In neutrality cases, the FCCA can take action based on requests for action or on its own initiative.
The processing of requests for action typically involve the following primary phases:
- additional report and supplementary requests (if any) are submitted to the party submitting the request for action and additional information is obtained from public sources (preliminary investigation)
- no investigation is to be conducted/actual investigation is launched
- hearing of involved parties
- negotiation concerning elimination of the competition problem
- confirmation of the negotiation result by issuing a decision/order, obligation or prohibition, including setting a fine (if any)(this includes hearing the subject of the procedure).
Procedural deadlines to be observed
The FCCA makes every effort to observe the following deadlines in the investigation of cases:
Within 1 month of receiving the request for action
- Enquiries, notifications and other "citizen initiatives" are responded to
- A case-handler will be assigned to the party submitting the request for action, unless this has already been determined at an earlier date.
- Cases that should not be investigated (Section 32) are omitted from the investigation.
Within 4 months of receiving the request for action
- A preliminary investigation is conducted, the results of which provide a general idea of the nature and graveness of the competition problem.
- The investigation team sets a preliminary Impact class.
- The request for action is sent to the municipality, joint municipal authority or Government for their information.
Within 6 months of receiving the request for action (or launching an investigation on their own initiative)
- All Impact class 3 cases are omitted from the investigation.
- Impact class 1 and 2 cases are examined at regional manager meetings and the necessary policy decisions are made
- A preliminary report plan is drafted for Impact class 1 and 2 cases and target deadlines are set for pending investigation phases.
- Involved parties (including the party submitting the request for action) are notified of the launching of a detailed investigation
According to Section 32 of the Competition Act, the decision to not investigate must be made immediately. Every effort is made to process cases that are clearly not to be investigated and other Impact class 3 cases within 30 days (on average), but no later than during the six-month preliminary investigation period.
Negotiations concerning elimination of the competition problem
Negotiation is the primary method for intervening in a situation that violates Section 30 a of the Competition Act. According to preparatory work on the Act, a public organisation must present adequate measures for resolving a competition neutrality problem (HE 40/2013 p.37). A negotiation is not, however, conducted for its own sake - in other words, a case can be removed from an investigation at an early phase of the review process if the FCCA receives an assurance that the neutrality problem will be eliminated.
The FCCA's experiences with negotiations for eliminating restraints on competition show that negotiations tend to drag on. This is why it is justified to set a reasonably firm, but acceptably flexible (based on objectively acceptable reasons) time limit for negotiations. On the other hand, negotiations can be expedited if, prior to beginning negotiations, the other party has a clear understanding of what competition neutrality problem is being addressed and on what facts the FCCA is basing its demands. This can be done with, for example, a draft decision made by the FCCA, which would serve as the basis for negotiations and define the operating model or structure to which the FCCA demands changes be made.
The above-mentioned, rather formal negotiation method also has drawbacks: The more detailed and justified the demands are required for a document serving as the basis for negotiations, the more expensive the process will be, thus allowing less negotiating room to maneuver. This is due to the fact that a justified and comprehensively prepared draft decision would already serve as the basis for issuing a prohibition, order or obligation. In order to reduce the workload for both negotiating parties, a more flexible approach would be more effective.
However, prior experience suggests that, at least in the initial phase of neutrality oversight, a more formal approach would be recommended. As a result, the FCCA, in applying Section 30 a of the Competition Act, will draft a summary of its report results to serve as the basis for negotiations. Finding resolution alternatives is, however, the responsibility of the public organisation, which should therefore present adequate measures for elimination of the competition neutrality problem in negotiations.
In internal discussions at the FCCA, it was estimated that no more than three months should be allotted for negotiations, after which they could be considered as having failed. The FCCA would then move to apply Section 30 a of the Competition Act. In practice, the negotiations could require a longer period of time and the recommdned three-month period could, if necessary, be extended, provided that it would be appropriate to do so, taking into consideration the progress of negotiations and the time needed to approve and implement their results.
A penalty payment (Competition Act, Section 46) could be imposed to enforce the prohbition, order or obligation issued in accordance with Section 30 a of the Competition Act.