Finland: The Report On Criminalisation Of Cartels Was Presented In Finland

Last Updated: 7 July 2014
Article by Satu-Anneli Kauranen

The Ministry of Employment and Economy ("MEE") and the Finnish Competition and Consumer Authority ("FCCA") organized a joint expert seminar on 27th May 2014 in which the Report on the Criminalisation of Cartels ("Report") was presented. This Report is the first stage of the project launched in response to the Programme of Prime Minister Katainen's Government that requires steps to be taken to consider the desirability of criminalising cartels under Finnish law.

Currently the Finnish Competition Act (948/2011) does not include the possibility to impose sanctions on persons involved in cartel activities. Only businesses can be subjected to the administrative penalty payment that is proposed by the FCCA and imposed by the Market Court. The Government Programme initiative stems from the concern that the deterrent effect related to the current cartel sanctions may not be sufficiently effective to prevent cartel activities. The prevention of future cartels is the primary justification for criminal sanctions for cartel participants. In this regard private enforcement with the possibility of damages claims following the administrative fine should not be forgotten. The number of damages claims has increased in Finland in recent years and the deterrent brought by them is notable.

The Report consists of two partial reports commissioned by the FCCA: one prepared at the University of Leeds (Professor P. Wheelan) and the other at the University of Helsinki (Professor R. Lahti and Mr. V. Hiltunen). The partial reports analyze the prerequisites for the criminalization of cartels from the national point of view as well as from the international perspective and in particular taking into account EU competition law. Additionally, the partial reports assess the potential for implementation of criminalization provisions into Finnish law and discuss the main pros (such as deterrence) and cons of cartel criminalization.

According to both partial reports there are prerequisites for criminalization of cartels in general in Finland.

Professor Wheelan clearly recommends criminal cartel sanctions for individuals to be introduced in Finland, provided that a number of practical measures are adopted. For instance, Professor Wheelan considers it necessary to provide robust powers of criminal investigation to the relevant investigator of cartel offences and to ensure that the prosecutor in cartel criminal cases is dedicated to criminal cartel offences.

The partial report made by the University of Helsinki, however, takes a somewhat more reticent approach to criminalization despite the fact that the theoretical prerequisites are found to be present. This might indicate that for example the business prohibition may be a better suited punishment in Finland than custodial sentences in cartel cases.

Logically the partial report prepared at the University of Helsinki studies more detailed the national judicial system. It considers the purposefulness of criminalization and whether criminalization would be feasible in the Finnish legal system taking into account the Finnish national administrative and criminal judicial system. There are some very interesting and complex issues pointed out in the partial report that must be solved in connection with possible criminalization. For example, the functionality of such a two-process system must be addressed: How would the two parallel or consecutive processes, namely the administrative process (by the FCCA and eventually the Market Court) and the criminal process (including the preliminary investigation by police) function and how would they interact. In addition, the functioning of the leniency system should be ensured.

It should be noted that the Government initiative and the Report presented do not yet indicate that criminal cartel sanctions are to be introduced into Finland's judicial system. The Report will be a useful starting point to further assess the need for personal responsibility in cartel cases and to evaluate whether criminalization even suits the Finnish competition law and criminal law system.

As the next step, the MEE will invite the Ministry of Justice to join the discussions. It is then for the Ministry of Justice to assess whether it is feasible to safeguard the functionality of the leniency system in the event that the criminalization of cartels is implemented in Finland. At the same time, alternative options will be assessed. The principal alternative is likely to be business prohibition – the way in which for instance Sweden has chosen to punish cartel participants.

Regardless of the final approach to be taken, it is not likely that in the very near future major legislative changes will take place. Should the criminalisation of cartels eventually be introduced in Finland, it cannot take place at the cost of the leniency system. The importance of a well-functioning and predictable leniency system was clearly voiced not only in both of the partial reports but also by every speaker as well as by the audience commenting on the matter during the expert seminar.

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.

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