The Finnish Competition and Consumer Authority (FCCA) proposes that the Market Court impose a penalty payment of EUR 900,000 on Valio Ltd. Valio has not complied with its commitment to protect the price information of competing manufacturers in connection with its acquisition of Heinon Tukku.
In 2021, the FCCA gave conditional clearance for a concentration in which Valio acquired Heinon Tukku, a foodservice wholesaler. The acquisition could not be approved as such, as Valio would have been provided with information related to the pricing of competing food manufacturers through Heinon Tukku, which would have affected Valio’s incentives in its own pricing. The access to pricing information would have restricted competition between manufacturers in the sale of products to foodservice customers, such as hotels, cafés and restaurants, and public institutions.
In order to eliminate the competition problem, Valio undertook to protect the confidential information of its competitors so that it would not be passed on within the organisation to the persons responsible for pricing Valio’s products. Protection of the information was implemented with information system boundaries, and an independent trustee was appointed to monitor compliance with the commitments.
FCCA proposes a penalty payment for breaching the main condition of the acquisition
Valio informed the FCCA at the end of 2022 that it had detected an error in protecting the price information of competitors. Due to an error in the information system firewall, the staff of Valio Aimo, who handle the sales to foodservice customers, had access to the price information of Valio’s competitors for several months.
In the view of the FCCA, Valio has not complied with the main condition for approving the acquisition, which prevents the price information of competitors from being transmitted in a manner that has a negative impact on competition.
The FCCA proposes a penalty payment of EUR 900,000 on Valio for the breach. The Market Court will decide on the imposition of the penalty payment.
"This is the first time that the FCCA has proposed a penalty payment for breaching the conditions of an acquisition. The effectiveness and credibility of merger control requires that the conditions for acquisitions are complied with and that the authority intervenes effectively in detected breaches."