In the first half of 2013, the Finnish Supreme Administrative Court (SAC) and the Finnish Market Court handed down several interesting judgments clarifying various aspects of liability in competition law infringements. Such aspects include the liability of member companies of an association, the effect of sector-specific legislation on the obligation of a dominant firm to provide access to data, and whether and when bid rigging in several bidding procedures constitutes one continuing infringement or several individual infringements.
Liability of member companies of an association
In its decision of 22 January 2013, the SAC considered whether and under what circumstances the individual member companies of an association can be held separately responsible for a competition law infringement alongside the association itself.
The Market Court had previously found that the Association for Finnish Home Appliance Maintenance Services had engaged in price fixing regarding the services offered by the members of the Association between 1997 and 2003. The Market Court ruled that while the Association was responsible, there were no grounds on which to hold the members of the Association separately liable, as there was no proof that the companies engaged in an independent or separate effort to restrict competition. The Market Court based its conclusion on CJEU (Court of Justice of the European Union) case law.
Upon appeal, the SAC reversed the ruling on this point. It held that the member companies, the representatives of which had participated in the price fixing at meetings of the Association, were also responsible for the competition restriction.
As a starting point, the price fixing was viewed as an overall infringement. However, each member company was not on this basis responsible for the entire infringement, but only for the period it was shown to have participated. Because the five-year limitation period had elapsed concerning several companies, the penalty payment proposal was rejected to that extent.
The proceedings had lasted approximately seven years. Due to this delay, the SAC ex officio decreased or removed the penalty payments that would have otherwise been imposed. It finally imposed fines totalling EUR 30,000 on two member companies (in addition to the EUR 5,000 imposed on the Association by the Market Court). The Finnish Competition and Consumer Authority had originally proposed fines totalling EUR 276,240.
Effect of sector-specific legislation on the obligation of a dominant firm to provide access to data
On 31 January 2013, the SAC ruled that Suomen Numeropalvelu Oy (SNOY) had abused its dominant position in the wholesale market for telephone subscriber data by refusing to deliver such data to Eniro Finland Ab (Eniro).
SNOY maintains the only centralized national database of telephone subscriber data in Finland. SNOY and Eniro both operated in the retail market for telephone directory services, with SNOY delivering telephone subscriber data to Eniro on a contractual basis. When Eniro opened a freely accessible online service featuring an electronic telephone directory in October 2003, SNOY terminated its contract with Eniro and refused to deliver subscriber information as long as Eniro's service required no prior registration and was free of charge.
The SAC upheld the Market Court's finding that SNOY was dominant and that it had a legal obligation to provide access to the data in question on non-discriminatory terms.
As objective justification for its behaviour, SNOY argued that data and privacy protection legislation required Eniro to ask for the prior consent from or at the least to notify telephone subscribers of the publication of their contact information online. The SAC found that no such requirement emanated from the legislation as it stood at the time.
The SAC thus rejected SNOY's appeal on substance. However, it noted that the procedure had lasted approximately eight years. Due to this delay, the SAC decreased the imposed penalty payment to EUR 90,000 (the Market Court had imposed a payment of EUR 100,000).
Bid rigging - one continuing or several separate infringements
The Market Court ruled on a local bidding cartel on 28 February 2013. The case involved two competitive bidding procedures, one in 2006 organized by the city of Rovaniemi concerning flats and the other in 2009 organized by the Lapland Hospital District concerning blocks of flats. In both cases, suspicions arose due to the apparent similarities in wording and pricing of some of the tenders. Moreover, two out of the three highest bidders withdrew their tenders during the negotiations. There were also connections between the owners and the board members of the bidders.
The legal concept of continuing infringement is well established in Finland. In this case, the Market Court nonetheless concluded that the activity comprised two separate infringements, as there was no evidence of the cooperation concerning the time between the bidding procedures in 2006 and 2009. The Market Court imposed penalty payments of EUR 40,000 and EUR 3,000 (the FCA had proposed payments totalling EUR 95,000 euros). The case is pending on appeal before the SAC.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
