Negative impacts on the function of competition are essentially required for the FCCA to take action. This is not a matter of protecting private sector business activities from competition with public sector undertakings.
The FCCA may intervene in an operating model or operating structure which distorts or prevents or is apt to distort or prevent competition. Operating models comprehend all activities that result in a public sector undertaking gaining an unfair competitive advantage over its private competitors. This may be, for example, extraordinary aid received by a public sector undertaking or predatory pricing by said undertaking (HE 40/2013 pp. 32-33). An operating structure comprehends, for example, business activities conducted as a municipal enterprise or authority, as these may entail tax benefits or bankruptcy protection (HE 40/2013 pp. 33-34).
The FCCA will also intervene in the pricing of a municipal enterprise in situations where said enterprise is not obligated to corporatise based on the exemption provision in Section 2 b of the Local Government Act and the pricing of the municipal enterprise is not market-based (HE 40/2013 p. 27 and HE 32/2013 pp. 37-38). The FCCA can therefore intervene, for example, in the activities of affiliated entities specified in the Act on Public Contracts if the affiliated entity takes advantage of the opportunity to sell a portion of its assets on the market and if the sale of assets produced by the affiliated entity to an outside party is not market-based.