FCCA, the increasing length of the Phase II investigations stems, in particular, from the complexity of the recent cases. As pointed out by the FCCA, notifiers tend to be supportive of extensions to ensure sufficient time to respond to the authority. Additionally, the FCCA noted that in complex cases the parties sometimes present new evidence late in the process.

Many of the lawyers we interviewed told us that the FCCA’s data requests have become significantly more detailed. Some pointed out that merging parties had found it challenging to collect materials that were not readily available within the requested time frames. Most of the lawyers we interviewed identified opportunities for improving the transparency of how the FCCA sought to use the requested data. The FCCA noted that high-quality data is essential for high-quality analysis, which is in line with the general trend in merger reviews across the EU. We observe, that unlike many other jurisdictions, in Finland there are no data room arrangements for parties during merger review processes due to legal reasons.

Some lawyers considered that, notwithstanding the general view that economics has become an integral part of the FCCA’s analysis in more complex mergers, the analysis tends to rely heavily on market definition and, hence, structural analysis. The FCCA told us that the specific approaches to economic analysis vary case by case and thereby year by year.  For example, data availability and industry characteristics can dictate which kinds of economic tools can be used reliably. The FCCA undertakes economic analysis of, for example, price effects whenever such analysis is deemed appropriate and plausible. Based on our experience over the recent years, in addition to the important role of market definitions and structural analysis, the FCCA has employed, for example, closeness of competition analysis, variants of price rise tests and qualitative analysis depending on the nature of the merger investigated.

The Market Court prohibited a merger in a landmark ruling

In February 2020, the Market Court prohibited a merger between Kesko/Heinon Tukku in the grocery wholesale market, confirming the FCCA’s finding that the merger would have harmed competition in the market for broadline wholesale distribution of groceries to food service customers. The Market Court was presented with a large amount of economic evidence from both the FCCA and the parties.

This is a landmark decision in Finland, because it is the first time in the Finnish competition law history that a merger has been prohibited by the Market Court. Prior to this, all three mergers handled by the Market Court have been accepted subject to commitments.

Market definition played a central role in the investigation. More specifically, an important question was whether broadline distribution of groceries constitutes a relevant market of its own. One of the larger debates in the matter was how the small but significant and non-transitory increase in price test should be conducted in such a case, both in terms of methodological choices and the evidence underlying the critical loss test (eg, on diversion ratios). Taking all the evidence in the round, the Market Court shared the FCCA’s view that broadline distribution of groceries forms a separate product market.

The government temporarily extended the time limits for Phase II merger investigations due to covid-19

Due to delays caused by the covid-19 pandemic and the consequent requirement for remote working, the Finnish government extended maximum time limits for Phase II investigations by 23 working days for mergers filed from 2020 July to October. In August 2020, the Market Court granted an extension to an ongoing Phase II investigation based on delays in the investigation that stemmed from the exceptional circumstances triggered by the covid-19 pandemic.

Five months after the covid-19 outbreak hit Europe, the FCCA received four merger notifications. In the same five-month time period, the FCCA has accepted six mergers. Compared to last year, when the FCCA dealt with 35 cases, it seems that the number of cases in 2020 will be less than half of what we saw in 2019. The FCCA has informed the potential notifiers that, owing to remote working, all their processes have slowed down. The FCCA wants to be informed in advance of upcoming notifications and has recommended to postpone notifications where possible. All interactions with the FCCA are arranged virtually.

No large changes in the antitrust field

Cartel and abuse of dominance cases, at least judging from the number of official decisions, remain infrequent. Based on our experience, the number of antitrust cases where the FCCA would conduct economic analysis is limited as they are mostly decided on a “by object” basis. This, of course, mainly reflects the FCCA’s continued focus on cartels while abuse of dominance cases have been infrequent.

In August 2019, a ruling from the Supreme Administrative Court brought an end to a larger cartel case against seven bus operators, their trade association and Matkahuolto. The Supreme Administrative Court imposed a fine of €8.9 million, a figure significantly less than the €34 million proposed by the FCCA. In November 2019, the FCCA proposed fines of €0.3 million on participants in an alleged driving school cartel.

In May 2020, following a five-year investigation, the FCCA proposed sanctions of €9 million for a hardware supplier, IKH, due to an illegal resale price maintenance (RPM). In the FCCA’s press release, the FCCA pointed out that RPM is one of the most serious restrictions on competition and probably more common than expected. Currently, the FCCA’s sanction proposal is under the review of the Market Court.

Six investigations into possible anticompetitive behaviour by companies dispatching taxi rides reimbursed by the Finnish Social Insurance Institution (Kela) are continued. Seven similar investigations were closed in June 2020, as the taxi dispatchers had changed the practices that the FCCA had assessed as problematic. These investigations were initiated by the FCCA in spring 2019 in response to a number of complaints from taxi drivers following the taxi market liberalisation in 2018. So far, the FCCA has raised concerns regarding discriminatory conditions, which the authority considers harmful to competition in the newly liberalised market.

In March 2020, the FCCA closed two major antitrust investigations; a four-year investigation on alleged predatory pricing concerning the Finnish postal incumbent, Posti, and an investigation on cooperation in advertisement sales on linear-TV between Sanoma Media Finland and Fox Network Group. In the former case, the FCCA carried out economic analysis on Posti’s pricing practices and found no proof of predatory pricing or intention to foreclose competition. In the latter case, the FCCA decided to end the investigation due to changes in the competitive landscape in the advertisement market. The authority continues to follow market developments and possible effects of the cooperation and will reopen the investigation if considered necessary.

In August 2020, the FCCA closed an investigation on suspected anticompetitive cooperation between three private healthcare providers in bidding contests organised by municipal authorities in the social and healthcare services market. The investigation began with dawn raids in 2017. The FCCA did not find evidence of a competition law breach.

Harmonisation with ECN+ Directive is expected to bring some changes in the Finnish Competition Law

The upcoming ECN+ Directive aims to harmonise and make competition monitoring more efficient within the EU. In Finland, the ECN+ is expected to lead to some procedural changes and calculation of fines, but we do not expect large implications for the role of economics and its use in the public enforcement of Competition Law. The bill is supposed to be handled in the parliament of Finland in September and to be enforced from February 2021.


Copenhagen Economics has been involved in three of the cases mentioned in this article, namely: Kesko/Heinon Tukku, Posti predatory pricing case, and one of the other mentioned mergers.

Get unlimited access to all Global Competition Review content