Borenius > References > EU & Competition > Borenius advised the Finnish Social Security Institution on an EUR 200 million innovative public procurement
EU & Competition / 31 May 2021

Borenius advised the Finnish Social Security Institution on an EUR 200 million innovative public procurement

This long-standing case is a testament to the subtle complexities involved with the legal characterisation of procurement contracts and the broader regulatory interests associated with the outcome of procurement procedures.

We assisted Kela successfully vis-à-vis the FCCA and the Ministry of Transport and Communications, and in the proceedings before the Supreme Administrative Court.

In 2018, the Finnish Social Security Institution (Kela) undertook an innovative public procurement, with a total estimated value of approximately EUR 200 million, of reimbursable patient taxi-transport services via a comprehensive service model in Finland. The procurement quickly drew the attention of the Finnish Competition and Consumer Authority (FCCA) as well as the Ministry of Transport and Communications due to ostensible competition law concerns and alleged incompatibilities with certain concurrent transport regulation reforms.

Whereas the competition law concerns eventually resulted in the opening of a number of formal antitrust proceeding by the FCCA against certain taxi transport service providers, the procurement’s compatibility with Finnish public procurement legislation was challenged by appellants at the Finnish Market Court.

In 2019, the Finnish Market Court quashed via a series of judgments a number of Kela’s procurement decisions after an ex officio investigation of a perceived procurement notification error and found the procurements to constitute, contrary to their original notification as service contracts, concession contracts. However, one of the Market Court’s judgments (MAO:472/19) was subsequently appealed to the Finnish Supreme Administrative Court.

In 2021, the Supreme Administrative Court ultimately overturned the Market Court’s judgment via a precedent-setting judgement (KHO:2021:57), wherein the Court found, in diametrical opposition to the Market Court’s prior reasoning, that the procurement at issue bore all the hallmarks of a service contract, thereby effectively restoring the legitimacy of Kela’s original procurement decisions.

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