1. Introduction
The following guidelines have been given on the basis of Article 29 of the Act on Competition Restrictions[i] (hereinafter the Competition Act). Under the provision, the FCA may issue guidelines to clarify its application procedure.
In the amendment of the Competition Act, effective from 1 May 2004, new Articles 8 and 9 were attached to the Act and these allow, under specific circumstances, the reduction and non-imposition of fines imposed on business undertakings which have violated the Competition Act. The provisions only concern the competition infringement fine, and e.g. do not exempt business undertakings from potential liability charges.
Article 8 of the Competition Act is a general provision on the reduction of the infringement fine, under which the fine may be reduced or lifted, if a business undertaking has considerably assisted the FCA in the investigation of a competition restraint. Article 9 of the Competition Act is only applied in cases where a cartel member exposes a cartel to the FCA.
With the help of these guidelines, the FCA seeks to clarify how the office interprets and applies the provisions on the reduction and non-imposition of fines. The guidelines first deal with the non-imposition of fines referred to in Article 9 of the Competition Act.
2. Non-imposition of fines referred to in Article 9
2.1. General
Under Article 9(1) of the Competition Act, the FCA shall not make a proposal on the imposition of a penalty payment to the Market Court in the case of a competition restriction between competitors under Article 4 or Article 81 of the EC Treaty whereby prices shall be fixed when selling to third parties, production shall be limited and markets, customers or sources of supply shall be shared if the business undertaking involved in such a competition restraint (cartel):
- provides the Finnish Competition Authority with information of a competition restriction which allows the Authority to intervene with the restriction;
- provides the information under point (1) before the Authority has obtained them from elsewhere;
- delivers to the Authority all information and documents in its possession;
- co-operates with the Authority during the whole investigation of the competition restriction; and
- has ended or immediately ends involvement in the restriction after having provided the Authority with the information under point (1).
Under 9(2) of the Competition Act, the FCA shall issue a separate decision on whether the business undertaking fulfils all the abovementioned conditions. This decision shall not be separately appealed.
For a business undertaking to obtain immunity from the penalty payment (competition infringement fine), the information must show that the competition restraint reported by the business undertaking qualifies as a serious infringement referred to in the provision. For immunity to be possible, the case must hence involve a serious restraint between competitors (cartel) referred to in Article 4 or Article 81 of the EC Treaty.
Article 9(1)-(5) list the conditions for immunity. For immunity to be possible, all the conditions must be met. Due to the nature of the conditions, a business undertaking cannot fulfil them all at the start of the investigation. A deadline for the fulfilment of the conditions cannot be determined in advance, either.
Article 9 of the Competition Act is only applied to individual business undertakings, not associations of business undertakings, and immunity may only be obtained by one cartel member. The non-imposition of fines under Article 9 is not possible if the business undertakings involved in the restraint jointly report the restraint to the FCA.
2.2 Information business undertaking is required to provide
For a business undertaking to obtain immunity, it is required to provide the FCA with information which allows the Authority to intervene with the restriction. Based on the information, the FCA shall be able to commence further investigations in the matter. Immunity requires that the FCA has no prior evidence of the alleged cartel.
The information provided by a business undertaking shall be comprehensive and precise. The information shall always show the identity of the business undertaking (however, see point "Providing initial information anonymously" below) and its involvement in the competition restraint. In addition, the information must reveal:
- the nature of the competition restriction (price fixing, limiting production or sales, sharing markets, customers or sources of supply),
- which business undertakings have been involved in the restraint,
- which product markets are concerned,
- which geographic area the restriction has been implemented in,
- how long the restraint has been applied for, and
- how the restraint has been implemented (how, where and when a cartel has been agreed on, how it has been maintained and controlled, those who have negotiated the cartel or otherwise participated in its implementation)
Immunity does not require, however, that the information supplied by the business undertaking must contain wholly comprehensive evidence of an existence of a competition restraint and the involvement of those who have committed the infringement, if the business undertaking has no knowledge of all the related facts at the time of the submission. A business undertaking which has acted in good faith does not lose its possibility of obtaining immunity, although the information may prove partially defective or inaccurate.
2.3 Business undertaking shall be the first to expose a cartel
The FCA has had no prior evidence of cartel
A business undertaking cannot obtain immunity from fines, if the FCA has obtained evidence of the existence of a cartel in the process of its own investigations or through outside sources. However, a mere suspicion by the FCA of an existence of a competition restraint does not yet mean that a business undertaking could not obtain immunity under Article 9. The FCA shall have stronger evidence of a cartel than a mere suspicion of it.
Order of priority
Immunity under Article 9 may only be obtained by one cartel member. If several parties to an infringement apply for immunity, it can only be obtained by the business undertaking which has been the first one to expose the cartel. In such a competitive situation, the moment which is crucial for priority shall be the moment the information is verifiably in the use of the FCA.
The FCA does not place the business undertakings in an order of priority based on the comprehensiveness and preciseness of the information. If the information supplied by all the business undertakings meet the conditions of 9(1)(1), the mutual differences in the comprehensiveness and preciseness of the information supplied by the business undertakings have no significance for the forming of an order of priority.
Provision of initial information anonymously
A cartel member may supply the initial information anonymously through an agent. In such a case, the industry involved and the type of competition restrain must be reported. With the help of anonymous information, a cartel member is able to ascertain whether another member has already confessed to the same competition restraint. The anonymous information shall be so precise that it may be verified that the competition restraint involves an alleged cartel of which the FCA possesses none of the information referred to in 9(1).
If the FCA has not previously been in possession of sufficient evidence on which to intervene with a competition restraint, the FCA shall inform the agent of the anonymous business undertaking that immunity from fines under Article 9 is possible.
Actual provision of information
The business undertaking shall provide the information under 9(1)(1) and declare its identity and its involvement in the cartel no later than a date fixed with the FCA. As the anonymous provision of information is only intended for detecting whether another cartel member has already exposed the cartel, the final supply of information and revealing of identity shall usually take place soon after the anonymous provision of information.
Order of priority when information is provided anonymously
The anonymous provision of initial information establishes a priority for a business undertaking, provided that the undertaking supplied the information under 9(1)(1) to the FCA no later than a date fixed with the FCA. The business undertaking is then deemed to have provided the information under 9(1)(1) at a date when the anonymous provision of information through an agent took place. If the business undertaking does not supply the information or reveal its identity and involvement by the fixed date, the undertaking loses its priority granted on the basis of the anonymous provision of information.
Since the information provided anonymously cannot usually be deemed precise enough to meet the conditions of 9(1)(1), the business undertaking who has provided the information secondly usually has a possibility of obtaining immunity if the undertaking who first acted anonymously does not supply the information within the fixed deadline.
2.4 Business undertaking shall provide all information and documents possessed
A business undertaking shall supply the FCA with information and documents on a competition restraint irrespective of their format. The business undertaking shall, on a continuous basis, supply the information and documents related to the restraint of which it gains possession during the investigations. If a business undertaking has deliberately failed to supply the FCA with information related to the restraint, the undertaking cannot be granted immunity under Article 9.
2.5 Business undertaking shall cooperate with the FCA
A business undertaking shall cooperate with the FCA during the whole investigation of the competition restriction. The cooperation shall take place on a continuous basis and expeditiously. During the investigation, a business undertaking shall supply the FCA with all the evidence of the suspected infringement obtained or available to them. The representatives of the business undertaking shall be at the FCA’s disposal and answer swiftly any requests which may assist in the investigation of the competition restraint. The business undertaking cannot be deemed to have fulfilled its cooperation obligation if a large number of its employees or the key employees as regards the competition restraint do not cooperate with the FCA. However, the lack of cooperation of a single employee does not necessarily result in a business undertaking not obtaining immunity.
A business undertaking shall not, by its own actions, complicate the investigation of the restraint. The business undertaking shall e.g. avoid revealing to other cartel members that it has applied for immunity from fines. A business undertaking is encouraged to contact the FCA if it discovers that the other cartel members have obtained information of its leniency application before the FCA has had a chance to intervene with the restraint.
2.6 Business undertaking shall end involvement in restraint
To benefit from immunity it is required that, immediately after having supplied the information under 9(1)(1), the business undertaking has ended or shall immediately end its involvement in the competition restraint. A business undertaking is thus no longer allowed to participate in the implementation of the competition restraint.
2.7 Informing of the fulfilment of conditions 9(1) and (2)
After a business undertaking has contacted the FCA to obtain immunity under Article 9, the FCA shall first investigate whether the undertaking meets the conditions set out in 9(1) and (2). If the FCA has had no prior evidence of the existence of the alleged cartel and the information supplied is comprehensive and precise enough, the FCA shall inform the business undertaking in writing that the undertaking has met the conditions set out in 9(1) and (2). The objective is to reduce the uncertainty related to the potential receipt of immunity.
2.8 Provision of information to the FCA does not award immunity in other EU Member States
Even if a business undertaking exposes an alleged cartel to the FCA on the basis of the Competition Act, this does not imply that the undertaking will be awarded immunity in the other Member States on the basis of the information supplied to the FCA. The FCA shall inform the EC Commission of proceedings in a case involving a leniency application. As a general rule, the FCA may also inform the other Member States. The business undertaking is hence advised to apply for leniency from the EC Commission or from all competition authorities whose territories may have been affected by the competition restraint.
3. Reduction or non-imposition of fines referred to in Article 8
3.1 Scope of application
Under Article 8 of the Competition Act, the Market Court may reduce the infringement fine imposed on a business undertaking or an association of business undertakings under Article 7 or may not impose any fine if the business undertaking or an association of business undertakings has considerably assisted the Finnish Competition Authority in the investigation of a competition restriction. The provision applies to all activities which infringe Articles 4—6 of the Competition Act or Articles 81 and 82 of the EC Treaty, not merely cartels.
The reduction or non-imposition of fines may become relevant both when a business undertaking contacts the FCA on its own initiative and reveals it has committed a forbidden infringement, and when the FCA has already commenced investigations in a competition restriction case. The competition infringement fine may be reduced or not be imposed at all under Article 8 in cases where a business undertaking supplies information of its own activities, and in cases where a business undertaking only supplies information of the involvement of other business undertakings in a competition restriction. The competition infringement fine may be reduced or not be imposed at all also with regard to more than just one party to an infringement.
3.2 Powers to reduce infringement fine
The powers to reduce the infringement fine always lie with the Market Court, however. In its proposal on the imposition of an infringement fine, the FCA shall bring out the facts on the basis of which it finds that a business undertaking or an association of business undertakings has considerably assisted the FCA in the investigation of the competition restraint.
3.3 Business undertaking shall considerably assist the FCA in investigation of restraint
To benefit from a reduction of the competition infringement fine, a business undertaking shall actively participate in the investigation of the competition restriction and, on its own initiative, supply the FCA with information which the FCA does not have in its possession or which the FCA may be at a disadvantage to obtain.
Under Article 10 of the Competition Act, the business undertaking shall be obliged, at the request of the FCA, to provide the office with all the necessary information and documents needed for the investigation of the content, purpose and impact of a competition restriction and for clarifying the competitive conditions. The FCA does not propose that the competition infringement fine be reduced merely on the grounds that a business undertaking only answers the questions posed by the FCA or supplies the FCA with information or documents which the FCA has specifically asked for. Mere passive response to the FCA’s questions does not qualify as considerable assistance as regards the investigation of a competition restriction.
3.4 Cases where non-imposition of fines is not possible under Article 9
If the FCA has obtained evidence of a cartel in other ways than with the help of the information referred to in Article 9, a business undertaking cannot receive immunity from any fine under the provision in question. The competition infringement fine imposed on a business undertaking may be reduced under Article 8, however, if the business undertaking considerably assists in the investigation of the competition restriction, e.g. by supplying the FCA with information which is considerably more comprehensive and precise than the information previously possessed by the FCA.
With the help of Article 8 of the Competition Act, it is possible to allow for situations where several business undertakings expose a cartel to the FCA. Under Article 9, immunity may only be granted to the business undertaking which has been the first to expose the cartel. Under Article 8, however, the FCA may propose a reduced infringement fine also to the other cartel members, if these considerably assist in the investigation of the restraint.
4. Provision of information to the FCA
As the moment the information under 9(1)(1) is provided is decisive for the forming of an order of priority between the business undertakings in a competitive situation, it is important that the business undertaking exposing the cartel supplies the information to the FCA in a manner which ensures that the time the information was submitted can be indisputably established. The business undertaking may be assured of the registration of the information provided by delivering the information in person or through an agent to the FCA’s Cartels Unit or by sending the information to the FCA’s telefax number serving this purpose only (see the contact information below).
Submitting the information in person or through an agent is recommended. A business undertaking shall then contact the Head of the Cartels Unit or his deputy and set a date for a meeting. If the information is delivered outside office hours or the business undertaking cannot establish contact with the Head of the Cartels Unit or his deputy for some other reason, the information may be delivered by using the telefax number. When the telefax is used, the exact date the information was supplied will be automatically recorded. In spite of this, a business undertaking shall be in contact with the FCA’s Cartels Unit e.g. through an agent prior to sending the fax or immediately after it, to make sure that the information supplied is precise enough for the forming of an order of priority.
Providing information through the mail is not recommended, as it is unlikely that the time the information was submitted will be recorded precisely enough. Prior to delivering information, business undertakings shall make sure that the contact information quoted below has not changed.
Contact information
FCA, Cartels Unit, Pitkänsillanranta 3 A, 00530 Helsinki, Finland
Telephone for Head of the Cartels Unit (exchange): +358 9 73141/ Head of the Cartels Unit
Telefax number for leniency applications +358 9 7314 3400
[i] Act on Competition Restrictions No 489/1992, last amended by 318/2004.
Translation: Jaana Aho, Finnish Competition Authority
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