Contacts and requests for action regarding shortcomings in competitive neutrality may overwhelm the FCCA to the extent that it will be unable to devote sufficient attention to important matters (major impact on the proper function of competition).
It is for this reason that Chapter 4 a of the Competition Act includes a provision for prioritising tasks and making a decision to not investigate a case. The FCCA will not investigate a case if it is unlikely that an operating model or operating structure specified in Section 30 of the Act will have a major impact on the conditions for healthy and functional competition.
The decision to not investigate must be made immediately.
When assessing the prioritisation of cases and the conditions for not investigating a case, the FCCA asks the following questions:
- Does the case fall within the scope of competitive neutrality provisions?
- Taking into consideration evidence already in possession and yet to be obtained, what is the likelihood that the case involves a significant prevention or distortion of competition or a failure to meet the requirement for market-based pricing.
- Is the lack of competitive neutrality being directed at a new, innovative or more effective undertaking entering the market?
- Does intervention in a neutrality problem lead to identifiable benefits in safeguarding competition?
- Does the case involve the need for interpretation, even if the immediate economic impact of the neutrality problem would seem to be minor?
- Is another authority, such as one that oversees the entity in question on the basis of special legislation, a better alternative for rectifying the situation?
- Is the market in a transitional phase to the extent that intervening in a case involving restraints on competition would fail to produce the desired result?
- Do the FCCA's previous reports show that intervening in the problem is not necessary to safeguard competition?
- Is the case more a matter of a conflict between undertakings than the safeguarding of competition and could the matter be resolved as a civil dispute, such as under the Unfair Business Practices Act?
- Has the party submitting the request for action provided information as to the grounds for his/her demands and otherwise contributed to the clarification of a matter, as stipulated in Section 31(2) of the Administrative Procedure Act (particularly in situations where the primary focus is meeting the interests of the party submitting the request for action)?
A decision made by the FCCA to not investigate can be appealed in the Market Court. If the Market Court deems that the requirements for not investigating a case have not been met, it may return the case to the FCCA for reconsideration.
Division into impact classes
In the investigation of competition restraints, the FCCA divides cases into three different impact classes. Cases involving competitive neutrality should also be divided into impact classes, using some of the same principles, because it makes it easier for the FCCA to focus its efforts on key cases.
As stipulated in Chapter 4 a of the Competition Act, the FCCA places cases to be investigated in the following impact classes (with remarks stating that the classification can be changed as experience in application of the law accrues):
- Impact class 1
(major cases, which are thoroughly investigated and given top priority).
- The problem is related to a large volume of operations or is significant in principle
- The primary purpose of the operating model in question is to prevent or distort competition
- The operating model in question has a significant detrimental impact on competition, without any clear justification related to public interest
- The operating model or operating structure is in clear violation of EU state aid provisions, with impacts also on the Finnish market (cf. HE 40/2013 p. 25 and 33 as well as the objectives for amendment of the Competition Act on page 21 )
- Impact class 2
("grey area", i.e. potentially significant cases, in which negative impacts on competition and the their graveness can usually only be determined after an investigation and analysis of benefits and costs).
- The problem is related to economically important activities
- Large volume of operations
- Significant effect on the business activities of trade partners and competitors
- Significant price, quantity and quality impacts on the market
- Impact class 3
(negative competition impacts are not likely, i.e. cases are not investigated thoroughly).
- No naked intent to distort or prevent competition
- Not significant in principle
- Low volume of operations
- Insignificant price, quantity and quality impacts on the market