Legal Alerts/7 Mar 2013

Legal Alert – Competition Neutrality in Public Sector

The Ministry of Employment and the Economy has sent a draft Government Proposal concerning competition neutrality in publicly controlled companies for public hearing. The proposed amendment in the Competition Act is a part of a legislation package amending the Local Government legislation.

According to the Government Proposal, the Finnish Competition and Consumer Agency (FCCA) would gain new powers to interfere with restrictive practices and structures of undertakings controlled by the public sector. The FCCA would monitor, inter alia, that the pricing of public entities does not restrict competition.

Naturally, the FCCA’s supervisory power would not cover statutory operations of authorities. Interestingly, the FCCA’s supervisory powers would not cover private companies’ operations when they have so called SGEI operations and obligations.

The Ministry’s consultation round ends on 13 March 2013, and the Act is to enter into force at the same time as the amendment in the Local Government Act concerning an obligation to corporatize business operations enters into force.

In Latvia, a similar approach to competition neutrality in the public sector is being considered at the moment, and in Lithuania the Competition Council has jurisdiction to interfere with anti-competitive practices in the public sector based on the Lithuanian Law on Competition.

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Additional information

Ilkka Aalto-Setälä