Swedish Competition Authority Set to Gain New Powers
On March 7, 2025, the investigation report SOU 2025:22 – Improved Competition in the Public and Private Sectors – was published. This investigation was commissioned by the Swedish Government to analyse and propose new legislative measures aimed at strengthening competition in Sweden. The investigation focused on three primary areas: the introduction of a new competition tool, stricter merger and acquisition reporting obligations, and new rules on public commercial activities.
New Competition Tool for Proactive Market Interventions
Currently, the Swedish Competition Authority (the SCA) can only act after anti-competitive practices occur. Moreover, the SCA is unable to issue pro-competitive injunctions applicable to all entities within a particular market. The Authority thus has limited capacity to impose ex-ante behavioral or structural measures on companies, as these measures can only be employed to remedy specific violations.
The investigation concludes that certain competition issues in Swedish markets cannot be effectively tackled under the current legislative framework. To remedy this problem, it proposes giving the SCA the power to intervene proactively, even when companies have not violated competition laws. This would allow the SCA to impose structural or behavioral measures to improve competition in specific markets.
Leveraging its expertise in market conditions, the SCA would evaluate whether obstacles to effective competition exist in a given market and whether competition-enhancing measures would be appropriate. Before deciding on structural or behavioral remedies, the SCA must:
- Publish its intention to take action and specify the competition issues that need addressing, and
- provide a draft decision for consultation with affected companies, market participants, industry organisations, and relevant authorities.
A decision should be adopted within a maximum period of two years from publication of the intention to take action and any decision taken by the SCA would be subject to appeal to the Patent and Market Court.
Several neighboring countries, including Denmark, Norway, Iceland, and Germany, have recently introduced similar competition tools. Such a mechanism has been in place in the United Kingdom in its current form since the early 2000s.
Stronger Reporting Requirements for Mergers
Under current rules, mergers must be reported if the involved companies had a combined turnover exceeding SEK one billion (approx. EUR 91 million) in Sweden during the previous financial year, and at least two of the companies each had a turnover exceeding SEK 200 million (approx. EUR 18 million) during that period. If the combined turnover exceeds SEK one billion, but fewer than two companies meet the SEK 200 million threshold, the SCA may still require notification if there are special reasons.
According to the investigation, some potentially anti-competitive mergers are not covered by mandatory notification or may be overlooked. In the digital sector, there have been instances where large companies acquire smaller competitors with very low turnover, potentially to eliminate a current or potential competitor before it matures into a challenging rival. Consequently, the investigation concludes that turnover thresholds alone are not sufficiently precise.
To enhance the competitive landscape, the investigation proposes granting the SCA the power to order certain companies to disclose information about planned mergers. The disclosed information could then lead to a requirement for formal notification and review. To facilitate this process, a 15-day standstill period would apply after the SCA has been informed of the merger. Information obligation orders issued by the SCA would be valid for up to two years at a time.
New Law on Public Commercial Activities
A new law addressing anti-competitive sales activities by public entities is proposed to replace existing provisions in the Competition Act. The investigation finds that the provisions regarding anti-competitive sales activities by public entities, introduced in the Competition Act in 2010, have been insufficient to address competition on unequal terms—a problem particularly reported by smaller businesses competing with public entities. The effectiveness of the current rules is likely limited by the fact that these provisions are part of the Competition Act, which requires defining the relevant market—a process that is often resource-intensive.
The investigation concludes that significant reforms are necessary to ensure the impact of the rules. The focus of the assessment should be reversed, shifting to how individual businesses, regardless of the size of the local market, are affected by public commercial activities.
Assessing whether a public commercial activity is prohibited is proposed to occur in two steps:
- First, it is examined whether the activity unfairly affects private actors’ ability to operate in the market. If so, it is presumed to be prohibited.
- Second, it is assessed whether the activity can be justified on public interest grounds. If so, it is not considered unlawful.
The investigation further proposes that state actors should be treated the same way as municipal and regional actors, which is currently not the case. This means that a public commercial activity not directly resulting from a parliamentary decision should be subject to the new rules.
The SCA would be responsible for supervising and enforcing the new law. To ensure compliance, the investigation proposes that the SCA should be able to impose a market disruption fee of up to SEK 20 million (approx. EUR 1.8 million) if a public actor (or a party acting on its behalf) deliberately or negligently violates the prohibition on unfair public commercial activities.
Additionally, public entities engaged in commercial activities would be required to prepare an annual financial report. The report shall describe the organisation and financing of the commercial activity and separate the revenues and costs of commercial activities from other activities.
The proposed measures aim to strengthen competition, increase transparency, and prevent unfair advantages for public commercial activities over private enterprises.
Concluding Remarks
The proposals represent a significant shift in Swedish competition law and, if implemented, could profoundly impact both public and private actors. The introduction of ex-ante competition tools, enhanced merger reporting, and stricter rules on public commercial activities are poised to reshape the competitive landscape in Sweden.
Whether the Government and Parliament will endorse the recommendations of the investigation, and if so, how and when these suggestions will be implemented, remains to be seen. The potential for these reforms to harmonise Swedish competition law with practices seen in other European jurisdictions, such as the United Kingdom and Germany, is notable. For instance, the UK’s Competition and Markets Authority has successfully utilised ex-ante tools to address issues in digital markets, providing a compelling precedent for Swedish authorities.
Moreover, the focus on public commercial activities addresses long-standing concerns from private enterprises about competing on unequal terms with public entities. This shift could foster a more level playing field, encouraging innovation and growth among private businesses.
As these developments unfold, Delphi will continue to monitor them closely, providing insights and updates to ensure that legal practitioners are well-equipped to navigate the evolving competition law landscape in Sweden.