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Tools for Addressing Competitive Neutrality – Sweden – June 2019 OECD presentation

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This presentation by Sweden, was made during the presentations on “Tools for Addressing Competitive Neutrality” held at the 67th meeting of the OECD Working Party No.2 of the Competition Committee on 3 June 2019. More information on the topic can be found at ww.oecd.org/competition/competitive-neutrality.htm.

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Tools for Addressing Competitive Neutrality – Sweden – June 2019 OECD presentation

  1. 1. The Swedish provisions on anti-competitive public sales activities Katarina Magnusson Swedish Competition Authority OECD, WP2, June 2019
  2. 2. Background to the legislation » Legislation in 2010 after 15 years of debate, investigations and political actions. » Objective: Remedy competition problems associated with public actors´ sales activities in competition with private operators. » Publicly owned entities operate under special conditions. » Strong municipal powers. » May create competition problems not covered by competition law. 2
  3. 3. General facts » The legislation concerns anti-competitive sales activities and anti-competitive conduct in sales activities ”conduct prohibition” or ”activity prohibition”. » The Swedish Competition Authority (SCA) is the authority supervising the law but has no decision powers. » The Patent and Market Court and the Patent and Market Court of Appeal have jurisdiction. » A prohibition applies to future conduct. 3
  4. 4. When are the provisions applicable? 4 What does the law say? Comment Public actors are concerned… The State, a municipality, a County Council or a body where any of these has a dominant influence. …when they are engaged in sales activities… Undertaking concept of competition law. Not purchases. …and when there is a restriction of competition. Distorts or impedes, actually or potentially.
  5. 5. What can be prohibited? 5 What does the law say? Comment Prohibition of a conduct… A conduct (HOW the sales activity is performed) can be prohibited. ...unless conduct is justifiable on public interest grounds. A trade-off between competition concerns and social benefit. Internal motives (e.g. the municipality´s financial situation) not accepted. Prohibition of a sales activity… A municipality or County Council sales activity (but not a state activity) can be prohibited (i.e. WHAT sales activities are performed). …unless in accordance with the Swedish Local Government Act. If the activity is in line with the tasks of the municipality/County Council, the activity cannot be prohibited.
  6. 6. Examples of restrictions of competition » Denial of access to infrastructure. » The public actor´s sales activities are favoured by the merger of authorities with the sales activities. » Below-cost (or, possibly, below market price) pricing. » Discriminatory procedures. » In some cases, the mere presence of the public sales activity, if it cannot avoid restricting competition.
  7. 7. Lessons learned from court proceedings » The SCA has a high burden of proof when it comes to proving anticompetitive effects. » Market definition is an important part of the effects analysis. » The investigations often have the same complexity as cases of abuse of dominance. » The investigation time + court proceedings often takes several years. » The SCA has to prioritize carefully.
  8. 8. Where we are today » Seven cases in courts – 2 approvals, 1 partly approved and 1 approval in the first instance (appealed). » 26 cases of self-corrections after the SCA has initiated an investigation. » Prioritization on communication. » Many municipalities have reviewed their sales activities from a competition policy point of view. » The State and municipalities consider, to a greater extent, the effects on competition when they exercise and plan their sales activities.
  9. 9. Thank you for your attention!