Amendments that apply to the assessment of the penalty payments imposed for infringements have been made to the Competition Act. At the same time, the powers of the Finnish Competition and Consumer Authority (FCCA) will also be extended. The amendments are largely based on the so-called ECN+ Directive. In addition, amendments based on national needs have been made to the provisions on assessing the amount of the penalty payment imposed for an infringement.
The aim of the ECN+ Directive is to enhance and harmonise the application of the competition rules of the EU in the Member States and thus improve the functioning of the internal market. The amendments made to the Competition Act on the basis of the Directive apply, among other things, to the interviews conducted by the FCCA, its requests for information and inspection powers. Similarly, the provisions on immunity from penalty payments and reduction of penalty payments have been revised to ensure the effective functioning of the system throughout the EU.
A central amendment to the Competition Act introduced by the Directive is the assessment of the amount of the penalty payment for associations of undertakings, such as trade associations. In the future, when the amount of the penalty payment is assessed, the turnover of the business undertakings that are members of the association of undertakings can be taken into account. In addition, the members of the association of undertakings may, under certain conditions, be liable to pay the penalty payment imposed on the association of undertakings if it is unable to pay it itself.
Closer international cooperation and new sanctions
With the amendments to the Competition Act, cooperation with the national competition authorities of the EU Member States will be further intensified. The revised rules will enable cross-border notification and enforcement of fines and periodic penalty payments, and inspections carried out at the request of another Member State.
What is also new is that a penalty payment can in the future be imposed on a company not only for a restraint on competition but also for certain procedural infringements in conjunction with company inspections and other investigative measures taken by the FCCA. An important reform resulting from the Directive is also the power given to the FCCA to propose that the Market Court should impose structural corrective measures. For example, these could mean an obligation to sell certain business operations or shares.
The amount of penalty payments will be more predictable
Amendments have been made to the Competition Act to specify the calculation of penalty payments imposed for an infringement. The amendments are aimed at increasing the predictability and consistency of the penalty payments proposed by the FCCA and equal treatment of companies. It will be easier for companies to assess the amount of the penalty payment resulting from the infringement, which will more efficiently prevent them from embarking on an activity involving restrictions of competition and continuing it.
With the new calculation rules, the level of the penalty payments proposed by the FCCA is likely to be closer to the level applied by the Commission. The amendment may raise especially the penalty payments proposed for the most serious and long-term infringements. The rules for calculating the new penalty payments will be applied only by the FCCA, not by the Market Court or the Supreme Administrative Court. The courts retain extensive discretion in assessing the amount of the penalty payment.
More effective markets for the benefit of consumers through effective enforcement
The legislative amendment will enhance the monitoring of competition restraints and improve the preventive influence of the competition rules. Effective enforcement is essential from the point of view of consumers and the economy, as a well-functioning market keeps the price level under control and provides options to customers. Competition encourages companies to make new innovations and offer consumers better products at an affordable price. Competition in the domestic market also makes companies stronger, allowing them to do better in international competition and expand beyond their domestic market.
On the subject previously:
Juuli Broms, Head of Research, tel. +358 29 505 3709