Competing fairly - Sweden
Swedish competition rules are mainly contained in the Competition Act (Konkurrenslagen).
Important supplementary laws are the:
Cartel agreements and abuse of a dominant position
Chapter 2 of the Competition Act covers the two central prohibitions of preventing free competition:
- abuse of a dominant position in the market;
- cooperation between companies to obstruct , restrict or distort competition (e.g. in cartels).
Small and medium-sized companies can cooperate as long as it does not lead to them controlling a significant share of the market.
Cooperation between companies does not necessarily obstruct competition. For example, cooperation can contribute to improving production or distribution or to promoting technological or commercial progress. In such cases it may be subject to a special exception, such as a block exemption.
Other types of unfair competition
Free pricing applies to most markets in Sweden. It is not the task of the Swedish Competition Authority to set reasonable prices. However, it can intervene when pricing means that a company is abusing its dominant market position.
Every shop can set its own prices, but recommended retail prices (RRP) are very common and are followed by many shops. Manufacturers and suppliers can issue recommended or standard prices as guidance for retailers.
An infringement of the Competition Act occurs when separate companies agree or contract with each other to charge a certain price when selling to consumers. Suppliers may not force a retailer to maintain a certain price.
If a company that refuses to supply a product or service has a dominant market position (such that it can act independently of customers and competitors), its refusal to supply may be prohibited by the Competition Act.
It is also prohibited to refuse to supply products or services to a company because it has made an agreement with a competitor, especially if this affects a significant share of the market.
The Swedish Consumer Agency (Konsumentverket) is a government body tasked with safeguarding consumers' interests.
The authority in Sweden which monitors competition issues is the Swedish Competition Authority (Konkurrensverket).
Strict provisions govern company mergers
Filing a merger report
It is a good idea to contact the Swedish Competition Authority in advance before filing a report on a company merger. This is useful for both the acquisition partners and the Swedish Competition Authority.
Companies which merge and gain a significant market share and turnover after the merger must in certain cases report the merger to the Swedish Competition Authority.
If a company is subjected to measures restricting competition or if there is any suspicion of cartels being formed, this can be reported on the Swedish Competition Authority website.
Consequences of illicit cooperation
The Swedish Competition Authority can order a company to terminate a business activity if it considers that this obstructs competition.
If this is not done then the company must pay a fine. If the infringement is considered to be serious then the company may be liable to pay an administrative penalty (konkurrensskadeavgift). This may be up to 10% of annual turnover.
Companies which admit that they have participated in an illicit cartel may be wholly or partly exempted from paying fines for the illicit action if they report themselves to the Swedish Competition Authority.
Check also the legislation on this topic in: