Sweden’s Exemplary Competition Legislation
Stockholm: 26 November 2009
The Swedish parliament (Riksdag) has passed a new law to prevent unfair competition between public and private companies. The new rules for anti-competitive public sales activities come into effect 1 January 2010.
The amended Competition Act makes provision for the Swedish Competition Authority or any business to go to the Stockholm District Court to prevent public authorities conducting business in ways that distorts competition.
- Answers to 'Frequently Asked Questions' about the new competition law on anti-competitive public sales activity (Swedish Competition Authority) (English language) (Swedish language)
The Swedish Competition Authority (Konkurrensverket) has issued a press release (26 November 2009) about the amendment to the Swedish Competition Act entitled, ‘Municipalities and authorities must stop competing on unfair terms’. The press release states (English translation below) (Swedish text online):
“From the end of the year, it is not permissible for municipalities, counties or state agencies to sell goods and services if it is conducted in a manner that restricts competition. Under a new addition to the Competition Act the Swedish Competition Authority may now act against government agencies engaged in anticompetitive sales activities.
Fair Competition
It is not intended that the tax money is used to subsidise the sale of goods and services by public authorities . It is very good that we now have clear rules that can put an end to municipalities and agencies conducting sales activities in a way that distorts competition, "says Swedish Competition Authority Director Dan Sjöblom.
Many municipalities, counties and state authorities operate different forms of sales activity in competition with other companies. This happens in both method and legal persons, such as limited liability companies where the State has a special influence.
The Swedish Competition Authority which will apply the new rule and can go to court and request that an activity prohibited to be operated in a manner that restricts competition. The ban can be combined with a penalty.
Prioritisation is important
Public sales activity in which government agencies, municipalities or counties compete in an unfair manner has been an area for which the Swedish Competition Authority has received complaints for many years. The Swedish Competition Authority will give this initiative priority in future work. A priority policy was recently published on the website and comments on this will be accepted up to 7 December.
The new rules apply to all economic activities. But in areas of principle or of great economic value include, for example, the broadband market, restaurant and hotel operations and management. As you can read, the policy has multi-criteria governing priorities.
Other types of activities will have a lower priority. It can, for example, review whether certain activities that traditionally have been driven only in the public sphere and the reasons to engage in activities not primarily commercial are valid.
Examples include the municipal run cultural and music schools and vocational training as a limited offer products or services rendered by the pupils. However, it is not the label put on an activity that determines the issues. Careful review is needed. Although, it is important that these activities should be operated in such a way that they do not unduly distort competition.
Voluntary best
“We'd love to help municipalities, counties and state authorities, voluntarily end sales and carrying out activities that result in competition concerns. While it is important to note that unless self-regulation works, we will not hesitate to open cases and to ultimately take unfair practices to court. It is important also to create a precedent for others to comply”, said Dan Sjöblom, Director of the Swedish Competition Authority.”
- Read the full text of Dan Sjöblom, Director of the Swedish Competition Authority, Speech about the Competition Law amendments (in Swedish language).
- Read Maud Olofsson's, Swedish Deputy Prime Minister and Minister for Enterprise and Energy, comments about the new Competition Act in an address to the European Competition Day conference held in Stockholm on the 7 & 8 October 2009 (in English language).
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