On 21 February 2008, the government presented a proposal for a new Competition Act. The proposal contains a number of new things, of which several aim to make the fight against cartels more efficient. In addition, amendments are proposed to the rules on concentrations.


Possibility of avoiding trial through a settlement procedure
Currently, the Swedish Competition Authority does not have the authority itself to decide on fines (sw. konkurrensskadeavgift). Instead, the authority must bring action in the Stoclholm District Court . The decision of the District Court can then be appealed to the Market Court which serves as the last instance. Now, it is suggested that the Competition Authority be able to decide on fines in cases which are undisputed.

Cartel proceedings tend to be both prolonged and costly. It is now proposed that companies which want to put the infringement behind them, and in addition are willing to confess to the infringement, are given the opportunity to accept a fine. The proposal means that a company which accepts a fine, within the time period and in the manner which the Competition Authority decides, thereby avoids a trail, since the authority may not then bring action against the company.


The limitation statutes are amended
Investigating infringements of the competition rules is often a time-consuming enterprise. Under the current rules, the Competition Authority must bring action within five years of the time when the infringement ended – otherwise the infringement is time barred. In most cases, the relatively short limitation period does not constitute a problem, but in some situations it may lead to the Competition Authority spending resources on investigating a infringement which is later deemed to be time barred. That can, for example, be the case if a company has entered into, not only one but several competition restricting agreements during a particular period. If the court deems that the agreements constitute the same infringement (which many times is the case), normally no problem arises. If, on the other hand, each agreement is deemed to be an individual infringement, it can result in several infringements already being time barred on the date when the authority ends its investigation and brings action before the District Court.

In order to solve this problem, the government now proposes that the time limit is not interrupted until the Competition Authority brings action against the companies. Instead, the time limit will already be interrupted on the date on which the authority conducts an investigation on the premises of the companies or sends the companies a draft of an application for a summons. Corresponding to the rules which apply in EC law, the government is of the opinion that an absolute time limit of ten years should apply.


The rules on fines are amended
The government wants an adjustment to EC law in this area as well. Thus, in the referral to the legislative council (sw. Lagrådsremiss) more precise rules on which circumstances are to be taken into the consideration upon determining the size of the fine are proposed. Amongst other things, a starting amount (the sanction value) is determined on the basis of the seriousness and duration of the infringement. The amount will then be adjusted downwards or upwards depending on aggravating or mitigating circumstances. An aggravating circumstance can, for example, be if the company previously has been found guilty of infringing the competition rules. It is proposed that the act contains more examples, but not an exhaustive list, of such circumstances.


Rules on trading prohibition are introduced
For several years, criminalization of the competition rules has been discussed. The government has now decided against criminalization. The main argument is that criminalization would entail that the rules on concessions and reduction of the fine could not be used to the same extent as today. Company executives would lack the incentive to report cartels to the Competition Authority if they themselves would risk going to prison.

Instead, it is now proposed that rules on trading prohibition are introduced for cartel infringements. In order to avoid the problem of conflicting interests – the company’s interest of a concession of the fines against its representatives’ interest of avoiding a trade prohibition – it is proposed that a trade prohibition will not be decided if the person who may be subject to a trade prohibition himself/herself, or within the framework of the business conducted, to a substantial degree assists in facilitating the Competition Authority’s investigation.

According to the government, the trading prohibition will, first and foremost, come into play in relatively long-term cartel collaborations which have been intended to seriously damage competition on the Swedish market. Further, as a main rule the Competition Authority is not only be able to prove that the company management has known of the infringement, but also that they neglected to take action in order to make it cease. If the authority does not succeed in doing this, a trading prohibition shall not be a possible sanction.


Amendments to the rules on company concentrations are proposed
Finally, it can be mentioned that the government proposes a number of amendments to the rules on concentrations (meaning, inter alia, company acquisitions and mergers of companies.

It is, amongst other things, proposed that the prohibition regarding concentrations in the Competition Act is amended. Just as currently applies under EC law, the question of whether an concentration creates or strengthens a dominant position on the market is no longer the sole determining factor. Instead, such concentrations which are intended to substantially impede the existence or development of efficient competition within the country on a whole, or a substantial part of it, is to be prohibited. Upon assessment, it is to be especially taken into consideration if a dominant position is established or strengthened.

Further, the threshold values for when a company concentration is to be notified to the Competition authority are changed. Under current legislation, a notification duty applies if the companies concerned (typically the acquiring group and the target company) together have a total turnover of SEK 4 billion and at least two of the companies concerned have a turnover in Sweden of at least SEK 100 million. It is now proposed that the companies together have a turnover in Sweden of SEK 1 billion and that at least two of the companies concerned have a turnover in Sweden of at least SEK 200 million. The rationale behind this is to increase the accuracy of the law and to focus on such concentrations which, de facto, may have a damaging effect on the Swedish market.


Forthcoming dates in the legislative process
The legislative council (sw. Lagrådet) is now to review the government’s proposal for a competition act. A bill will then be submitted to parliament in March. The intention is that the new competition act will be enter into force on 1 November 2008. We will return with further information once the bill has been published.