The Finnish Competition Act was recently supplemented with provisions aiming at securing competition neutrality between public and private market actors. This means that the Finnish Competition and Consumer Authority (the “FCCA”) may, under certain circumstances, intervene in the business activities of municipalities, municipal federations and the state, as well as public bodies under the control of the above-mentioned entities.
The FCCA may intervene where either the operating models or operating structures used by the public sector actors prevent or distort competition on the market. The primary manner to solve any identified problems is by conducting negotiations on the elimination of the competition problem. However, if necessary, the FCCA can impose obligations or even prohibit certain business activities of public sector actors.
The Competition Act does not prohibit public sector actors from engaging in business activities or competing with private undertakings on the market. The FCCA will also not intervene in cases where the only aim is to seek protection against competition from an actor in the public sector. However, the FCCA’s intervention may be required, for example, where a public sector actor engages in predatory pricing or pricing which is otherwise not market-based.
Since the Competition Act does not provide any definition of certain central concepts relevant in the context (such as the definition of “business activities” as opposed to activities not conducted on the market), the FCCA is bound to rely on guidance from EU law in its interpretation and application of the above provisions.