Change in the air in Sweden and beyond: does your competition law compliance need a Spring clean?

Major amendments to competition legislation are expected to add more bite to the bark of Sweden’s antitrust watchdog.

On 1 March 2021, the Swedish Competition Authority (SCA) gained a number of new powers and introduced some related changes to its routines.  Specific to Sweden but with broader resonance in real terms, this is a good moment to take stock of your organisation’s existing competition law compliance framework: is a refresh needed to remain fit for purpose?

The main thrust of the changes is to broaden and deepen the SCA’s enforcement and sanctioning toolbox in its work against anti-competitive agreements and abuse of a dominant position in order to improve alignment throughout Europe.  The merger control rules are unaffected, with transactions impacted only insofar as an assessment of risk during due diligence, integration or post-acquisition audits must evolve to keep pace with these developments.

What has changed and how to react?

Based on a number of central themes, we set out below some of the main changes to Sweden’s competition legislation and offer our reflections on what to think about in practice:

This kind of measure may be used, for example, to address distortive market concentration arising from joint ventures (potentially leading to outcomes similar to this Dutch case in the concrete sector).

More generally, it is important to remember that structural ownership, for example in a joint venture context, is not a safe harbour from SCA intervention if it creates competition concerns.

• intentionally or negligently providing incorrect, incomplete or misleading information during an investigation;
• failing to provide information requested by the SCA by the deadline stipulated; and
• failing to appear for an interview.

See also Theme 4 below for further examples of investigation fines in the context of dawn raids.

The legal maximum for this kind of penalty is one percent of an undertaking’s turnover in the previous financial year.

• reviewing the trade associations part of your main competition law compliance policy, as well as any supporting documents and systems on interactions with competitors more generally;
• training for trade association participants, increasing awareness of healthy meeting discipline, sensitive information exchange and need for public distancing;
• introducing a robust trade association vetting process to weed out any organisations failing to live up to appropriate standards.  The new rules trigger a need actively to engage in this audit process and break ties with trade associations that do not provide the necessary comfort.

Note that public distancing requires rather specific actions.  Remaining involved in suspicious behaviour for fear of being impolite, or failing to request that your company be removed from an invite list does not meet the standards required!

A member will not be fined in this way where it can demonstrate to the SCA that it did not implement the infringing decision of the trade association and was either unaware of it, or distanced itself from the behaviour prior to the SCA’s involvement.

• suspected violations of a decision ordering that an infringement be terminated;
• suspected violations of a commitments decision; and
• behaviour that might justify imposing an ‘investigation fine’ (see Theme 2 above).

Dawn raid training materials may also need to be broadened.

It is already standard SCA practice to mirror digital data.

A company retains the right to have legal counsel present at the SCA to oversee the off-site review process.

• access any information accessible from the company subject to the inspection, irrespective of its form;
• carry out an inspection at the home of a board member, or other employees of a company (previously allowed only in relation to ‘serious’ infringements);
• seal business premises, accounting and business documents where necessary; and
• access trade secrets of a technical nature (assuming relevant to the scope of the inspection).  Previously, a company could refuse to disclose such information but that protection has been removed.

Now more than ever, it is important for companies to have a clear understanding of their digital environment and IT infrastructure – what information is stored where, who has access, what devices are employees using (in particular in a working from home context), what communication methods are used etc?  A mapping process, distilled into an internal guidance document, could significantly improve dawn raid management in the event of an inspection, as well as reduce ongoing risks that can arise in an IT context (e.g. policies on multiparty chatrooms with competitors).

The increased scope to raid private homes, coupled with the marked rise in working from home, means that companies need to check that their dawn raid guidelines cover how to manage this very specific and stressful event.

If in doubt about when to cooperate and when to be silent, employees should simply be trained to seek input from legal counsel.

• obstructing a dawn raid;
• breaking a seal affixed during a dawn raid; and
• failure to provide an answer - or providing incorrect or misleading information – in response to an appropriately scoped SCA request for a factual explanation during a dawn raid.

An inspection by the SCA should be managed by a company with the same care and respect as a visit from the European Commission.

Dawn raid guidelines should be reviewed for consistency.

Immunity (no fine) will now only be available to the first company to meet the relevant standard - either by providing information allowing the SCA to intervene, or helping to show an infringement has occurred in cases where the SCA is already generally aware.  This means that immunity is no longer available for other significant contributions, albeit lesser reductions in fines remain possible.

What has triggered these changes?

Most of these amendments are necessary to implement the so-called ECN+ Directive, which is aimed at increasing harmonisation of enforcement between competition authorities throughout Europe.  Depending on the existing baseline in other EU Member States, some of these changes will recently also have been introduced in other parts of Europe too (for example, see this blog post).  Keep this in mind when reviewing your compliance readiness – i.e. lift your gaze from Sweden and the Nordics to broader European dust down.

While in spring-cleaning mode, it makes sense also to reflect on whether your compliance framework is robust enough to manage the extra challenges posed by remote working practices, triggered by the Covid-19 pandemic but to some extent here to stay.  Reduced staff interaction and the resulting impact on transparency are factors in our new reality and systems need to develop to reflect that (see more here for some interesting in-house perspectives on this angle).

Many organisations already strive to have uniform compliance policies applicable across their geographic footprints. The more high-level and less Sweden- or even EU-specific your organisation’s compliance policy documents are, the fewer changes are likely to be necessary as a result of the changes detailed in this bulletin.  That said, there are a number of important shifts on the near horizon about which it is important to be aware, not least in terms of compliance training for employees.