According to a ruling handed down by the Supreme Administrative Court on 20 August 2019, the pricing recommendations by the Finnish Bakery Federation constitute a serious competition infringement. The pricing recommendations issued by the national trade association sought to increase the prices of bakery products in Finland. According to the Supreme Administrative Court, the Finnish Bakery Federation went beyond what can be considered as conventional communication by a trade association.
The communications by the Finnish Bakery Association encouraged its members to increase prices. Some opinions by the Association contained percentages related to price increases, to their range and to information on the level of price increases planned by other operators in the industry. By issuing such communications, the Finnish Bakery Association sought to increase the price level of bakery products.
The Supreme Administrative Court confirmed that the conduct of the Finnish Bakery Association constituted a serious competition infringement that lasted over three years and aimed at reducing competition. The Supreme Administrative Court increased the penalty payment ordered by the Market Court from EUR 15,000 to EUR 30,000. The FCCA had proposed that the Finnish Bakery Association pay a penalty payment in excess of EUR 40,000.
“The FCCA is satisfied with the fact that the Supreme Administrative Court stated, echoing our proposal, that the Finnish Bakery Association is guilty of a serious restriction of competition, increasing the penalty payment imposed by the Market Court. However, current legislation does not enable a level of fines that would be sufficiently high for trade associations, although pricing recommendations aim at increasing the price level on those markets on which the associations’ members operate. Price recommendations, just like all other cartels, are likely to increase the price paid by consumers and other customers,” says Kirsi Leivo, Director-General of the FCCA.
A directive on the powers of national competition authorities, known as the ECN+ Directive, will make possible the imposition of sufficiently high penalty payments on trade associations as, according to the Directive, the turnover of their members may also be taken into account when establishing the level of the penalty payment.
Supreme Administrative Court decision 3713/2019 (in Finnish)
Market Court imposes fines on the Finnish Bakery Federation for forbidden price recommendations (FCCA's press release 29.2.2016)
Kirsi Leivo, Director-General of the FCCA, tel. +358 (0)29 505 3351
Head of Research Juuli Broms, tel. +358 (0)29 505 3709