SWEDEN: An Introduction to Competition/European Law

Trends and Developments in Swedish Antitrust - Public Enforcement in Transition

The Swedish Competition Authority (SCA) has undergone significant changes in recent years. Firms doing business in Sweden have reason to follow the authority’s activities in the coming year closely.

Introduction 

The central role of the competition authority in the enforcement of the competition rules in Sweden cannot be overstated. Sweden has traditionally not seen many private actions, making cases investigated by the SCA the near totality of domestic competition law enforcement to date. As a result, any change to the authority’s priorities, powers, management or resources has the potential to affect the development of Swedish competition law and practice significantly. Over the last few years, such changes to the SCA have been both far-reaching and numerous. New enforcement tools, new leadership, new internal routines and new enforcement priorities have all been introduced in short succession.

To some extent, the concrete consequences of these changes are yet to be seen. Most of the large cases pursued by the agency over the last five-to-ten years were launched during the tenure of Director-General Dan Sjöblom and Head of the Legal Department Per Karlsson, who have since left. The enforcement priorities and approach of the new leadership duo of Rikard Jermsten and Marie Östman have therefore yet to fully reveal themselves. Similarly, the authority’s new decisional powers have so far barely been exercised.

Introspection and self-assessment 

The changes have come into effect after the SCA lost a number of court cases, losses which appear to have triggered several inquiries into the effectiveness of the organisation. These studies have pointed to the need of more qualified litigators, better internal quality control, and considered whether the evidentiary standard upheld by the Swedish courts is too high. The SCA has also been criticised by the Parliamentary Ombudsmen on occasions for flaws in its administrative routines, relating to, for example, cursory access to file assessments, the delayed documenting of meetings and interviews, as well as the lengthy duration of investigations. This may also have contributed to some of the changes introduced. 

These studies, and some of the sources cited therein, may be missing some key aspects, and may thereby be exaggerating the problem. A review of the recent court cases lost by the SCA shows that they, to a large extent, concerned difficult or novel concepts, through which the SCA sought to expand the traditional prohibitions in a way that was rejected by the courts. Meanwhile, the SCA has declined to pursue more conventional competition law infringements.

Overview of changes 

The pre-2017 SCA was seen as a rather aggressive enforcer, vocal and visible on the European competition scene. It brought the TeliaSonera margin squeeze abuse of dominance case to the CJEU, successfully imposed fines in the asphalt and car cartels, and blocked concentrations such as the Swedbank Franchise/Svensk Fastighetsförmedling deal. However, starting with the loss in the Logstor case in 2016 before the Patent and Market Court of Appeal (PMCA), the SCA experienced a series of setbacks, including the losses in Capio, Alfa Quality Moving, Telia & GothNet, Swedish Match and Nasdaq.

The new Director-General was appointed in June 2017, and in short order several of the authority’s largest investigations were terminated without further measures, including the Novamedia and Assa investigations that both had been ongoing for more than four years.

A new enforcement prioritisation policy was adopted in May 2018, and another one in February 2020, emphasising, for example, the degree of harm to competition and the SCA’s ability to efficiently investigate the matter as key factors for the SCA when prioritising matters.

In January 2018 the SCA was given the power – similar to that of the European Commission (EC) – to independently block mergers, without first having to seize a court. This was followed by the SCA being given the power to adopt independent fining decisions and to penalize the submission of incorrect information in March 2021, again mirroring the EC’s powers.

In conjunction with receiving these new powers, the SCA adopted new internal procedures, intended to serve as a form of semi-judicial review ahead of decisions to impose fines or block transactions. These routines have since been further revised, with the SCA in 2020 deciding that all consultation and decision measures within competition enforcement shall be scrutinized by the troika of the director-general, the head of the legal department and the chief economist. In addition, internal deadlines have been introduced in order to allocate resources better and reduce the average length of investigations.

Since the introduction of the new merger control powers in 2018, the SCA has adopted one single decision to block a transaction. Since the competence to adopt fining decisions was introduced in March 2021, under the prohibitions against anti-competitive agreements and the abuse of a dominant position, no such decision has yet been adopted. The power to sanction the submission of inaccurate information has also not been utilized to date.

The one decision adopted under the new powers was appealed to the Swedish competition court, but the transaction was ultimately abandoned by the parties, for reasons extraneous to the SCA’s decision, and the proceedings were terminated without a ruling on the substance of the case. It would be rash to draw any statistical inferences from one case, but there may well be a certain psychological effect in the SCA’s first prohibition decision not being overturned.

The SCA currently appears to tread rather carefully, especially under the enforcement of the anti-competitive agreements and abuse of dominance prohibitions.

Future outlook 

As outlined above, the SCA seems to have spent a significant amount of time and resources on improving and extending capacity over the last couple of years, building proverbial muscle before returning to the ring. As it announced in its 2020 annual report: “The SCA is transforming. An intensive but long-term development work is in progress to continue making the enforcement more effective and adapt it to new prerequisites, not least in a changing world.”

As several significant investigations now start to approach the point in time where the new SCA will either have to terminate or show its hand in a statement of objections, it will be interesting to see how the new powers, resources and organisational changes will play out in practice. Companies defending themselves against allegations of anti-competitive infringements may well encounter a more formidable opponent than before, and if its public statements are anything to go by, the SCA might again join the group of Europe’s most active competition law enforcers.