It is the aim of merger control to secure the competitive structure of the markets by intervening where necessary ex ante with concentrations significantly impeding effective competition. Merger control began in Finland in 1998. The provisions on merger control are included in Chapter 4 of the Competition Act.
Concentrations exceeding a certain turnover threshold shall be notified to the FCCA under the Competition Act, and the transaction shall not be implemented prior to the FCCA's decision in the matter. The primary way to prevent the restrictive effects of a transaction is to impose conditions upon it, for example an obligation to divest. The deal may also be prohibited altogether, if a satisfactory conclusion cannot be obtained by imposing conditions. The acquisition may be prohibited by the Market Court upon the proposal of the FCCA.
Merger control differs from other forms of competition control in two ways: in the latter (e.g. supervision of abuse of dominant position and cartel ban), the behaviour of companies on the markets is intervened with ex post facto. In merger control, the structure of the market is the object of attention, and the control is proactive by nature.
Read more on Merger Control under Competition Restraints
The provisions of the Competition Act on merger control correspond to a large extent with the provisions contained in Chapter 3 a of the annulled Act on Competition Restrictions. In the Competition At, the provisions on the assessment of mergers have been reformed so as to conform even better to the manner of assessment in the EU law. The so-called SIEC (Significant Impediment to Effective Competition)test has been adopted in the assessment of mergers, with a stronger focus on the competitive effects of the merger.
On the proposal of the FCCA, the Market Court may prohibit or order a concentration to be dissolved, or attach conditions on its implementation, if the concentration may significantly impede effective competition in the Finnish markets or a substantial part thereof, in particular as a result of the creation or strengthening of a dominant position. However, the creation or strengthening of a dominant position is no longer a requirement for intervention.
The FCA (currently FCCA) issued Guidelines on merger control in 2011. The objective of the Guidelines is to clarify the principles adhered to in the interpretation of the provisions on merger control and to provide more detailed instructions on the application of the provisions. The Guidelines deal with for example the notification obligation and procedure, the calculation of turnover and the assessment of mergers.
Which concentrations are covered by merger control?
A concentration shall be notified to the FCCA if
- the combined turnover of the parties exceeds 350 million euros and
- the turnover of at least two of the parties resulting from Finland exceeds 20 million euros for both.
On the calculation of turnover, see also the government decree on the calculation of turnover of parties to the concentration (1011/2011) and the FCA's Guidelines on merger control. If the concentration falls within the scope of Council Regulation (EEC) No 139/2004 on the control of concentrations between undertakings, the acquisition shall be notified to the European Commission, who has the sole right to examine the concentrations having a so-called community dimension. See EU competition rules for more on provisions concerning EU merger control.
When and how are mergers intervened with?
The FCCA intervenes with a concentration, if, as a result of it, the concentration may significantly impede effective competition in the Finnish markets or a substantial part thereof, in particular as a result of the creation or strengthening of a dominant positiona dominant position shall arise or be strengthened which significantly impedes competition in the Finnish markets. The future development of the markets is also sought to be taken into consideration.
The primary way to eliminate harmful competition restraints is to impose conditions on it, for example an obligation to divest. The transaction may also be prohibited altogether, if a satisfactory conclusion cannot be obtained by imposing conditions. The deal may be prohibited by the Market Court upon the proposal of the FCCA. There are special provisions in the law for mergers within the electricity market.
Notifying a concentration
A concentration shall be notified to the FCCA following the conclusion of the agreement, acquisition of control, or the announcement of a public bid but prior to the implementation of the transaction. A concentration may also be notified to the Finnish Competition Authority as soon as the parties demonstrate with sufficient certainty their intention to conclude a concentration.
The more specific contents of the notification obligation have been provided for in the government decree 1012/2011. The appendix contains detailed account of the information to be provided, unless the FCCA has granted waivers.
In addition to the Competition Act and the above-mentioned decision govenrment decree, the obligation to notify is also discussed in the government decree on the calculation of turnover between the parties to the concentration (1011/2011) and the FCA's Guidelines (2011) on merger control.
The FCCA's staff provides additional information and guidance. Anyone obliged to notify has the right to discuss beforehand the planned arrangement, the content of the provisions applied to it and the obligation to notify. These preliminary negotiations facilitate drafting the notification and help the FCCA to process the matter quickly.However, the notifier himself has the final responsibility for making the notification.
Review of concentration notifications at the FCCA
When a concentration notification is reviewed, the main competitors of the parties to the concentration, the customers and the suppliers are always heard.
When necessary, the notification process has two phases:
The so-called first phase shall take 23 working days at most. If the acquisition clearly does not have restrictive effects for competition or if the restrictive effects can be prevented by conditions proposed by the parties, the acquisition shall be cleared during phase I.
Otherwise the FCCA shall take a decision to initiate further proceedings (phase II) during which the transaction and its competitive effects shall be thoroughly investigated. The acquisition may still be cleared as such or approved as conditional. If the commitments by the parties are not sufficient for clearing the acquisition, the FCCA shall make a proposal to the Market Court to prohibit it. Phase II shall take 69 working days at most. the Market Court may extend the phase II deadline by a maximum of 46 working days.
Weekdays from Monday to Friday will be considered working days. New Year’s Day, Epiphany, Good Friday, Second Easter Day, May Day, Ascension Day, Midsummer’s Eve, Independence Day, Christmas Eve, Christmas Day and Boxing Day are not considered working days. Deadline will be calculated from the date following the receipt of a merger notification.
A concentration shall not be implemented prior to a final decision in the matter.
Publication of pending notifications and decisions
The FCCA maintains a list of pending notifications on its webpages.
The final decisions made in merger cases will be published in 1–2 weeks time from making the decision. Prior to publication, business secrets and other confidential information will be removed.
A press release is commonly issued on merger notifications transferred to Phase II and on the most important decisions made.
Pending notifications (in Finnish)
Decisions in competition affairs (in Finnish)