The need for criminalisation of cartels is being assessed in Finland

The Ministry of Employment and Economy (“MEE”) and the Finnish Competition and Consumer Authority (“FCCA”) organized a joint expert seminar at the end of May 2014 in which the Report on the Criminalisation of Cartels (“Report”) was presented.

Currently the Finnish Competition Act (948/2011) does not include the possibility to impose sanctions on persons involved in cartel activities. Only businesses can be subjected to the administrative penalty payment that is proposed by the FCCA and imposed by the Market Court.

The Report is the first stage of the project launched in June 2013 in response to the Government Programme that requires steps to be taken to consider the desirability of criminalising cartels under Finnish law. The Government Programme initiative stems from the concern that the deterrent effect related to the current cartel sanctions may not be sufficiently effective to prevent cartel activities. The prevention of future cartels is the primary justification for criminal sanctions for cartel participants.

The Report consists of two partial reports commissioned by the FCCA: one prepared at the University of Leeds (Professor P. Wheelan) and the other at the University of Helsinki (Professor R. Lahti and Mr. V. Hiltunen). The partial reports analyse the prerequisites for the criminalisation of cartels from the national point of view as well as from the international perspective and in particular taking into account EU competition law. Additionally, they assess the potential for implementation of criminalisation provisions into Finnish law and discuss the main pros (such as deterrence) and cons of cartel criminalisation.

Both partial reports conclude that there are prerequisites for criminalisation of cartels in general in Finland. Professor Wheelan clearly recommends criminal cartel sanctions for individuals to be introduced in Finland, provided that a number of practical measures are adopted. The partial report made by the University of Helsinki takes a somewhat more reticent approach to criminalisation despite the fact that the theoretical prerequisites are found to be present. This might indicate that for example the business prohibition may be a better suited punishment in Finland than custodial sentences in cartel cases.

Logically the partial report prepared at the University of Helsinki studies in more detail the national judicial system. It considers the purposefulness of criminalisation and whether criminalisation would be feasible in the Finnish legal system taking into account the Finnish national administrative and criminal judicial system. There are some very interesting and complex issues pointed out in the partial report that must be solved in connection with possible criminalisation. For example, the functionality of such a two-process system must be addressed: How would the two parallel or consecutive processes, namely the administrative process (by the FCCA and eventually the Market Court) and the criminal process (including the preliminary investigation by police) function and how would they interact. In addition, the functioning of the leniency system should be ensured.

It should be noted that the Government initiative and the Report do not yet indicate that criminal cartel sanctions are to be introduced into Finland’s judicial system. The Report will be a useful tool to further assess the need for personal responsibility in cartel cases and to evaluate whether criminalisation even suits the Finnish competition law and criminal law system.

As the next step, the MEE will invite the Ministry of Justice to join the discussions. It is then for the Ministry of Justice to assess whether it is feasible to safeguard the functionality of the leniency system in the event that the criminalisation of cartels is implemented in Finland. At the same time, alternative options, such as business prohibition, will be assessed. Regardless of the final approach to be taken, it is not likely that in the very near future major legislative changes will take place.