Mission
The FCA safeguards economic competition by intervening with competition restraints which violate the Competition Act (480/1992), and by otherwise influencing effective competition. The FCA seeks to increase its advocacy inputs.
Advocacy refers to such activities by the competition authorities which seek to influence restrictive structures, enactments and business models. The objective is that market operators and parties affecting the operations of the markets – the government, the industry, organisations etc. – know competition rules and what they stand for, and commit, by their own actions and decisions, to promoting effective competition. Consumers should also know the rules and the benefits obtained through competition. Advocacy is most efficient when it is possible to use it to prevent the creation of competition problems beforehand (proactive measures).
Influencing the decision-making of government authorities forms the core of advocacy. The objective is that different rules and regulations or operating methods of public corporations – including state-owned enterprises – would not prevent or distort competition (competition neutrality). In practice, the competition angle is usually put forth in various committees, working groups or other preparatory organs. Initiatives to dismantle restrictive rules and regulations and opinions on bill proposals related to the economy are important tools of advocacy.
Paying attention to the competitive impacts in legislative drafting is part of a general objective of better legislation, which is a prominent issue both nationally and internationally. It is the FCA’s aim that whenever possible, ministries would invite the FCA’s opinion when a regulatory reform is likely to prevent, restrict or distort effective competition.
The Ministry of Trade and Industry set up a project for the assessment of the regulatory impacts on business in 2004. The intention is to promote considerations of regulatory impacts on business in legislative drafting and develop methods for assessing them. As for impacts on professional services, one key issue is the effectiveness of markets and competition. The FCA is a member of the project’s support group.
Advocacy has gained more momentum in international discussion as well. For example, the OECD regularly assesses the impact of regulation on competition. Founded in 2001, the International Competition Network ICN has also stressed the importance of advocacy.
The European Competition Network ECN formed by the EU member states also contemplates advocacy issues in its subgroups. Such groups include liberal professions, railways, and pharmaceuticals.
 OECD
ICN
ECN
Deregulation
Since the 1980s, the FCA has actively promoted deregulation. An extensive price regulation system was abolished in 1988 when the FCA was set up. Regulation on agricultural products and the foreign trade of foodstuffs has also been dissolved. Means-based licence systems within traffic have been removed and several monopoly rights abolished. The FCA’s views have weighed considerably in these decisions.
Finland’s accession to the EU in 1995 formed a breakthrough in deregulation. Particularly the foodstuff industry, energy, transport and communications sectors were heavily regulated. Regulation has since been dismantled in all these industries in Finland, and frequently more rapidly than in many other EU countries.
Major Reforms Related to deregulation:
- Opening up competition on data transmission (1988)
- Dissolving general price regulation (1988)
- Liberating the import of crude oil products (1991)
- Removal of means-testing from road cargo transports (1991)
- Liberating the kiosk business (1991)
- Liberating entry into the restaurant and hotel business (1991)
- Removal of sugar import monopoly (1992)
- Removal of foreign ownership restraints (1993)
- Removal of means-testing in domestic airline passenger traffic (1993)
- Opening up competition in IT services (1994)
- Removal of means-testing of driving schools (1994)
- Liberating entry into the motor-vehicle inspection (1995)
- New Electricity Market Act (1995)
- Removal of almanac and calendar monopoly (1995)
- Incorporation of the government grain storage (1995)
- Liberating the import, manufacture and wholesaling of alcohol products (1995)
- Separating track maintenance and railway transports (1995)
- Removal of sole right of the postal savings bank in government monetary transactions (2000)
- Increasing transparency and monopoly control in water maintenance (2001)
- Opening up the railway traffic between Finland and the EEA countries to competition (2003)
- The organisation reform of the Finnish Road Administration (2001): the Finnish Road Administration (responsible for Finland’s highway network) and the Road Management were set up
- Opening up the building and maintenance of general roads to competition (2001-2004)
- Opening up general road maintenance projects to competition (2001-2004)
- Separating the administrative and public service duties of Metsähallitus (Finnish Forest and Park Service) from the business activities (2005)
- Separating the administrative tasks of the aviation field from Finnavia’s business (and increasing transparency in public service duties) (2006)
- Opening up the national goods transports of the railways to competition (2007)
Government and the markets
The government is a major operator in the Finnish economy, and state enterprises and companies have a firm position in many markets. The municipalities are responsible for arranging welfare services to their citizens. The FCA’s objective is to secure the preconditions of efficient competition between private and public production in a situation where fields of public production are opening up to competition and where public production has, in some cases, expanded into fields previously occupied by private enterprises alone.
As regards the government business units, when opening up competition, the FCA has sought to secure that they do not abuse their exclusive position or tax funding received for their public service duties in a manner distorting the competed markets. The key problem from a competition law viewpoint has been the partial protection still enjoyed by public production, which creates both possibilities and incentives for artificial competition restraints.
The focus of advocacy in the public sector has shifted from state-owned enterprises to municipal production activities. Although the municipalities are free to decide how the services are produced, most municipalities still produce the services in their own organisation. But e.g. the financial difficulties of the municipalities and the aging of the population create pressure to develop new solutions, so there is a clear need for marketization in the municipal services. Marketization can be seen as a means to rise to the challenge of the survival of the welfare state.
The buyer-producer model and the service voucher are examples of market-friendly ways to organise the services. The buyer-producer model is often the first step when service production is arranged in a way which encompasses factors familiar from the markets: the financial incentives guiding the actors of both the demand and supply side. The service voucher spurs the service providers to develop their activities in accordance with the actual consumers of the services. It also enables the competition arising from the alternative nature of the production methods and increases customer choice.
The FCA has participated e.g. in a Ministry of Finance working group which evaluated, in particular, ways of promoting the role of private service production in public production.
Other
In addition to the public sector, traffic (particularly aviation, railways and e.g. taxi regulation) and telecom and media operations remain the key of advocacy in the future.
Environmental protection is an integral part of the operations of a welfare state. In environmental issues, the FCA aims to eliminate enactments, which place obstacles to business activities promoting environmental goals. The FCA also seeks to ensure that competitive considerations receive sufficient attention in environmental regulation. Additionally, the cooperation between business undertakings shall occur in accordance with competition rules.
Contact information (FCA's Advocacy Unit)
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