Advokatfirman Delphi
Sweden
Sweden
Elisabeth Legnerfält and Helene Andersson
Advokatfirman Delphi
Antitrust law
Legal objective
1 What are the legal sources that set out the antitrust law applicable to
3 Is the only objective pursued by the law on vertical restraints
vertical restraints?
economic, or does it also seek to protect other interests?
The national competition legislation applicable in Sweden is the
Competition Act (2008:579) (the Act). The primary provisions
applicable are chapter 2, section 1 (the national equivalent to article
81(1) EC) and chapter 2, section 2 (the national equivalent to article
81(3) EC).
EC Regulation 1/2003 provides that the Swedish Competition
Authority, and the Swedish courts must apply article 81 of the EC
Treaty when the prohibition on anti-competitive agreements is applied
to agreements which may affect trade between member states.
There is a Swedish block exemption, the Act (2008:581) on block
exemption for anti-competitive vertical agreements which refers back
to Regulation 2790/1999.
When a party holds a dominant position on a market to which
the vertical agreement relates, chapter 2, section 7 of the Act or article 82 EC will also be relevant to the antitrust assessment of a given
agreement in order to determine whether there is abuse of a dominant
position. However, conduct falling within the article 82 prohibition is
considered in Getting the Deal Through – Dominance and is therefore not covered here.
Further guidance on assessment of vertical restraints in Sweden is
found in case law from the Stockholm District Court and the Swedish
Market Court as well as decisions from the Competition Authority.
The aim of the Competition Act (chapter 1, section 1) is to eliminate
and counteract obstacles to effective competition in the field of production of and trade in goods, services and other products, meaning
that there is a consumer protection perspective.
Types of vertical restraint
Jurisdiction
2 List and describe the types of vertical restraints that are subject to
5 What is the test for determining whether a vertical restraint will
antitrust law. Is the concept of vertical restraint defined in the antitrust
law?
According to chapter 2, section 1 of the Act, agreements between
undertakings shall be prohibited if they have as their object or effect
to prevent, restrict or distort competition in the market to an appreciable extent.
Vertical agreements are defined in section 1 of the Swedish Block
Exemption as agreements entered into between two or several undertakings which, within the framework of the agreement, are active at
different levels in the production or distribution chain and which
regulates the conditions for the parties’ purchase, sales or resale of
certain goods or services.
Vertical restrains are defined (section 2) as vertical agreements
containing restraints on competition.
Vertical agreements that may be subject to competition rules
include distribution, franchise, purchase, licensing and subcontractor agreements.
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Responsible agencies
4
What agency is responsible for enforcing prohibitions on anticompetitive vertical restraints? Where there are multiple responsible
agencies, how are cases allocated? Do governments or ministers have
a role?
The competition authorities in Sweden are the Competition
Authority, the Stockholm District Court and as last instance, the
Market Court.
The Competition Authority may issue prohibitive orders but may
not impose fines. In order to impose fines the Competition Authority
must petition the Stockholm District Court. The judgment of the
Stockholm District Court may be appealed to the Market Court as
last instance. Leave for appeal is required.
The government and the ministers do not have a role in the
enforcement of the competition rules but only in the legislative
process.
be subject to antitrust law in your jurisdiction? Has the law in your
jurisdiction regarding vertical restraints been applied extraterritorially?
The prohibition on anti-competitive agreements in chapter 2, section
1 of the Act applies where an agreement has an effect on trade within
Sweden. Where an agreement also has an effect on trade between EU
member states, the Competition Authority and Swedish courts must
apply article 81 concurrently.
In addition there needs to be impact or enforcement of the vertical restraint in the Swedish territory to an appreciable extent. There is
so far no case law on extraterritorial application of Swedish competition law to vertical restraints.
Agreements concluded by public entities
6 To what extent does antitrust law apply to vertical restraints in
agreements concluded by public entities?
The prohibition on anti-competitive agreements in chapter 2, section
1 of the Act applies to ‘undertakings’. The term ‘undertaking’ can
cover any kind of entity, regardless of its legal status or the way in
which it is financed, provided such entity is engaged in an ‘economic
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activity’ when carrying out the activity in question. Thus, public
entities may qualify as undertakings when carrying out certain of
their more commercial functions. It is, however, provided that public
undertakings are not considered as undertakings when fulfilling their
public tasks; see chapter 1, section 5 of the Act.
Sector-specific rules
7 Do particular laws or regulations apply to the assessment of vertical
restraints in specific sectors of industry? Please identify the rules and
the sectors they cover.
There is a specific block exemption relating to vertical agreements in
the motor vehicle sector (the Act (2008:584)). This block exemption
does not contain any material differences as compared with the corresponding EC block exemption (1400/2002).
Other industry-specific block exemption regulations exist but
none of these is targeted specifically at vertical restraints.
General exceptions
8 Are there any general exceptions from antitrust law for certain types of
vertical restraints? If so, please describe.
The Competition Authority has issued guidelines on agreements of
minor importance that are not covered by the prohibition in chapter
2, section 1 of the Act (KKVFS 2009:1) where the concept of appreciable extent under Swedish competition law is defined.
The guidelines refer to the de minimis rules laid down by the
European Commission. For further information on the Swedish
guidelines, see question 13.
Agreements
9 Is there a definition of ‘agreement’ – or its equivalent – in the antitrust
law of your jurisdiction? When assessing vertical restraints under
antitrust law does the agency take into account that some agreements
may form part of a larger, interrelated network of agreements or is
each agreement assessed in isolation?
There is no definition of agreement in the legislation, but EC case law
on the definition of agreement applies.
Parent and related-company agreements
10 In what circumstances do the vertical restraints rules apply to
agreements between a parent company and a related company (or
between related companies of the same parent company)?
The principle on economic entity is applicable in accordance with
EC case law, and thus intra-group transactions are as a general rule
not subject to the competition rules. The decisive factor is the parent
company’s level of control over its subsidiary. If the parent company
has such control over the subsidiary that it is not able to act independently the principle on economic entity applies. However, if the
subsidiary is able to act independently, the competition rules apply.
Agent–principal agreements
11 In what circumstances does antitrust law apply to agent–principal
agreements in which an undertaking agrees to perform certain
services on a supplier’s behalf for a commission payment?
In general, the prohibition in chapter 2, section 1 of the Competition
Act will not apply to any agreement between a ‘principal’ and its
‘genuine agent’ (ie, one who bears no substantial financial risk in
respect of the transactions in which it acts as agent) insofar as the
agreement relates to contracts negotiated or concluded by the agent
for its principal. In this regard, the application of the prohibition
mirrors that of article 81 (see EU chapter).
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Intellectual property rights
12 Is antitrust law applied differently when the agreement containing the
vertical restraint also contains provisions granting intellectual property
rights (IPRs)?
The Swedish Block Exemption refers to the EC Vertical Block
Exemption, providing that agreements which have as their ‘centre
of gravity’ the licensing of IPRs will fall outside the Vertical Block
Exemption. In such cases, the antitrust analysis is different. The
relevant considerations include the application of the European
Commission’s Technology Transfer Block Exemption (Regulation
772/2004).
Analytical framework for assessment
13 Explain the analytical framework that applies when assessing vertical
restraints under antitrust law.
A vertical agreement must be assessed in its legal and economic
context. It is thereby assessed whether it is aimed at, or will result
in, an appreciable prevention, restriction or distortion of competition on the Swedish market or a substantial part of it. Both intrabrand and inter-brand competition is taken into consideration and
the agreement is assessed from a short-term as well as a long-term
perspective.
In case there is a restriction on competition it is thereafter assessed
whether the agreement is covered by the Swedish Block Exemption.
The Swedish Block Exemption applies if the supplier does not have
a market share exceeding 30 per cent on the relevant market (if it is
question of an exclusive supply agreement the market share of the
buyer is instead considered) and provided that the agreement does
not contain any hard-core restrictions. If the agreement is covered by
the Swedish Block Exemption, it is automatically exempted from the
prohibition in chapter 2, section 1 of the Act and no further assessment is required.
If the agreement is not covered by the Swedish Block Exemption
it is assessed whether the exemption regarding agreements of minor
importance (KKVFS 2009:1) is applicable to the agreement. This is in
particular of relevance in relation to non-compete obligations exceeding five years or of an interminable duration, which are allowed for
under the de minimis rules. These rules apply if neither party has a
market share above 15 per cent, provided that the agreement does
not contain any hard-core restrictions. The hard-core restrictions are
the same as under the EC de minims notice.
If neither the Swedish Block Exemption nor the de minimis rules
are applicable the agreement or the clause is not per se illegal but it
must be assessed whether the vertical restraint is in breach of chapter 2, section 1 of the Act. Chapter 2, section 1 of the Act, which
corresponds to article 81(1) EC, provides that agreements between
undertakings shall be prohibited if they have as their object or effect,
to prevent, restrict or distort competition in the market to an appreciable extent.
Even if a vertical agreement is considered to fall under the prohibition in chapter 2, section 1 of the Act, it may be exempted according to the ‘legal exemption’ in chapter 2, section 2 of the Act, which
corresponds to article 81(3) EC.
Chapter 2, section 2 of the Act may be considered as a kind of
rule of reason, ie, a balancing between the positive and the negative
effects of a restrictive agreement. The economic advantages of the
agreement must objectively outweigh the negative effects on competition in order for the exemption to apply. It is the undertakings
concerned that must prove that the conditions for exemption are
fulfilled.
In case the supplier or the buyer under the agreement may be
considered to hold a dominant position an assessment has to be
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Advokatfirman Delphi
Sweden
made whether the dominant party acts in breach of the prohibition
in chapter 2, section 7 of the Act, which prohibits abuse of dominant
position, see Getting the Deal Through - Dominance.
14 To what extent does the agency consider market shares, market
structures and other economic factors when assessing the legality
of individual restraints? Does it consider the market positions and
conduct of other suppliers and buyers in its analysis?
The following circumstances are taken into consideration in the
assessment of vertical agreements:
•market shares and market influence of the relevant undertakings,
also over time;
•market shares and market influence by competitors, also over
time;
•structure of the market (eg concentration) and the maturity of the
market;
•the occurrence of entry barriers including similar cooperations
(network effect) and brand loyalty;
•characteristics of the products, extent of the cooperation and levels of the distribution chain; and
•duration of the relevant vertical restraint.
Block exemption and safe harbour
15 Is there a block exemption or safe harbour that provides certainty
to companies as to the legality of vertical restraints under certain
conditions? If so, please explain how this block exemption or safe
harbour functions.
17 Have there been any developments in your jurisdiction in relation
The Swedish Block Exemption, the Act (2008:581) on block exemption for anti-competitive vertical agreements refers back to the EC
Block Exemption for vertical agreements (Regulation 2790/1999). The
hard-core restrictions are the same as in Regulation 2790/1999.
The Swedish Block Exemption corresponds in most respects to
Regulation 2790/1999. The Competition Authority has not issued
any guidelines as regards vertical agreements but takes guidance from
the guidelines issued by the EC Commission (2000/C291/01).
Agreements that fall under the Swedish Block Exemption are
automatically exempted. Vertical agreements that are not covered
by the Swedish Block Exemption are not presumed to be illegal, but
instead subject to an individual assessment.
Types of restraint
16 How is restricting the buyer’s ability to determine its resale price
assessed under antitrust law?
As under EC law retail price maintenance is not covered by the Block
Exemption, including minimum prices and fixed prices. In addition
it is not permissible for the supplier to either encourage (through
discounts, etc) or discourage (through refusal of supply, withdrawal
of discounts, etc) the buyer to stick to the recommended prices or
maximum prices. However, maximum or recommended prices are
permissible.
In case MD 2002:5 , Svenska bokhandlareföreningen v Månadens
Bok et al, the Market Court found that a recommended retail price
on paperbacks was considered to constitute an outflow of a cooperation or concerted practice between various publishers, in breach
of section 6 (now chapter 2, section 1) of the Competition Act. The
Market Court ordered Månadens Bok et al, under penalty of a fine of
500,000 Swedish kronor, to cease printing recommended retail prices
or other price information on paperbacks in the Månpocket series.
The relevant market was defined as publishing of paperbacks in
Sweden. Månadens Bok was considered to have a market share of at
least 25 per cent. As to the anti-competitive behaviour, the Market
Court acknowledged that the recommended retail price in question
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was not binding for the buyers and that Månadens Bok would not
undertake any action against a buyer who applied its own prices.
Nevertheless, the Market Court stressed that competition could be
affected. A buyer that wanted to apply a different price had to undertake active measures in order to show the customer which price was
the actual price. That led to additional work for the buyer. During
the proceedings, it had been demonstrated that the recommended
retail price to a large extent was applied by the buyers. The Market
Court found that the recommended retail prices thus lead to price
rigidity and that it entailed a sales margin control as well as a retail
price control for the individual distributor. As a result, competition
was distorted for sales of Månpocket books on the relevant market.
Since Månadens Bok had an appreciable market share, the distortion
had an appreciable effect on the relevant market.
The Market Court disregarded the claim from Månadens Bok
that the recommended retail price had a positive effect for the consumers. Given the fact that Månadens Bok had not made an application for exemption under section 8 (now chapter 2, section 2) of the
Act, the Market Court stated that it was not entitled to make such
assessment.
In 1993, the Competition Authority granted an exemption for
retail price maintenance for a retail store franchise agreement (dnr
646/93). The Authority based its decision on the fact that it was a
question of the establishment of a low-price chain and that it was
possible for the franchisees to change the prices on the advertising
material and the shelf price tags.
to resale price maintenance restrictions in light of the landmark US
Supreme Court judgment in Leegin Creative Leather Products Inc v
PSKS Inc. If not, is any development in this area anticipated? Has
there been any more general discussion by the relevant agency (or any
other influential stakeholder) of the policy in your jurisdiction regarding
resale price maintenance?
There has not been any particular development in Sweden following
the US Supreme Court judgment in Leegin, nor is any such development anticipated as far as we know. As mentioned in question 13, the
‘legal exemption’ in chapter 2, section 2 of the Act may be regarded
as a sort of rule of reason, ie a balancing between the positive and
the negative effects of a restrictive agreement. In this perspective,
Swedish law is already in line with the basic principle laid down in
Leegin which provides for a rule of reason approach. However, fixed
minimum prices generally do not fulfil the conditions for exemption
and are therefore essentially prohibited.
18 Have decisions relating to resale price maintenance addressed the
possible links between such conduct and other forms of restraint?
Have the decisions addressed the efficiencies that it is alleged can
arise out of such restrictions?
In case MD 2002:5, Svenska bokhandlareföreningen v Månadens
Bok et al, it was also question of horizontal collusion between suppliers, see question 16.
19 How is restricting the territory into which a buyer may resell contract
products assessed under antitrust law? In what circumstances may
a supplier require a buyer of its products not to resell the products in
certain territories?
A restriction of the territory into which the buyer may sell the contract products or services is regarded as a hard-core restriction which
prevents the application of the Swedish Block Exemption. It is, however, permissible under the Swedish Block Exemption to restrict the
buyer from ‘active sales’ into markets that are granted to another
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distributor with exclusivity or which the supplier has reserved to
itself. A prohibition on so-called passive sales, ie, unsolicited orders
from a customer located in another territory is a hard-core restriction
under the Swedish Block Exemption.
•the relevant products have characteristics which motivate a selective distribution system (see question 24), and
•the appointment of distributors is based on objective qualitative
criteria, which are applied for all potential distributors.
20 Explain how restricting the customers to whom a buyer may
Qualitative criteria for the appointment of distributors, such as the
condition of the sale premises, presentation of the products, opening
hours, qualification and further training of the staff, etc. are generally
accepted. Also after-sales services, a prohibition on collection of the
goods prices, a prohibition on mail-order sales or to sell products
or apply a firm name that may undermine the prestige of a luxury
trademark may be acceptable. Other acceptable restrictions relate
to arrangements for wholesalers to control whether a customer is
authorised and identify and document to whom the product has been
sold. An assessment of the criteria has to been made taking into
consideration the nature of the products.
Quantitative criteria, ie, criteria limiting the number of distributors, turnover criteria, size of the stock and the product range etc. are
normally prohibited but might qualify for an individual exemption.
All distributors fulfilling the criteria must be accepted in the
selective distribution system (requirement of non-discrimination).
resell contract products is assessed under antitrust law. In what
circumstances may a supplier require a buyer not to resell products to
certain resellers or end-consumers?
An absolute restriction of the customers to whom the buyer may sell
the contract products is regarded as a hard-core restriction that prevents the application of the Swedish Block Exemption. However, the
restriction of ‘active sales’ to an exclusive customer group reserved
to the supplier or allocated by the supplier to another buyer is
exempted, provided that such a restriction may not limit sales by the
customers of the buyer. A supplier may also restrict a buyer operating
at the wholesale level to sell directly to end-users. In selective distribution systems, the supplier may require that members of the system
(authorised distributors) do not sell to unauthorised distributors. A
supplier may also restrict the buyer’s ability to sell components that
are supplied for the purpose of incorporation, to customers who
would use them to manufacture the same types of goods as those
produced by the supplier. Passive sales (ie, unsolicited orders resulting from a customer in a customer group reserved to someone else
contacting the buyer in order to purchase the products or services)
may, however, never be prohibited.
21 How is restricting the uses to which a buyer puts the contract products
assessed under antitrust law?
Provisions that prevent a buyer from reselling the products or oblige
the buyer to only use the products in its own manufacturing process
are generally considered problematic from a Swedish competition
law point of view. However, such provisions may be permitted if
they can be justified by objective reasons such as security or health
reasons. Under the Swedish Block Exemption, a supplier may prevent
the buyer from selling components which have been supplied for
the purpose of incorporation to a customer who would use them to
manufacture the same type of products as the supplier. The Block
Exemption is neither applicable in relation to the restriction agreed
between a supplier of components and a buyer who incorporates
those components, which limits the supplier to selling the components as spare parts to end-users nor to repairers or other service
providers not entrusted by the buyer with the repair or servicing of
its goods.
22 How is restricting the buyer’s ability to generate sales via the
internet assessed under antitrust law? Have the agencies issued
decisions or guidance in relation to restrictions on internet selling? If
so, what are the key principles?
Internet sales are considered as passive sales in accordance with the
EC Commission’s guidelines and may thus not be prohibited by the
supplier. There are neither Swedish guidelines nor case law in this
respect.
23 Briefly explain how agreements establishing ‘selective’ distribution
systems are assessed differently under antitrust law.
An undertaking that does not hold a dominant position may independently choose its distributors. However, if the distributor is prohibited from selling the products to non-authorised distributors, the
antitrust rules will become applicable.
Selective distribution systems have been considered to be consistent with chapter 2, section 1 of the Act in cases where:
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24 Are selective distribution systems more likely to comply with antitrust
law where they relate to certain types of product? If so, which types
of product and why?
The Competition Authority has in its practice considered that luxury
products such as cosmetics and wristwatches and technically complicated products such as audio and video products, alpine ski equipment as well as complementary products such as sticks, backpacks,
clothes and gloves, cars, computer servers, in-line skates, laser and
ink-jet printers including accessories and consumable supplies, and
online betting services are suitable products for selective distribution
systems.
On the other hand, the Competition Authority has not accepted
selective distribution agreements for, eg, beds, bicycles, health food,
high chairs, prams and wallpaper since these have been considered as
neither luxury products nor technically complicated products.
25 Regarding selective distribution systems, are restrictions on
internet sales by approved distributors permitted? If so, in what
circumstances? Must internet sales criteria mirror offline sales
criteria or would discrepancies be permitted?
It follows from the EC Commission’s guidelines that the supplier may
require quality standards for the use of the internet site to resell his
goods, just as the supplier may require quality standards for a shop or
for advertising and promotion in general. The latter may be relevant
in particular for selective distribution. An outright ban on internet or
catalogue selling is only possible if there is an objective justification.
In any case, the supplier cannot reserve to itself sales or advertising
over the internet. In our view internet sales criteria might differ from
offline sales criteria since different conditions apply. However, the
criteria must be applied in a non-discriminatory way.
26 Does the relevant agency take into account the possible cumulative
restrictive effects of multiple selective distribution systems operating
in the same market?
A criterion for a selective distributions system to qualify for exemption is that there is workable inter-brand competition and that there
is also not too much price rigidity.
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27 Has the agency taken decisions dealing with the possible links
between selective distribution systems and resale price maintenance
policies? If so, what are the key principles in such decisions?
There are to our knowledge no such decisions.
28 How is restricting the buyer’s ability to obtain the supplier’s products
from alternative sources assessed under antitrust law?
These types of ‘exclusive purchase obligations’ should in our view be
considered to be in breach of Swedish antitrust rules only if:
•competitive suppliers have difficulties entering the market; and
•the agreements made by the supplier and its distributors to an
appreciable extent contributes to the foreclosure.
problematic primarily if the buyer has a strong market position on the
downstream market. Should the buyer have a limited market share on
the downstream market, no negative effects for the consumers may
be expected. However, if the buyer holds more than 30 per cent on
the downstream supply market as well as on the upstream purchase
market, potential negative effects should be analysed in detail in order
to see whether the agreement qualifies for an individual exemption.
Exclusive supply agreements of a shorter duration than five years
entered into between non-dominant companies are often considered
as lawful after a balancing of pro- and anti-competitive effects.
32 To what extent are franchise agreements incorporating licences of
IPRs relating to trademarks or signs and know-how for the use and
distribution of products assessed differently from ‘simple’ distribution
This theory which is in line with ECJ case law should be applied
by the Competition Authority. However, it may be noted that the
Authority in its case law has stated that exclusive purchase agreements as such restrict competition and are deemed to be in breach of
section 6 (now chapter 2, section 1) of the Act as soon as they were
not covered by the Competition Authority’s previous guidelines on
agreements of minor importance (KKVFS 1999:1). This practice has
been criticised.
29 Explain how restricting the buyer’s ability to stock products competing
with those supplied by the supplier under the agreement is assessed
under antitrust law.
Non-competition clauses are as a general rule exempted under the
Swedish Block Exemption provided that the duration does not exceed
five years or is indefinite. Nor must the duration of the clause exceed
the duration of the agreement. The same rule applies to exclusive purchase obligations and purchase obligations that relate to more than
80 per cent of the buyer’s total need of the products or services.
If the buyer sells the products or services from premises owned by
the supplier, the duration of the non-competition clause may instead
correspond to the period of the lease. After the term of the agreement, a non-compete obligation of up to one year may be permissible, provided that the obligation concerns products and services
covered by the agreement and is indispensable for the protection of
know-how transferred by the supplier to the buyer or distributor,
and is limited to the point of sale from which the buyer or distributor
operated during the term of the agreement.
As for franchise agreements, non-compete obligations of an
indefinite duration are permissible in order to protect the identity
and know-how of the network. However, the non-compete obligation must not be longer than one year after termination of the
agreement.
In case the market share of the supplier is below 15 per cent the
non-compete obligation is exempted under the de minimis exemption, see question 13, regardless of the duration of the agreement.
30 How is requiring the buyer to purchase from the supplier a certain
amount or minimum percentage of the contract products assessed
under antitrust law?
Franchise agreements are in general considered to improve distribution at the retail level and thereby qualify for an exemption in
accordance with chapter 2, section 2 of the Act. Since the franchisor
establishes an identical business network that enables new undertakings, often small and medium-sized enterprises, to operate on the market. Knowledge and experience are transferred from the franchisor to
the franchisee, which is cost-saving. Franchise agreements are thus in
general considered to contribute to inter-brand competition. However,
franchise agreements must nevertheless be drafted carefully to ensure
that general principles of vertical restraints, such as rules on hardcore restrictions regarding resale price maintenance, are abided to.
As explained under question 29 a more generous approach is taken
towards non-competition clauses in franchise agreements.
33 Explain how a supplier’s warranting to the buyer that it will supply the
contract products on the terms applied to the supplier’s most-favoured
customer or that it will not supply the contract products on more
favourable terms to other buyers is assessed under antitrust law.
Would the analysis differ where the buyer commits to ‘most favoured’
terms in favour of the supplier?
There is to our knowledge no Swedish case law as to whether provisions where the supplier warrants to the buyer that it will supply the
contract product or services on the terms applied to the supplier’s
most-favoured customer or that it will not supply the contract products on more favourable terms to other buyers are impermissible.
Such a provision indicates that the buyer has a strong bargaining
power in relation to the supplier. We believe that such provisions will
normally be considered permissible under chapter 2, section 1 of the
Act provided that they do not lead to discrimination. If the buyer has
a dominant position, this kind of provision must be analysed in detail
in order to assess that there is no abuse of dominant position.
In cases where the buyer commits to ‘most favoured’ terms
would in our view be considered to restrain competition and it is
unlikely that such provision would qualify for an exemption since it
would limit the buyer’s possibility to obtain the products or services
for a lower price from alternative sources.
Notifying agreements
Exclusive purchase obligations and purchase obligations exceeding
80 per cent of the buyer’s total need of the products or services are
considered to be non-competition clauses. See question 29.
31 Explain how restricting the supplier’s ability to supply to other
resellers, or sell directly to consumers, is assessed under antitrust
law.
34 Is there a formal procedure for notifying agreements containing
vertical restraints to the agency? Is it necessary or advisable to
notify it of any particular categories of agreement? If there is a formal
notification procedure, how does it work? What type of ruling (if any)
does the agency deliver at the end of the procedure? And how long
does this take? Is a reasoned decision published at the end of the
procedure?
The main competition risk entailed by exclusive supply is the foreclosure of other buyers. Exclusive supply agreements are regarded as
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agreements under antitrust law?
No, it was abandoned 1 July 2004 following the Commission’s
modernisation.
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Update and trends
might be liable to pay damages to a third party due to a breach of
the prohibition.
The new Swedish Competition Act entered into force on 1
39 May the agency impose penalties itself or must it petition the courts
November 2008. The new legislation means further harmonisation
or another administrative or government agency? What sanctions and
with EC competition rules and it also introduces a number of
remedies can the agency or the courts impose when enforcing the
new features in order to enhance cartel enforcement. One of the
prohibition of vertical restraints? What notable sanctions or remedies
new features is the introduction of trading prohibitions. The rules
have been imposed? Can any trends be identified in this regard?
regarding fines will become both clearer and stricter in an aim to
enhance legal certainty. Furthermore, it will now become possible
for companies to enter into settlement agreements with the
Competition Authority.
Agency guidance
35 If there is no formal procedure for notification, is it possible to
obtain guidance from the agency as to the antitrust assessment of a
particular agreement in certain circumstances?
No.
Complaints procedure for private parties
36 Is there a procedure whereby private parties can complain to the
agency about alleged vertical restraints?
All interested parties may complain to the Competition Authority.
There is no specific time frame within which the Authority must take
a decision. However, it has an obligation to close a case in which it
decides not to take action by stating this in a decision. The Swedish
Competition Act contains an unusual feature which is the subsidiary
right for undertakings concerned to bring action claiming an injunction in case the Competition Authority decides not to take action.
This so-called subsidiary right of action is provided for in chapter 3,
section 2 of the Competition Act. However, the right is unavailable in
case the Competition Authority has applied article 13 in Regulation
1/2003, which regulates the situation where a complaint is rejected
due to the fact that a competition authority of a Member State or
the Commission has received a complaint against an agreement,
decision of an association or practice which has already been dealt
with by another competition authority. In addition, the possibility of
bringing action is reserved to undertakings and thus does not include
individuals.
Enforcement
37 How frequently is antitrust law applied to vertical restraints by the
agency? What are the main enforcement priorities regarding vertical
agreements?
There are no statistics as regards how frequently antitrust law is
applied to vertical restraints. However, the Competition Authority
rarely intervenes against vertical restraints. The approximately 100
decisions regarding vertical restraints taken before 2004 are in the
large majority of cases applications for negative clearance and/or
exemption and only in a limited number of cases matters initiated
by the Authority. The only case so far tried by the Market Court was
brought by a private party under the subsidiary right of action (see
question 16 above).
38 What are the consequences of an infringement of antitrust law
for the validity or enforceability of a contract containing prohibited
vertical restraints?
Agreements that are in conflict with the prohibition on anti-competitive cooperation in chapter 2, section 1 of the Act are deemed null
and void in accordance with chapter 2, section 6. Further, a company
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The Competition Authority is not entitled to impose fines so
must petition the Stockholm District Court to impose fines. The
Competition Authority may issue an injunctive order or an interim
injunction but to issue the order under penalty of a fine it must petition the Stockholm District Court
The level of sanctions or remedies depends on the circumstances
in each specific case. Fines have so far not been imposed in a case
concerning vertical restraints but injunctions have been issued under
penalty of a fine. In the Competition Act that entered into force 1
November 2008, the methods for calculation of fines were brought
closer to the principles under EC law. The maximum fine under the
Act is 10 per cent of the turnover of the company in question and
not the whole group of companies.
Investigative powers of the agency
40 What investigative powers does the agency have when enforcing the
prohibition of vertical restraints?
According to chapter 5, section 1 of the Act, the Competition
Authority may, where it is necessary for the performance of its duties
under the Act, require undertakings or other parties to supply information, documents and other material. Further, the Authority is entitled to require persons who are likely to be in a position to provide
relevant information to appear at a hearing. The Stockholm District
Court may upon request of the Competition Authority decide that
the Authority is entitled to, in accordance with chapter 5, section 3
of the Act, carry out an investigation on the premises of a company
to establish whether the company has infringed chapter 2, section
1 of the Act (a dawn raid). The requirements for such decision to
be issued is that there is reason to believe that an infringement has
been committed; the undertaking does not comply with an obligation
imposed pursuant to chapter 5, section 1, point 1 or there is a risk
of evidence being withheld or tampered with, and the importance of
the action taken is sufficient to outweigh the interference or other
inconvenience caused to the parties affected by it.
Private enforcement
41 To what extent is private enforcement possible? Can non-parties
to agreements containing vertical restraints obtain declaratory
judgments or injunctions and bring damages claims? Can the parties
to agreements themselves bring damages claims? What remedies are
available? How long should a company expect a private enforcement
action to take?
As outlined in question 36, if the Competition Authority decides
not to take action in relation to a complaint, a party affected by the
infringement may according to chapter 3, section 2 of the Act make
a claim for an injunction in the Market Court.
A third party that suffers damage due to breach of the Swedish
competition rules or articles 81 or 82 EC may instigate proceedings
for damages in accordance with chapter 3, section 25 of the Act.
Competitors as well as suppliers and buyers which are affected by an
anti-competitive vertical restraint are entitled to claim damages. Also
an individual or a company which is a party to the agreement may be
entitled to damages. Damages may be awarded with the lost profit
and interest in accordance with the Interest Act (1975:635).
Getting the Deal Through – Vertical Agreements 2009
Advokatfirman Delphi
Sweden
A damages proceeding takes several years in the courts. However,
in order to appeal a judgment from a District Court, leave for appeal
is required. The main rule is that the loser pays principle applies, ie
the successful party can recover its legal costs.
Other issues
42 Is there any unique point relating to the assessment of vertical
restraints in your jurisdiction that is not covered above?
No.
Elisabeth Legnerfält
Helene Andersson
[email protected]
[email protected]
Regeringsgatan 30-32
111 82 Stockholm
Sweden
Tel: +46 8 677 54 00
Fax: +46 8 20 18 84
www.delphi.se
www.gettingthedealthrough.com
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The article is reproduced with permission from Law Business Research. This article was first published
in Getting the Deal Through – Vertical agreements 2009, (published in March 2009 – contributing
editor Stephen Kinsella OBE). For further information please visit www.GettingTheDealThrough.com