A Q&A guide to cartel leniency law in Finland.
The Q&A gives a succinct overview of leniency and immunity, the applicable procedure and the regulatory authorities. In particular, it covers the conditions to be satisfied, the method of making an application, availability of immunity from civil fines to individuals, the scope of leniency, circumstances when leniency may be withdrawn, leniency plus, confidentiality and disclosure, and proposals for reform.
To compare answers across multiple jurisdictions visit the Cartel Leniency Country Q&A tool.
This Q&A is part of the PLC multi-jurisdictional guide to competition and cartel leniency. For a full list of jurisdictional Cartel Leniency Q&As visit www.practicallaw.com/leniency-mjg.
For a full list of jurisdictional Competition Q&As, which provide a high level overview of merger control, restrictive agreements and practices, monopolies and abuse of market power, and joint ventures in multiple jurisdictions, visit www.practicallaw.com/competition-mjg.
The leniency programme came originally into force on 1 May 2004 and was revised in connection with a comprehensive overhaul of the national competition rules, as a result of which the new Finnish Competition Act (948/2012, as amended) entered into force on 1 November 2011.
The leniency programme sets out the conditions for receiving full immunity or a reduction from penalty payment (seuraamusmaksu) in relation to cartels and other competition infringements.
The two authorities responsible for dealing with leniency matters are:
The Finnish Competition Authority (FCA) (see box, The regulatory authorities). The FCA evaluates leniency applications and makes decisions on whether the applicant qualifies for full immunity or for receiving a reduction from fines. The FCA can grant full immunity and make a proposal to the Market Court to impose reduced fines, or decide not to make any proposal on fines.
The Market Court (see box, The regulatory authorities). The Market Court reviews the proposals for fines and reductions made by the FCA and has discretion as to whether or not it will follow the FCA's proposal. Any proposal of the FCA to reduce fines is therefore not binding on the Market Court, and the Market Court can deviate from it within the limits of the Competition Act.
The Supreme Administrative Court (SAC) is the highest appellate court in competition cases. The SAC reviews the FCA's decisions on second appeal and the decisions of the Market Court (such as a decision on fines) on first (and only) appeal.
Full immunity from the penalty payment can be granted for cartel-related agreements, which breach Article 101 of the Treaty on the Functioning of the European Union (TFEU) and the equivalent national provision, section 5 of the Competition Act. These include agreements such as:
Price-fixing.
Market-sharing.
Limiting supplies.
Bid-rigging.
An undertaking that has coerced another undertaking(s) to participate in the cartel cannot be granted full immunity from fines. However, the fact that an undertaking has acted as a ringleader in the cartel does not prevent it from receiving full immunity.
A reduction of the fines under the leniency programme may be granted for infringements of Article 101 of the TFEU, as well as the equivalent national provision, section 5 of the Competition Act. The reduction can be granted to individual undertakings as well as to associations of undertakings. Reductions of fines are also available for ringleaders and undertakings that have coerced another undertaking(s) to participate in the cartel.
Since May 2004 when the Finnish leniency programme first entered into force, a few leniency applications have been filed with the FCA.
The Market Court has issued two notable decisions, where it has applied the leniency programme. The first decision relates to a cartel on the Finnish vehicle spare parts wholesale market. According to the Market Court's decision issued in March 2009, a vehicle spare parts wholesaler who had revealed to the FCA a cartel operated on the vehicle spare parts wholesale market from early 2004 onwards received full immunity from fines. In December 2009, a decision relating to a raw wood procurement cartel was issued. While the largest individual fine imposed by the Market Court was EUR30 million, one of the participants, who had blown the whistle and disclosed information regarding the cartel to the FCA, was granted full immunity from the fines (as at 1 December 2011, US$1 was about EUR0.8). Furthermore, for the first time, a cartel participant to be fined benefited from a 30% reduction, as it assisted the FCA in its investigations.
To qualify for full immunity for penalty payment, the applicant undertaking must either (section 14, Competition Act):
Provide the FCA with information and evidence of the competition restriction that allows the FCA to conduct investigations in the premises of the undertakings participating in the cartel or in other premises as set out in section 35 or 36 of the Competition Act.
After the FCA has conducted the above inspection, provide information and evidence on the basis of which the FCA can establish that section 5 of the Competition Act or Article 101 of the TFEU has been breached, where the FCA, has not had this information and evidence at the time of receiving it.
The applicant undertaking must provide the information to the FCA in both cases before the FCA has received the information by some other means.
An undertaking that has coerced other undertaking(s) to participate in the cartel, cannot, however, obtain full immunity.
The applicant undertaking must also satisfy all of the following criteria (section 16, Competition Act):
Immediately end its involvement in the competition restriction after submitting the leniency application to the FCA.
Co-operate with the FCA during the entire investigation of the competition restriction in question.
Refrain from destroying any evidence within the scope of the application before and after submitting the application.
Keep confidential the contents of the application and the fact that the application has been submitted or that the applicant considers submitting the application.
The FCA may direct a leniency applicant to continue participation in the cartel activities under its supervision to the extent necessary to secure the conducting of inspections.
Notwithstanding the above, the leniency applicant can disclose information concerning the application to the European Commission (Commission) or competition authorities in other jurisdictions to the extent necessary for submitting leniency application(s).
The information provided to the FCA must always include details of the identity of the applicant undertaking and the industry (although initial contact can be made anonymously (see Question 9, Informal guidance)). In addition, the applicant must describe:
The identity of the business undertakings involved in the cartel.
A detailed description of the operation of the cartel, including information on the products affected by the cartel, the geographic scope of the cartel, the duration of the cartel and the nature of the cartel.
Information on how the cartel has been implemented and maintained.
Information on other competent authorities to which the applicant has submitted or considers submitting leniency applications in the same cartel matter.
If the above information is not available, the FCA can set a deadline by which the applicant for full immunity must provide full details. The applicant must, in its initial application for the FCA to provide this deadline, submit details of its identity and (sections 14 and 17, Competition Act):
Reasons for submitting the leniency application.
The identity of the business undertakings involved in the cartel.
A description (does not have to be a detailed description) of the operation of the cartel, including information on the products affected by the cartel, the geographic scope of the cartel, the duration of the cartel and the nature of the cartel.
An estimated time to collect the required information as well as what kind of information the applicant will submit.
Information on other competent authorities to which the applicant has submitted or considers submitting leniency applications in the same cartel matter.
Provided these obligations have been fulfilled, the FCA grants conditional immunity to the applicant in writing for the duration of the investigation. At the end of its investigation, the FCA makes a separate decision on whether the applicant undertaking fulfils the conditions set out in sections 14, 15 and 16 of the Competition Act. If it becomes clear during the investigation that the applicant does not fulfil these conditions, the FCA will immediately make a written decision that the application has been rejected.
A reduction of the penalty payment under the leniency programme in cartel matters may be granted for infringements of Article 101 of the TFEU, as well as the equivalent national provision, section 5 of the Competition Act.
The penalty payment may be reduced by 30% to 50% for the first undertaking to submit information to the FCA and by 20% to 30% for the second undertaking providing information. Other cartel participants qualifying for a reduction may receive a reduction of up to 20%. To receive a reduction, the applicant undertaking must provide to the FCA either:
Information and evidence which is significant for the determination of the competition infringement.
Information on the entire scope or duration of the infringement.
This information must be provided before the FCA has received such information and evidence by any other means. In addition, the applicant must satisfy all the conditions set out in section 16 of the Competition Act (see Question 4).
In other than cartel matters, the FCA may propose to the Market Court that a reduced fine is imposed on an undertaking or an association of undertakings, if the undertaking or association of undertakings has considerably assisted the FCA in the investigation of the matter. The FCA may also decide not to propose any fine for such undertaking or association of undertakings. The Market Court grants the reduction based on its assessment of the facts presented to it and not according to any specific scale (section 18, Competition Act).
The leniency programme under the Competition Act applies only to undertakings (not managers or employees of an undertaking) and concerns the penalty payment imposed by the Market Court. Immunity or leniency is under the leniency programme and therefore not available to individuals.
Competition law infringements are not criminalised in Finland.
The leniency application must be submitted to the FCA at the earliest possible stage. The order of priority between the applicant undertakings is determined according to the time when the information required for leniency was provided to the FCA. In addition, the size of the reduction from fines in cartel cases corresponds to the applicant's place in the order of priority.
The application must be submitted to the FCA.
The application can be submitted by the undertaking itself or, for example, by its legal adviser. However, the applicant undertaking should consult a legal adviser before it submits the application, as detailed knowledge of competition law is necessary for a successful leniency application and for possible co-ordination of leniency applications in different jurisdictions.
The FCA accepts initial anonymous applications to allow the applicant undertaking to ascertain whether full immunity is available (see Question 10). However, even information submitted anonymously must be precise enough to enable the FCA to identify the competition infringement and industry, and verify that it does not already possess evidence on which it could start an investigation.
No specific form of application is used, but the required information must be submitted. The applicant undertaking can either:
Contact the Head of Cartels Unit or his deputy directly and agree on how further information is to be submitted.
Fax information on the infringement to the FCA.
It is recommended, however, to contact the Head of Cartels Unit or his deputy first (see box, The regulatory authorities).
The FCA uses markers. Once the initial (possibly anonymous) contact with the FCA has been made, the FCA sets a deadline for submitting all the required information, including the applicant's identity where the initial contact was anonymous (for submission of information, see Question 4). If the information is provided within the given deadline, the time of the initial contact determines the order of priority. If the applicant fails to provide the FCA with the required information within the given deadline, full immunity will generally be made open to the next applicant.
The applicants can provide any type of information or evidence that establishes the facts and the existence of the infringement (for submission of information, see Question 4).
The FCA accepts oral statements.
The FCA may grant a conditional immunity from fines (see Question 4) on the basis of summary applications if an application for immunity from fines has been submitted in relation to the same matter to the Commission or a competition authority of another EU member state.
The summary leniency application must contain the identity of the applicant and the following information:
The identity of the business undertakings involved in the cartel.
The products affected by the cartel.
The geographic scope of the cartel.
The duration of the cartel.
The nature of the cartel.
The EU member states where the information and evidence referred to in section 14 of the Competition Act is located.
Information on other competent authorities to which the applicant has submitted or is considering submitting leniency applications in the same cartel matter.
The procedural steps are as follows:
The applicant undertaking contacts the FCA in one of two ways:
anonymously;
disclosing its identity and providing relevant information.
If the initial contact does not contain all the requisite information, the FCA may set a deadline by which the applicant must provide the information relating to the infringement (see Question 4).
On receipt of the information, the FCA investigates it and informs the applicant of whether full immunity is available (see Question 11).
The FCA issues a written decision on conditional immunity from fines.
The FCA conducts a full further investigation into the alleged infringement. At the end of this, it decides either:
that no further action is required;
to submit a proposal to the Market Court on the fines to be imposed (including any suggested leniency reductions). If applicable, the FCA will issue its decision on full immunity simultaneously.
The Market Court decides on any possible reductions of the fines after receiving the FCA's proposal. The parties can appeal the Market Court's decision to the SAC within 30 days.
No penalty payment can be imposed if a proposal to the Market Court has not been made within ten years from the date when the breach occurred, or in case of a continuing breach, within ten years from the date when the breach ended. Otherwise, there are no explicit statutory time limits on the duration of the investigations by the FCA. These bodies must just give their decisions without undue delay, following the requirements set for administrative decisions.
Full immunity is conditional on the applicant co-operating continuously with the FCA and fulfilling all of the required conditions (see Question 4). If the applicant fails to comply, the FCA can withdraw the immunity application and ask the Market Court to impose a fine on the applicant undertaking. Immunity can be withdrawn even if the FCA had already informed the applicant that it has been the first to provide them with sufficient information of a competition infringement.
If the FCA has withdrawn the application for full immunity of one leniency applicant, full immunity should become available to other applicant undertakings that fulfil the applicable conditions, although there is no relevant case law. The Market Court cannot, however, withdraw the full immunity granted to an undertaking under the FCA's decision and impose fines but must, instead, refer the case back to the FCA.
If the applicant undertaking acts in good faith and fulfils all the criteria for full immunity (see Question 4), full immunity remains available to him even if the FCA subsequently obtains more precise or comprehensive information (for example, from another undertaking).
After the case has been referred to the Market Court, it is possible to present new evidence (to the Market Court but not to the FCA). It is in the Market Court's discretion to determine the scope of leniency protection in relation to fine reductions. However, the Market Court cannot impose fines on an undertaking to which the FCA has already granted full immunity on the basis of new evidence, but must refer the case back to the FCA.
Leniency plus is not available under the Finnish leniency programme.
The identity of the applicant undertaking is disclosed at the FCA's discretion. However, the FCA always discloses the identity of the applicant:
When it sends to the Market Court its proposals on fines after the FCA's investigation is completed.
In its decision on full immunity. (The FCA's decisions appear on the FCA's website after they have been submitted to the Market Court.)
Information submitted in leniency proceedings is treated as confidential if the disclosure of the matter were to adversely affect the investigation of the matter or the leniency applicant. The FCA decides on the confidentiality of the information provided to it under the Act on the Openness of Government Activities (621/1999 as amended), but at the outset, this information is considered confidential under that Act.
An applicant undertaking can request confidential treatment of its identity and the information it has provided. The FCA can grant confidentiality under the relevant provisions of the Act on the Openness of Government Activities relating to, for example, securing the successful completion of the FCA's investigation. In addition, business and trade secrets, as well as any sensitive information relating to a private person, are usually treated as confidential, regardless of whether a confidentiality request to the FCA has been made.
Finnish law does not recognise discovery orders. The main objective of the Act on Openness of Government Activities is that information should be publicly available. However, the SAC has ruled that while the investigation of the FCA is still pending, information contained in the leniency application is, at the outset, confidential under the Act on the Openness of Government Activities. After the investigation has been completed, information requests are assessed under the Act on the Openness of Government Activities.
Information submitted to Finnish courts or to the FCA may be subject to discovery orders in foreign courts, although due to the lack of case law, it is not clear whether these discovery orders will be successful in relation to the relevant Finnish authorities. Also, the confidentiality requirement under the Act on the Openness of Government Activities should effectively limit the disclosure (see above, Domestic submissions and domestic discovery).
As the Finnish legal system does not recognise discovery orders, information submitted in foreign jurisdictions cannot be made subject to national discovery orders in Finnish courts.
The FCA is a member of the ECN and information relating to leniency cases may be communicated between member regulatory authorities. Regulation (EC) 1/2003 on the implementation of the rules on competition laid down in Articles 101 and 102 of the TFEU and the Commission's Notice on co-operation within the network of competition authorities (OJ 2004 C101/43) form the legal basis for the co-operation within the ECN.
There are currently no other pending proposals for reform.
Head. Mr Juhani Jokinen (Director General)
Contact details. Pitkänsillanranta 3 A
00530 Helsinki
Finland
T +358 9 73141
F +358 9 7314 3328 (for leniency applications and related information)
E kirjaamo@kilpailuvirasto.fi
W www.kilpailuvirasto.fi
Responsibilities. The FCA is responsible for protecting sound and effective economic competition by:
Intervening with competition restrictions that breach the Competition Act.
General advocacy.
Person/department to apply to for leniency.
Manager, Director Kirsi Leivo (Industries 1 Unit).
Deputy Manager: Mika Hermas (Industries 1 Unit).
Research Manager: Arttu Juuti (Industries 1 Unit).
Procedure for obtaining application documents. The procedure for obtaining documents held by the FCA is governed by the Act on the Openness of Government Activities (621/1999, as amended). This requires the FCA to respond to request for documents without undue delay. If the FCA decides not to provide a document, it must state its reasons. General information is available at the FCA's website (see above).
Head. Chief Justice Kimmo Mikkola
Contact details. Erottajankatu 1-3
PO Box 118
00131 Helsinki
Finland
T +358 10 364 33 00
F +358 10 364 33 14
E markkinaoikeus@oikeus.fi
W www.oikeus.fi/markkinaoikeus
Responsibilities. The Market Court is a special court which hears cases relating to market law, competition law and public procurement.
Person/department to apply to. See above, Finnish Competition Authority (FCA): Person/department to apply to.
Procedure for obtaining application documents. See above, Finnish Competition Authority (FCA): Procedure for obtaining documents.
T +358 9 6689 5216/9520
F +358 9 6689 5222
E mikko.eerola@ww.fi
W www.ww.fi
Qualified. Finland, 1998
Areas of practice. EU and competition law; M&A.
Recent transactions
T +358 9 6689 5253/9520
F +358 9 6689 5222
E lotta.pohjanpalo@ww.fi
W www.ww.fi
Qualified. Finland, 2000
Areas of practice. EU and competition law; M&A.
Recent transactions
