The second Swedish cartel fine decision in a short time – imposed in the sanitation sector
On 1 December 2022 the Swedish Competition Authority (the “SCA”) adopted a decision finding that the prohibition against anticompetitive agreements had been infringed by two undertakings in the sanitation sector. This marks the second time that the SCA has used its recently granted power to impose competition fines on undertakings (for more information about the SCA’s previous decision in the Taxi-Case, please read here). One of the sanitation undertakings was granted leniency, thus no fine was imposed on said undertaking.
The decision in full is available in Swedish here.
The market sharing infringement in brief
In March 2014 two sanitation companies in the south of Sweden; Sanerings Companiet i Malmö AB (“Sanerings Companiet”) and Sopkärlstvätt i Malmö AB (“Sopkärlstvätt”) entered into a written agreement. The agreement, which was in force between 2014 and 2019, was composed of three parts: a mutual non-compete clause and an obligation to cooperate against other competitors, a right for Sanerings Companiet to act as a sub-contractor for Sopkärlstvätt and provisions setting out commission payments between the two undertakings. Although the written agreement did not specify which services that belonged to which undertaking, Sanerings Companiet provided the SCA with such information during the course of the investigation. Further, both undertakings confirmed that the agreement applied to all of their customers, i.e. both in the private and public sector and that it was not tied to any specific geographical market. The SCA carried out a dawn raid in May 2021.
The SCA found that the agreement to abstain from competing with one another was a restriction by object, and that there was therefore no need to further investigate the potential effects of the agreement. However, the SCA noted that both undertakings had acted in accordance with the terms of the agreement and that they had both abstained from offering services that belonged to the other undertaking under the terms of the agreement.
The fine
The SCA imposed a fine of SEK 1,219,000 (approximately EUR 112,000) on Sopkärlstvätt. The fine is low due to the low turnover of the undertaking, but actually corresponds to 10% of its annual turnover. The SCA thus imposed a maximum fine on Sopkärlstvätt.
Full immunity granted due to a leniency application
As noted above, fines were only imposed on Sopkärlstvätt. Sanerings Companiet was granted leniency by the SCA for reporting the existence of the agreement to the SCA and for actively cooperating with the SCA during the investigation. The SCA’s leniency decision is a welcome sign that undertakings that wish to leave cartels in Sweden may receive no or reduced fines for reporting the cartel to the SCA and for actively cooperating in the SCA’s investigation.
Leniency is the total or partial reduction of fines or other penalties granted by competition authorities to companies involved in cartels in exchange for disclosing the existence of the cartel agreement or for their cooperation during the investigation by bringing forward evidence. The leniency tool helps competition authorities detect secret cartels and also deters undertakings from entering into cartel agreements. However, being granted leniency does not absolve an undertaking from responsibility for participating in a cartel and third parties may seek damages for loss suffered as a result of the cartel also against an undertaking that has been granted leniency.