Submitting a request for action concerning competitive neutrality
- Public service
The purpose of the Competition Act is to safeguard a level playing field between public and private businesses. The Finnish Competition and Consumer Authority (FCCA) has the authority to intervene in the business activities of municipalities, joint municipal authorities and the Government and entities under their authority if the operating models used (such as pricing below cost) or operating structures (such as government agency) prevent or distort competition in the market.
The Competition Act does not prohibit public organisations from practising business or competing with private enterprises on the same market. The objective is to establish neutral competitive conditions between public and private sector business activities.
The Competition Act applies to the business activities of municipalities, joint municipal authorities, the Government and entities they have control over. Parishes, for example, are not subject to the law.
A public organisation may either practise business activities itself as an authority or unincorporated public enterprise or it may own a limited liability company, for example. Under the Competition Act, it is also possible to intervene in the operations of this type of public entity, e.g. where the public entity distorts competition by obtaining funding from the public owner through extraordinary means. It is also possible to intervene in the operations of a limited liability company controlled by multiple municipalities or a municipality and the Government.
The FCCA is also responsible for monitoring that municipal pricing is market-based when the Local Government Act does not require business activities to be corporatised.
A ban, order or obligation, which is used to rectify a situation involving the restraint or distortion of competition, is issued by the FCCA to the municipality, joint municipal authority or the Government and not to the operating business entity, even if the entity has the status of an autonomous legal person. This does not, however, prevent the FCCA from engaging in dialogue also with the operating business entity, if this proves to be appropriate.
Do the following
As no regulations on the content of a request for action are provided in legislation, such requests are informal. However, the inclusion of a thorough statement in a request for action tends to speed up the processing of the case. An insufficient request for action, which has not been properly completed despite a request to do so by the FCCA, may lead to the case not being investigated.
It is usually recommended that, prior to submitting a request, the submitting party discuss the matter with officials from the FCCA.
More information: kkv.fi/en/competition-neutrality
To whom and on what terms
The FCCA can begin to investigate a competition neutrality problem on the basis of a request for action. Including thorough and pertinent information in the request for action will speed up the processing of the case.
A request for action may be submitted by an individual undertaking as well as, for example, an industry or entrepreneurial organisation. The request may also be submitted online.
The FCCA may intervene in an operating model or operating structure which distorts or prevents, or is apt to distort or prevent, competition. The FCCA will not intervene, if it is clear that the request for action is made solely to seek protection against competition from a public sector competitor. It must therefore be proven that the public sector competitor is distorting the conditions for competition or preventing the establishment or development of competition on the market. Although the burden of proof for this lies with the FCCA if it intervenes in the situation, the undertaking which made the request for action must provide information on the grounds for its demands and otherwise contribute to the clarification of any matter it has filed. Simply listing the problems encountered will not necessarily lead to the launch of an investigation.
It is not possible to intervene in lack of competition neutrality in the following cases:
- the use of public authority or official activities
- public procurements
- the offering of assets other than business activities; in other words, activities not practised in a market environment, such as many statutory municipal functions
- a competition neutrality problem inevitably stems from legislation
- application of the Competition Act would hinder the provision of a service that is of significant benefit to the public interest.
If the FCCA finds that the matter has no major impact on the functioning of competition, it may decide not to investigate it. A decision not to investigate a matter must be taken without undue delay.
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