Cartels Comparative Guide -

1 Legal and enforcement framework

1.1 Which legislative and regulatory provisions apply to cartels in your jurisdiction?

The legal basis for cartel enforcement in Finland is the Competition Act (948/2011, as amended). Section 5 of the Competition Act corresponds in substance to Article 101 of the Treaty on the Functioning of the European Union (TFEU) and thus prohibits all agreements between undertakings, decisions by associations of undertakings and concerted practices which have as their object, or which result in, a significant prevention, restriction or distortion of competition. Section 5 applies where the anti-competitive conduct affects competition only in Finland or a part thereof. Where anti-competitive conduct affects intra-EU trade, the Finnish competent authority – the Finnish Competition and Consumer Authority (FCCA) – applies Article 101 TFEU in conjunction with the national provisions.

1.2 Do any special regimes apply to cartels in specific sectors?

The Competition Act does not apply to agreements or arrangements relating to the labour market. Similarly, Section 2 of the Competition Act excludes from the scope of the legislation arrangements by the following that fulfil the substantive requirements laid down in Article 42 TFEU:

agricultural producers;
associations of agricultural producers;
sector-specific associations; and
any associations formed by these sector-specific associations.

Subject to the above exclusions, the Competition Act has general application. In addition, sector-specific legislation applies, for instance, in the fields of telecommunications and energy markets, which also contain sector-specific rules on undistorted competition.

1.3 Which authorities are responsible for enforcing the cartel legislation?

The FCCA is the main responsible authority for investigating and enforcing cartel legislation in Finland. The FCCA is competent to:

conduct investigations into suspected anti-competitive practices; and
initiate proceedings to eliminate competition restrictions and the effects thereof.

Based on public information, the FCCA has approximately 35 officials for antitrust enforcement, which includes a dedicated cartel team of eight officials.

In addition to the FCCA, the Regional State Administrative Agency has been entrusted with the competence to conduct investigations pursuant to the Competition Act. In practice, however, the Regional State Administrative Agency is rarely, if ever, involved in competition investigations.

The Competition Act established a two-tier institutional framework insofar as sanctions are concerned. The FCCA investigates suspected anti-competitive practices. It is competent to find that the cartel prohibition has been infringed; and it may make a proposal for the imposition of an administrative fine where Section 5, in conjunction with Article 101 TFEU if applicable, has been infringed. However, the fine is ultimately imposed by the Finnish Market Court upon the FCCA's proposal.

1.4 How active are the enforcement authorities in investigating and taking action against cartels in your jurisdiction? What are the statistics regarding past and ongoing cartel investigations? What key decisions have the enforcement authorities adopted most recently?

In terms of the number of final decisions issued, the FCCA is moderately active. In recent years, it has issued two to three prohibition decisions annually on average. For instance, in 2021, the FCCA made a proposal for the imposition of fines in two separate cartel cases; while in 2020 it made only one such a proposal. By June 2022, no new cartel decisions had been issued as yet.

Information on ongoing investigations is limited. It is estimated that the FCCA has simultaneously under investigation between 10 and 20 cases involving suspected horizontal competition restrictions.

Most recently, the FCCA has made findings of anti-competitive practices and a proposal for fines in the following cases:

bus transportation services in the city of Turku, which involved the submission of joint tenders in contravention of competition rules;
the provision of real estate management and maintenance services, which involved several individual service providers and a trade association, and concerned anti-competitive price coordination; and
the provision of driving school services in the Eastern Metropolitan area, which involved eight companies and an industry association, and concerned price coordination.

Of these, the first two cases remain pending before the Market Court. In the case involving driving school services, the Finnish Supreme Administrative Court confirmed in 2021 the finding of infringement, although it somewhat adjusted the fines, which were moderate and finally ranged between €3,000 and €25,000.

Further, the Finnish Supreme Administrative Court delivered its judgment on the so-called power cable cartel, in respect of which a preliminary ruling was delivered by the Court of Justice of the European Union in early 2021. The legal question related to the interpretation of the statute of limitations with respect to a bidding cartel. In the specific case, the FCCA's proposal for the imposition of a fine was found to have been time barred.

2 Definitions and scope of application

2.1 How is a ‘cartel' defined in the cartel legislation?

The Competition Act does not contain a specific definition of ‘cartel'. Section 5 of the Competition Act prohibits all agreements between undertakings, decisions by associations of undertakings and concerted practices which have as their object, or which result in, significant prevention, restriction or distortion of competition. As the national provision mirrors closely Article 101 of the Treaty on the Functioning of the European Union (TFEU) in its substance and in its wording, the interpretation of Section 5 of the Competition Act follows the concepts of ‘agreement' and ‘concerted practice' applied in EU competition law.

2.2 What specific offences are defined in the cartel legislation?

Section 5 of the Competition Act prohibits all agreements, decisions and practices (including concerted practices) which have the object or effect of significantly impeding, restricting or distorting competition. The provision sets out a list of conduct that is prohibited, in particular. These are agreements, decisions and practices that:

directly or indirectly fix purchase or selling prices or any other terms of trade;
limit or control production, markets, technical development or investments;
share markets or sources of supply;
apply dissimilar conditions to similar transactions with other contract parties, placing the latter at a competitive disadvantage; or
make the conclusion of a contract subject to acceptance by the other party of supplementary obligations which, by their nature or according to commercial practice, have no connection with the subject of such a contract.

This list is not, however, a numerus clausus; and thus, any conduct that has as its object or effect the significant restriction of competition is prohibited.

2.3 Is liability under the cartel legislation civil, criminal or both?

Liability under the Competition Act is civil. Finnish law does not provide for criminal sanctions for violations of the Competition Act, excluding criminal liability for providing false or misleading evidence to an authority (here, the Finnish Competition and Consumer Authority (FCCA)).

In principle, Competition Act proceedings are administrative in nature and the FCCA makes, as a first-instance authority, findings on anti-competitive conduct. The FCCA's finding of an infringement can be appealed to the Market Court. The Market Court will impose a fine upon the FCCA's proposal, in the context of which it will also review the FCCA's findings on infringement. Decisions of the Market Court can be further appealed to the Supreme Administrative Court, which is the last judicial instance in administrative law matters, including public enforcement of competition law, in Finland.

2.4 Can both individuals and companies be prosecuted under the cartel legislation?

The Competition Act applies only to undertakings and associations of undertakings. An ‘undertaking' is defined in Section 4(1) of the Competition Act as "a natural person, and one or more private or public legal persons, that engage in economic activity". Proceedings pursuant to the Competition Act are of administrative law nature.

2.5 Can foreign companies be prosecuted under the cartel legislation?

Non-Finnish legal persons can be investigated and fined pursuant to the Competition Act. Section 5 of the Competition Act can be applied if a restriction on competition targets Finnish customers or has similar restrictive effects on the Finnish market, there being no requirement that the investigated company be Finnish registered. In practice, the FCCA cooperates with competent competition authorities in other countries when foreign, non-Finnish domiciled companies are being investigated.

2.6 Does the cartel legislation have extraterritorial reach?

The prohibition in Section 5 of the Competition Act has extraterritorial reach. The ‘effects doctrine' is followed in the Finnish competition law, as in EU competition law: even if a competition restriction is, for instance, concluded or effected outside the territory of Finland, the Competition Act may be applied if the restriction of competition targets Finnish customers or has similar competitive restrictive effects on the Finnish market. In practice, the Competition Act is applied to a restriction of competition which restricts competition in Finland or targets Finnish customers.

2.7 What is the statute of limitations to prosecute cartel offences in your jurisdiction?

The Competition Act sets out a statute of limitations that applies to the imposition of a fine in antitrust cases, including Section 5 of the Competition Act and Article 101 TFEU, which prohibit cartels.

In accordance with Section 19 of the Competition Act, the FCCA shall make a proposal to the Market Court for the imposition of a fine within five years of:

the date of the infringement; or
in the case of a single and continuous infringement, the date on which the infringement ended,

failing which no fine may be proposed by the FCCA.

Further, by way of an absolute bar, a fine may not be imposed if no proposal has been made to the Market Court within 10 years of:

the date of the infringement; or
the date on which the infringement ended in the case of a single and continuous infringement.

Investigative measures by the FCCA reset the limitation period, which starts anew. Further, investigative measures by the European Commission or a competition authority of another EU member state in a case will suspend the running of the limitation period. The suspension starts from the date on which the first investigative measure is notified to at least one undertaking, or to an association of undertakings, that is subject to the investigation. However, even in the case of investigative measures by the European Commission and/or a competition authority of another EU member state, the absolute bar of 10 years applies to the FCCA's fine proposal. This period is calculated from either:

the date of the infringement; or
in case of a single and continuous infringement, from the date on which the infringement ended.

The application of Section 19 of the Competition Act and the statute of limitations to a bidding cartel were clarified in 2021 by the Supreme Administrative Court, following a preliminary ruling rendered by the Court of Justice of the European Union (CJEU) (see Case C-450/19, Eltel Group Oy/Eltel Networks Oy). In accordance with the interpretation of the CJEU, in a bidding cartel, an infringement comes to an end when the essential elements – in particular, the overall contract price – of the works contract have been definitively determined.

3 Investigations – general

3.1 On what grounds may the enforcement authorities commence an investigation?

The Finnish Competition and Consumer Authority (FCCA) may initiative an investigation into a suspected cartel:

following a tip-off;
following an immunity application; or
on its own initiative.

3.2 What investigatory powers do the enforcement authorities have in conducting their investigation?

Investigations are primarily conducted by the FCCA. While the Regional State Administrative Agency is empowered to conduct investigations, in practice, it is rarely involved in competition law enforcement.

When investigating a suspected cartel infringement, the FCCA is empowered to conduct unannounced inspections at company premises. As part of these inspections, FCCA officials are empowered to:

request access to all business premises, including land, warehouses and company vehicles;
examine all business records relating to the scope of the suspected infringement;
make copies of records that may be relevant to the investigation;
request oral explanations from company officers and employees, and record the answers given; and
seal off business premises or records for the duration of the inspection.

The FCCA may request assistance from the police in conducting an inspection. As of June 2019, the FCCA also has the right to continue an electronic inspection (ie, of data held in electronic format) at the FCCA's premises.

Further, the FCCA (and the Regional State Administrative Agency) can conduct searches of private premises, including vehicles, if there are reasonable grounds to suspect that booking-keeping records or other business records relating to the scope of the investigation, which may be relevant for establishing a serious antitrust infringement are being kept at such other premises. Before a search of private premises can be conducted, prior authorisation must be obtained from the Market Court.

Finally, the FCCA may also investigate a suspected cartel by:

sending written requests for information to companies;
ascertaining market conditions through written inquiries; or
hearing any party that may have information relating to a suspected infringement.

3.3 To what extent may the enforcement authorities cooperate with their counterparts in other jurisdictions during their investigation? How common is such cooperation in practice?

The FCCA cooperates with:

the competition authorities of the other Nordic countries (Sweden, Norway, Denmark and Iceland);
the European Commission and the competition authorities of other EU member states (through the European Competition Network (ECN));
the Organisation for Economic Co-operation and Development Competition Committee; and
the International Competition Network.

In addition, the FCCA takes part in the European Competition Authorities network, which focuses specifically on merger control issues.

The Nordic countries have concluded an Agreement on Cooperation in Competition Cases, which seeks to enhance the exchange of information and the investigation of competition restrictions. The agreement empowers participant countries to assist each other in the conduct of inspections and to exchange information among themselves – even confidential information. Any information gathered and exchanged can be used as evidence of a restriction on competition in the receiving country.

Within the context of the ECN, EU member states can allocate the investigating national competition authority among themselves. Consequently, the FCCA may be assigned a case that was initiated by an authority in another EU member state or by the European Commission. The EU member states also help each other with investigations by assisting in the conduct of inspections and by sharing information via the ECN. In accordance with the rules introduced by the so-called ECN+ Directive (transposed into Finnish law in June 2021), the FCCA is empowered to carry out inspections in Finland at the request of competition authorities of other EU member states and to receive records from other EU member state(s) which are unavailable in Finland.

3.4 Is there an opportunity for third parties to participate in the investigation?

Third parties may provide tip-offs to the FCCA regarding suspected cartel infringements. It is also possible to lodge a complaint to the FCCA regarding a suspected cartel infringement. However, in the latter case, the FCCA is not obliged to initiate an investigation – for instance, due to lack of evidence or for reasons of prioritising its resources and investigation efforts.

3.5 What are the general rights and obligations of the enforcement authorities during the investigation?

The FCCA is empowered to inspect premises, warehouses, land and means of transport controlled by a company, and other premises (including private residences and means of transportation), if there is a reasonable suspicion that records may be stored at such premises and the records may be relevant in establishing a serious competition law infringement. The FCCA shall, at the request of the European Commission, conduct an inspection in accordance with EU competition rules.

In the context of an inspection, the FCCA has the right to:

take copies of physical and electronic records;
request oral explanations from company officers and employees;
seal off business premises or records for the duration of the inspection; and
obtain assistance from the police, if required.

The FCCA has also the right to investigate datasets controlled by external IT service providers and to receive information directly therefrom.

The FCCA must:

limit its investigative powers to the scope of the investigation, as determined in the inspection decision; and
respect records to which legal professional privilege or privacy attaches.

The FCCA can use any records retrieved only for the purpose for which they have been collected. Further, the FCCA must inform the company of its position in the investigation and the nature of the suspected infringement in general terms, without jeopardising the investigation. Finally, the FCCA may not request a company to provide information which may lead to an admission of guilt (ie, the protection against self-incrimination).

3.6 What are the general rights and obligations of the target company during the investigation?

The target company must submit to the investigation, including by allowing FCCA or Regional State Administrative Agency officials, as well as officials of the European Commission and/or of other EU member state competition authorities, access to its business premises (including warehouses, storage and vehicles), and its business records that fall within the scope of the investigation, irrespective of the medium in which such records are held and stored (electronic or physical). Company representatives and employees must also answer oral requests made by the investigating officials.

The target company has the right to be informed of its position in the investigation and the stage of the proceedings, unless this may harm the conduct of the investigation.

The company and its officers and employees involved in the investigation have the right to refrain from giving access to materials to which legal professional privilege or privacy applies, and, in replying to FCCA's questions, to refrain from providing any self-incriminatory replies. Further, individuals involved in an investigation are not obliged to provide the FCCA with specific categories of information that amount to personal data or personal information relating to prior criminal convictions and violations.

The target company is entitled to follow the FCCA's investigation and request assistance from external legal counsel. In the context of an inspection, the company can present its views on the material recovered and challenge the FCCA's endeavours to retrieve materials covered by legal professional privilege or privacy. Finally, the company has the right to be heard prior to the FCCA adopting a finding of infringement of the Competition Act, including Article 101 of the Treaty on the Functioning of the European Union, and before a proposal is made to the Market Court for the imposition of a fine (in practice, a decision finding a competition law infringement is accompanied by the FCCA's proposal for a fine).

3.7 What principles of attorney-client privilege apply during a cartel investigation?

A company that is subject to a competition law investigation is under no obligation to disclose documents that contain confidential correspondence with external legal counsel. The FCCA has the right to glance at such documents (eg, the letterhead) to satisfy itself that the particular document is covered by legal professional privilege.

3.8 Are details of the investigation publicly announced? If so, what principles of confidentiality apply?

The FCCA publishes on its website its decisions in antitrust cases, among others (ie, both prohibition and commitment decisions, and proposals to the Market Court for the imposition of a fine). The decisions of the Market Court are also available online.

According to the Act on the Openness of Government Activities (621/1999), everyone has the right to obtain information on an authority document, which is public. While the FCCA decisions are public, non-confidential versions – from which party-specific business secrets and other confidential information have been removed – are only made public on the authority's website. Materials that form part of the FCCA's investigation, including immunity and leniency applications and any corporate statements related thereto, as well as materials and records retrieved in the course of an inspection, are confidential and are not publicly available to third parties.

Further, the parties involved in an investigation have the right to access the FCCA's file once confidential information has been redacted. Limitations also apply to the use of information contained in corporate statements and submitted as part of an immunity or leniency application. Only the parties to an investigation have the right to access corporate statements, and then only for the purpose of exercising their rights of defence.

4 Investigations – step by step

4.1 What initial steps do the enforcement authorities take to commence a cartel investigation?

The Finnish Competition and Consumer Authority (FCCA) can become aware of anti-competitive conduct:

through tip-offs made to the authority;
through the submission of a complaint;
following an immunity application; or
based on its own investigation.

Before the FCCA conducts an unannounced inspection (dawn raid), it typically seeks to confirm the information it has received or has at its disposal regarding the suspected competition infringement (this does not apply to inspections carried out pursuant to an immunity application). If the FCCA considers there are insufficient indications and grounds to suspect anti-competitive conduct, it will conduct an inspection and initiate an investigation.

If the FCCA has received an immunity application, it will already have significant information at its disposal regarding the suspected infringement. This will facilitate its preparation for, and conduct of, an inspection

4.2 Are dawn raids commonly conducted in your jurisdiction? If so, what are the pre-conditions for conducting a dawn raid? When, where and by whom are they conducted? Do the enforcement authorities have the power to search private as well as company premises?

The FCCA is not among the most active antitrust enforcement agencies. On average, it issues between one and two antitrust decisions annually.

It follows that annually, the FCCA conducts only a limited number of inspections. As (unlike the European Commission) the FCCA does not always publicise the fact that an inspection has been conducted, there is limited information available on the average number of inspections conducted annually. Depending on the companies involved, stock exchange reporting rules may apply, thus requiring the conduct of an inspection to be disclosed. At present, it seems that the FCCA's investigative activities have not picked up after the hiatus caused by the COVID-19 pandemic.

The FCCA will conduct an inspection where it has reasonable grounds to suspect that a company, or an association of undertakings, has partaken in anti-competitive practices. The inspection will be conducted by FCCA officials, who are generally accompanied by IT and forensic experts.

The FCCA may conduct inspections of both business and other premises. An inspection can conducted at company premises, including land, warehouses and company vehicles. An inspection may also be conducted of other premises, such as private residences and private vehicles belonging to company officers and personnel. In the latter case, there must be reasonable suspicions that company business records relating to the scope of the inspection are being kept at such other premises and the records may be relevant in establishing a serious competition law infringement. When an inspection is carried in premises other than company premises, prior authorisation from the Market Court must be obtained.

4.3 What powers do officers have during the dawn raid? Are there any limitations on these powers?

FCCA officials who are carrying out an inspection at company premises are empowered to:

examine the company's physical business records and electronic data records, accounting and other documents and records that may be relevant in investigating the suspected competition infringement, as identified in the FCCA's inspection decision. Thus, in the course of an inspection, FCCA officials can access and copy emails, calendars (electronic/physical), files and documents (both electronic and physical), voice and text messages and other communications, regardless of the medium of storage or the device on which such communications or information are kept or stored;
where information management has been outsourced to a third party (an IT service provider), obtain information directly from such third party;
ask company officers and employees to reveal the contents of lockers, drawers and other physical places where documents and records may be kept or stored (and to search the contents thereof);
request oral explanations from company officers and employees and any other staff members who may have information relevant to the FCCA's investigation;
seal off company premises, books and other documents for the duration of the inspection where necessary to carry out the inspection;
make physical copies of materials as well as an electronic ‘imaging' of electronic data, and continue reviewing such copied electronic materials at the FCCA's offices (however, at the end of the inspection, the temporary electronic copies must be destroyed); and
record answers received from company officers and employees when seeking clarifications to (factual) questions and issues.

4.4 What are the rights and obligations of the target company and any individuals targeted during a dawn raid?

A company must submit to an FCCA inspection. The company, its officers and employees may not seek to obstruct the start of an inspection. While FCCA officials may agree to wait for the arrival of external legal counsel before proceeding with the inspection, they are not obliged to do so.

The company and its representatives must allow FCCA officials access to its premises, including all storage, filing cabinets, offices, servers and IT systems. Company representatives must provide oral explanations at the request of FCCA officials. If information is not known at the time or is not readily available, it may be agreed with the FCCA that answers will be provided later in writing.

In the context of an inspection, the FCCA must observe the rights of defence of the company concerned and the individuals involved. Company officers and employees have the right to refrain from answering questions that are liable to be self-incriminating. Similarly, FCCA officials may not inspect documents and records to which legal professional privilege attaches (communications and advice by external legal counsel), or which contain personal data.

If a company refuses access to its premises despite a decision authorising the conduct of an inspection, the FCCA may impose a fine for a procedural infringement. This fine may also be imposed where:

a seal has been broken;
explanations have not been provided upon request; or
an incorrect, incomplete or misleading explanation given during inspection is not subsequently rectified or supplemented.

A fine for procedural infringement can amount to up to 1% of the company group's aggregate worldwide turnover in the financial year preceding the proposal for the imposition of a fine (any fine is imposed by the Market Court upon the FCCA's proposal).

4.5 What evidence can be seized during a dawn raid? Do the enforcement authorities have the power to interview witnesses and take statements during a dawn raid?

During an inspection, FCCA officials may seize physical and electronic documents and records:

that relate to the scope of the investigation;
to which legal professional privilege does not attach; and
which do not contain private data (eg, medical records and similar).

The FCCA has the power to make a temporary electronic copy of computer hard drives using forensic IT tools. Accordingly, aside from paper notes, calendars and other information in physical format, the FCCA may also retrieve emails, electronic calendars, other electronic files, text messages and messages exchanged through other messaging platforms (eg, WhatsApp).

FCCA officials can question company representatives (officers and employees) during an inspection. The individuals concerned have the right to refrain from answering questions that are liable to self-incriminate – that is, where a reply would result in an admission of the company's involvement in anti-competitive practices. FCCA officials can request any company officer and employee (and any representative of an association of undertakings) or any other staff member to provide facts, including relating to any records retrieved, provided that the request for clarification relates to the scope of the investigation. FCCA officials may record the answers provided.

The FCCA has the power to review (or continue reviewing) electronic materials at the FCCA's offices. In this case, any temporary electronic copy that the FCCA has made of the company's hard drives, servers and other IT systems must be destroyed at the end of the inspection. The obligation to destroy temporary electronic copies also applies where the electronic inspection is not continued at the FCCA's offices.

4.6 How can a company best prepare itself for dawn raids? What best practices should it follow in the event of a dawn raid?

The best preparation is to ensure that conduct by company officers and staff is always compliant with competition law. To this effect, company officers and employees should be trained in the applicable competition rules. They should thus:

be provided with regular updates; and

have easy access to:
- a competition law compliance manual; and
- a dedicated contact (in-house counsel and possibly also external competition law counsel) whom they can turn to for advice in specific circumstances.

It is recommended that a company have in place procedures in case of an unannounced visit by a competition authority. These may include:

separate instructions for reception personnel;
a list of persons to be notified and contacted in case competition authority officials seek access to company premises;
instructions on possible media inquiries;
instructions on internal and external communications; and
importantly, instructions on conduct and steps to be followed during an inspection.

These procedures should be periodically reviewed – for instance, to reflect possible changes in personnel; and company officers and employees should regularly review the competition rules and instructions.

It is also possible to simulate an unannounced competition inspection – for instance, with the assistance of external legal counsel. Further, a company may familiarise itself with forensic search tools.

In the event of a dawn raid, it should be clear to reception and company officers whom to inform and contact should competition officials request access to company premises (the relevant company officers and external legal competition counsel should be informed of this and requested to make themselves available for the inspection).

Finally, it should be ensured that a sufficient number of company personnel and external lawyers, who will assist in the investigation on the company's behalf, are available for the entire duration of the inspection.

4.7 What are the next steps in the cartel investigation following a dawn raid? What timeframe do these typically follow?

Once a dawn raid has been conducted (which may itself take several days), the FCCA will review and analyse the records and materials discovered during the inspection. If the inspection of electronic data has continued at the FCCA's offices based on a temporary copy of the dataset, the FCCA will finalise the inspection and then destroy the temporary electronic copies. Further, in due course, the FCCA may request clarifications and further information and records through a formal request for information; and can also request that company representatives be heard. The FCCA may even conduct a new inspection at the company's premises.

The process of analysing materials and records retrieved on the basis of investigative measures may be lengthy, depending in part on the number of companies involved in the investigation and the volume of materials recovered by the FCCA.

Once the FCCA has completed the analysis of the materials in its casefile and conducted all supplementary investigative measures, it will decide how to proceed. If the FCCA considers there is sufficient evidence to establish anti-competitive practices, it will draft and issue a statement of objections (in Finland, this is known as a ‘draft decision').

The collection, review and analysis of evidence typically takes several years. There is no statutory timeframe for the FCCA to issue a draft decision or a final decision. However, the statute of limitations applies to the proposal and to the imposition of a fine.

4.8 What factors will the enforcement authorities consider in assessing whether cartel activity has taken place?

The FCCA will evaluate all information and evidence in its casefile in light of the applicable legal criteria for anti-competitive practices to conclude whether there is sufficient proof to establish a competition infringement.

4.9 In case of a finding of cartel activity, can the company seek to negotiate a settlement, plea bargain or similar resolution? If so, what is the process for doing so?

The Competition Act does not foresee the possibility of a settlement procedure or plea bargaining. A commitment procedure is possible in accordance with Section 10 of the Competition Act; however, in accordance with FCCA practice, it is understood that the commitment procedure is not possible with respect to the most serious competition infringements, such as cartels.

5 Leniency

5.1 Is a leniency programme in place in your jurisdiction? If so, how does this function?

The Competition Act foresees that companies which partake in cartels may obtain immunity from or a reduction in fine if they reveal the anti-competitive practice to the Finnish Competition and Consumer Authority (FCCA).

Immunity from fines is possible in two circumstances:

pre-inspection, where the applicant provides sufficient evidence that allows the FCCA to conduct an inspection; and
post-inspection, where the evidence provided allows the FCCA to find an infringement of Section 5 of the Competition Act or Article 101 of the Treaty on the Functioning of the European Union.

In both instances:

a corporate statement and evidence must be submitted to the FCCA; and
the FCCA must receive the relevant information before obtaining it from other sources.

Leniency is possible where:

immunity is no longer available, either because it has been conditionally granted to another applicant or because the FCCA has already initiated its investigation; and
the applicant provides the FCCA with information and evidence (together with a corporate statement) which are significant in establishing the extent or nature of the infringement.

As in the case of immunity, a further requirement is that this information be submitted to the FCCA before the latter receives it from other sources.

A company that has coerced another company (or companies) to participate in a cartel cannot benefit from immunity or leniency.

5.2 What are the benefits of applying for leniency, both for the first mover and for subsequent applicants?

The first company to provide the requisite corporate statement and supporting evidence will avoid a fine, notwithstanding its participation in a cartel. Subsequent applicants can benefit from a reduction in the amount of the fine. The reduction bands are as follows:

30–50% for the first leniency applicant;
20–30% for the second leniency applicant; and
a maximum of 20% for each subsequent applicant.

5.3 What steps does a leniency application involve? What timeframe do these typically follow?

A prospective immunity applicant can make an anonymous inquiry – typically through its external legal counsel – to ascertain whether immunity is still available (for this purpose, the industry sector must be identified in broad terms and disclosed to the FCCA).

If a company decides to make an application for immunity or leniency, it must submit a corporate statement. This is a written or oral statement or recording made on behalf of the company which has been explicitly prepared in the context of the immunity or leniency programme, and through which the company provides information at its disposal regarding the cartel, including its own involvement therein. The statement must also contain:

contact details;
information on other cartel participants;
a detailed description of the cartel's operation, including the goods or services involved, the geographical reach of the cartel, and its duration and nature;
a description of how the cartel was formed and implemented; and
information on whether immunity or leniency applications have been made to other competition authorities, or whether there is an intention to make such applications.

The corporate statement must be accompanied by supporting information and evidence on the anti-competitive practices. In this context, contemporaneous evidence (eg, emails, text messages and similar) which was not drafted or prepared for the purposes of the leniency application will have significant value and importance.

When applying for immunity from a fine, it is also possible to request a marker – that is, additional time to collect the information and evidence required for the application. The FCCA will specify a timeframe within which the information must be submitted; provided that this timeframe is respected and full information is submitted within the timeframe, the marker applicant will have priority vis-à-vis other possible applicants. The marker is possible only with respect to an application for immunity.

5.4 What are the rights and obligations of the applicant during the leniency application and over the course of its cooperation with the enforcement authorities?

An applicant is obliged to cease participation in the anti-competitive practices when it applies for immunity or leniency. By way of an exception, the FCCA may require that an applicant continue its involvement and participation in the practices so as to ensure the secrecy of the investigation before an inspection is carried out.

Further, an applicant is subject to an extensive duty of cooperation, which requires genuine, continuous and comprehensive cooperation with the FCCA, aimed at assisting the FCCA in conducting its investigation and in finding an infringement.

As regards an applicant's rights, by submitting an application for immunity or leniency, it forgoes the right against self-incrimination. An applicant may also decide to submit evidence which is protected by legal professional privilege. An applicant may still require that the confidential nature of its information and documents be respected, as regards both the other companies involved in the anti-competitive practices and the investigation and third parties. Similar considerations apply to the protection of personal data.

5.5 Is the leniency programme open to individuals? Can employees or former employees benefit from a leniency application filed by their employer? Do the authorities operate a programme for individual whistleblowers separate to the leniency programme?

Leniency is not available to individuals in Finland. This reflects the fact that the Competition Act applies only to legal persons. A natural person may incur (criminal) liability only if false or misleading information has been provided to the FCCA, which is an offence pursuant to the Criminal Code of Finland (39/1889, as amended).

5.6 Can leniency be denied or revoked? If so, on what grounds?

Applications for immunity and leniency may be revoked. If a company fails to comply with the obligation to cooperate with the FCCA during the investigation, its application may ultimately be refused.

An applicant is obliged to engage in genuine, continuous and comprehensive cooperation with the FCCA. In addition to the requirements for the initial application, this includes the following requirements:

to submit promptly all information in the company's disposal (and information which may subsequently become available);
to make company officers and employees (including former officers and employees, if possible) available to the FCCA for the purposes of the investigation;
to answer promptly and fully the FCCA's requests for information;
not to obstruct the investigation;
not to have destroyed, falsified or hidden evidence before submission of the immunity or leniency application;
to immediately cease participation in the anti-competitive practices (unless specifically requested by the FCCA not to withdraw from the infringing conduct for fear of revealing the investigation); and
to refrain from disclosing the fact that it has applied for immunity or leniency, or the contents of its application, to any third parties, including other cartel participants (disclosure of this information to other competition authorities is permissible).

The obligation to cooperate extends from submission of an application for immunity or leniency until the FCCA has concluded its investigation with respect to all suspected participants, either by issuing a decision or by making a proposal to the Market Court for the imposition of fines.

6 Penalties and sanctions

6.1 What penalties may be imposed in criminal proceedings on companies? What penalties may be imposed on individuals?

The Competition Act provides for the imposition of administrative sanctions on legal persons. Accordingly, aside from the criminal offence of providing false or misleading information to the Finnish Competition and Consumer Authority (FCCA), , there are no criminal proceedings or criminal penalties for an infringement of Section 5 of the Competition Act or Article 101 of the Treaty on the Functioning of the European Union (TFEU).

No sanctions may be imposed on individuals, except in relation to the provision of false or misleading information, which is a criminal offence with personal liability pursuant to Chapter 16, Section 8 of the Criminal Code of Finland (39/1889, as amended).

6.2 What penalties may be imposed in civil proceedings on companies? What penalties may be imposed on individuals?

The Competition Act foresees the imposition of administrative fines, which apply only to legal persons. The Finnish competition law regime does not provide for the imposition of penalties on individuals, except in relation to the submission of false or misleading information.

A fine may be waived if the infringement is considered minor or if the imposition of a fine is otherwise not deemed justified. Further, a company may benefit from a total or partial reduction in fine in accordance with the immunity and leniency policy.

6.3 How are penalties in cartel cases determined? In deciding on the applicable penalties, will the enforcement authorities consider penalties imposed in other jurisdictions?

The maximum amount of a fine in case of an infringement of Section 5 of the Competition Act or Article 101 TFEU is 10% of the infringing company's group aggregate worldwide turnover (the FCCA applies the turnover from the financial year preceding its proposal for a fine).

The amount of the fine is based on an overall assessment in which relevant factors include:

the nature of the infringement; and
the extent and duration of the infringement.

Further to the latest amendments to the Competition Act in 2021, the methodology for setting fines has been incorporated into Finnish law and closely mirrors the European Commission's fine-setting guidelines.

As a first step, the basic amount is identified. This is at most 30% of the value of the sale of goods or services to which the infringement relates during the last calendar year in which the company was involved in the anti-competitive practices. As regards price, market-sharing and capacity-setting cartels, a share exceeding 15% is applied as a general rule. The basic amount is then multiplied by the number of years for which the infringement continued. A deterrent factor of 15–25% at most may be applied in case of the most serious infringements.

Possible adjustments to the amount may also be made to reflect aggravating or mitigating factors (eg, repeat offences; the continuation of anti-competitive practices after the FCCA's investigation; or minor involvement in the infringement). The amount so identified will be further adjusted in case of leniency; and potential inability to pay may be taken into consideration.

6.4 Can a defendant company pay the legal costs incurred by and/or penalties imposed on its employees?

A defendant company can decide to cover the legal fees incurred by its personnel in a cartel investigation and to cover the costs of penalties imposed on company officers or employees (in principle, these would be limited to criminal fines for the provision of false or misleading information). Fines imposed pursuant to the Competition Act are of an administrative nature. Criminal sanctions attach only to procedural infringements (providing false or misleading information) pursuant to the Criminal Code of Finland (39/1889, as amended).

7 Appeal

7.1 Can the defendant company appeal the enforcement authorities' decision? If so, which decisions of the authority can be appealed (eg, all decisions or just the final decision) and to which reviewing authority? What is the standard of review applied by the reviewing authority (eg, limited to errors of law or a full review of all facts and evidence)?

Where the Finnish Competition and Consumer Authority (FCCA) applies Article 101 of the Treaty on the Functioning of the European Union (TFEU) and/or the national equivalent (Section 5 of the Competition Act), the FCCA will make a finding on the anti-competitive nature of the conduct and submit a proposal to the Market Court for the imposition of a fine in accordance with Section 12 of the Competition Act. As such, the Competition Act essentially foresees a two-tier institutional framework for antitrust cases.

In the context of deciding on the FCCA's proposal for a fine, the Market Court will review the merits of the FCCA's infringement decision, including its findings and the evidence on the anti-competitive conduct.

As part of its decision finding conduct that is contrary to Article 101 TFEU and/or the national equivalent, the FCCA may:

order, by decision, that the company involved cease the unlawful conduct; and
impose binding commitments aimed at eliminating the competition restrictive effects of the conduct.

The FCCA's decisions may be appealed by the defendant company to the Finnish Market Court.

A decision of the Market Court (as above, although also including the imposition of a fine) may be appealed to the Supreme Administrative Court, as prescribed in the Administrative Judicial Procedure Act (808/2019). Separate leave to appeal is not required in competition cases. The judgment of the Market Court will be enforced pending appellate proceedings before the Supreme Administrative Court, unless the latter rules otherwise. A judgment of the Market Court can be appealed on both points of law and facts.

The appellate court can review all facts and evidence.

7.2 Can third parties appeal the enforcement authorities' decision, and if so, in what circumstances?

In accordance with the Administrative Judicial Procedure Act (808/2019), an appeal against an administrative decision may be lodged by a party to which the decision relates or whose rights, obligations or interests are directly affected by the decision. However, a specific feature of the public enforcement of competition law in Finland is the restrictive interpretation of the scope of persons entitled to appeal. By way of example, the right to appeal has been consistently denied with respect to third parties that have suffered damages as a result of the anti-competitive conduct. It follows that the right to appeal in antitrust cases is narrower in Finland in comparison to, for instance, the right to appeal a decision of the European Commission.

8 Private enforcement

8.1 Are private enforcement actions against cartels available in your jurisdiction? If so, where can they be brought?

The EU Antitrust Damages Directive (2014/104/EU) was transposed into national law through the Act on Antitrust Damages (1077/2016), which applies, among other things, to damages resulting from an infringement of Article 101 of the Treaty on the Functioning of the European Union and its national equivalent.

As a general rule, civil proceedings must be instituted before the district court at the place of domicile of the defendant. There are 20 district courts in Finland. In case of an action for damages against a Finnish branch of a foreign company, proceedings may also be instituted in the district court at the place where the branch operates.

8.2 Can private enforcement actions be brought against both companies and individuals?

The Act on Antitrust Damages (1077/2016) sets out the right of an injured party (legal or natural person) to seek compensation from an undertaking or association of undertakings. Liability for damages in antitrust cases therefore lies only with legal persons, to the exclusion of natural persons. The Finnish legal system does not foresee personal liability for natural persons involved in antitrust infringement, with the exception of personal criminal liability for the provision of false or misleading information.

8.3 Are class actions or other forms of collective action available in your jurisdiction?

The Act on Class Actions (444/2007) was enacted in 2007, but it has never been applied in practice: no class action has been raised to date. This may be explained by the fact that, in accordance with the Act on Class Actions, the Finnish Consumer Ombudsman has exclusive standing to bring a class action and to exercise the right of a party (plaintiff) in a litigation.

The Act on Class Actions aside, the Code of Judicial Procedure (1734/4) allows separate actions to be joined. Thus, in practice, there have been several cases in which multiple claimants brought separate actions for damages against one or more defendants relating to the same antitrust infringement and, while the claims were separate, the actions were joined for the purposes of the judicial proceedings. By way of example, in the raw wood cartel, more than 600 individual actions for damages were brought against forestry companies found to have partaken in anti-competitive practices in the market for raw wood. (The claimants were ultimately unsuccessful, as the actions for damages were dismissed by the Supreme Court in 2019.)

8.4 What process do private enforcement actions follow?

Actions for damages in antitrust infringement cases follow the civil procedure rules, which are set out in the Code of Judicial Procedure (1734/4); the Act on Antitrust Damages also contains certain procedural rules. The Act on Antitrust Damages cover matters such as:

the binding effect of an infringement decision (a decision of the FCCA, a judgment of the Market Court or the Supreme Administrative Court, or a final decision by a competition authority of another EU member state) in subsequent damages proceedings; and
evidence.

8.5 What types of relief may be sought and what types of relief are most commonly awarded? How is the relief awarded determined?

Damages caused by a cartel infringement are financial losses. The premise of the Act on Antitrust Damages is that an injured party must be entitled to full compensation for damage sustained as a result of anti-competitive practices. Thus, compensation can be claimed for actual damages, lost profits and interest. A presumption of harm applies in cartels – that is, it is presumed that cartels cause harm and it is up to the defendant to establish that no harm has in fact been sustained. If a prior authority decision exists on the antitrust infringement (by the FCCA, the Market Court or the Supreme Administrative Court), the injured party must establish the quantum of damages at trial.

8.6 Can the decision in a private enforcement action be appealed? If so, to which reviewing authority?

A district court judgment in an antitrust damages case can be appealed to the competent court of appeal (there are five courts of appeal in Finland). A further appeal lies to the Supreme Court, though this requires separate leave to appeal. The Supreme Court is the final appellate body in damages cases.

9 Trends and predictions

9.1 How would you describe the current cartel enforcement landscape and prevailing trends in your jurisdiction? Are any new developments anticipated in the next 12 months, including any proposed legislative reforms?

In recent years, the Finnish Competition and Consumer Authority (FCCA) has issued a very limited number of cartel decisions – on average, one to two each year. Consequently, the number of cases in which the Market Court has been called upon to decide on fines is also limited. At the same time, in cases where Section 5 of the Competition Act or Article 101 of the Treaty on the Functioning of the European Union has been infringed, the FCCA has proposed high fines in relative terms, at the maximum end of the fining scale (10% of group aggregate worldwide turnover). However, since the companies involved have generally been small in terms of turnover and operations, the fines have not been significant in monetary terms. It remains to be seen how the FCCA's fining practice will evolve following the introduction of fining guidelines to the Competition Act as part of the amendments that entered into force in June 2021.

Proceedings before the FCCA tend to be lengthy and investigations of up to five years are not unusual. The FCCA has proclaimed that it will focus on the most serious competition law infringements (ie, cartels); but this has not yet been reflected in the number of decisions issued or investigations opened. In comparison to some other competition authorities within the European Union, investigation activities have seemingly not fully picked up again after the hiatus of the COVID-19 pandemic.

The number of private enforcement cases is also low. The threshold for establishing the causal relationship between the infringement and the loss incurred is very high. Following the introduction of changes to the law by the ECN+ Directive, there is no longer a requirement to establish an infringement in case of follow-on actions for damages. To reflect the transposition of the ECN+ Directive in June 2021, the FCCA has revised its memorandum on investigative powers and the guidance on leniency applications.

At present, there have been no new developments and no legislative changes are expected in the antitrust field in the next 12 months.

10 Tips and traps

10.1 What would be your recommendations to companies faced with a cartel investigation and what potential pitfalls would you highlight?

Companies faced with an investigation by the Finnish Competition and Consumer Authority (FCCA) should be prepared for a relatively lengthy process.

Once a draft decision has been issued, it is possible that the FCCA may refine its findings as regards the scope and duration of the alleged infringement in light of replies to the draft decision. The Market Court will review the FCCA's decision in assessing the proposal for a fine; as a court of first instance, it will apply strictly evidentiary rules and require that the FCCA have presented sufficient evidence in support of its findings on anti-competitive practices.

The newly introduced fine calculation rules in the Competition Act may help companies to anticipate the financial consequences of an FCCA prohibition decision. Although fines in Finland have traditionally been low, there may be pressure to increase them – which indeed has been the trend in recent cartel cases. The new fine calculation provisions in the Competition Act may contribute to these aspirations in public cartel enforcement policy.

Third parties, such as complainants, have limited possibilities to partake in the investigative process and cannot in practice appeal the FCCA's infringement decisions. Further, even for parties involved in the FCCA's investigation, there is limited scope to challenge procedural irregularities during the investigation, there being no framework for a hearing officer in the Finnish proceedings. Consequently, issues of procedural irregularities can only be raised before the Market Court in the context of the FCCA's proposal for a fine.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

Finland: Cartels Comparative Guide