Legal Alerts / 26 Jun 2014

Legal Alert – Market Court Ruling Imposes Record-Breaking Fine for Predatory Pricing

Executive Summary

Earlier today the Finnish Market Court published a highly significant ruling which imposes the largest fine in Finland’s history for predatory pricing (MAO 467 and 468/14). The Market Court imposed a EUR 70 million fine on Valio Oy for abuse of its dominant position which constitutes the largest penalty ever imposed on a single undertaking in Finland.

 

Background

According to the Market Court, Valio is the largest milk processor in Finland and the market leader in all the main dairy product groups in Finland. The main suppliers are Valio and Arla Ingman.

In early spring 2010, after Arla Ingman had increased its market share in the fresh milk wholesale market, Valio dropped the wholesale prices of its fresh milk considerably below cost value. The matter was subsequently investigated by the FCCA during which time Valio enjoyed a market share of over 50% in the fresh milk market. 

 

Judgement

In determining the size of the penalty payment, the Market Court considered the gravity and duration of the conduct, the size of the fresh milk market, Valio’s considerable turnover and the fact that Valio has on a previous occasion been found guilty of abuse of its dominant market position. The Market Court rejected the future private enforcement claims as mitigating factors since Valio could not substantiate the claims.

The judgement is not yet legally valid and the parties may appeal the case to the Supreme Administrative Court. 

 

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