Arla Foods to pay administrative fine for unlawful cooperation
The Patent and Market Court has in a judgment decided that Arla Foods is to pay an administrative fine for having participated in an unlawful cooperation ahead of a procurement. The fact that Arla Foods has cooperated with the Swedish Competition Authority during the investigation does not mean that the undertaking shall be granted immunity from paying a fine.
It was ahead of a dairy product procurement in late 2016 that Arla Foods exchanged strategic information, including on pricing, with a competing undertaking. The procurement regarding a framework agreement for dairy products, which was coordinated by the municipality of Norrtälje, encompassed several municipalities and municipal undertakings.
Following a tip-off from the procuring authority, the Swedish Competition Authority initiated an investigation which, among other things, meant that Arla Foods was requested to provide information regarding the procurement in question.
An undertaking which, on its own initiative, alerts the Swedish Competition Authority to infringements may, under certain circumstances, be granted so-called leniency, which means that it is not required to pay an administrative fine. An undertaking which is under investigation regarding a suspected infringement and cooperates with the Swedish Competition Authority during the investigation may also, in some cases, be granted a reduced fine.
In this case, Arla disclosed information regarding the infringement, but only after the Swedish Competition Authority had required the undertaking to do so.
The court has now found that Arla did not of its own accord or voluntarily disclose the information, as Arla had been required to provide it to the Swedish Competition Authority. This means that the undertaking cannot be granted leniency, as it would contravene the intentions of the legislator and the leniency system to grant leniency in such a situation.
‘The leniency programme is an important part of our supervisory work and we are pleased that the court shares our view that undertakings should voluntarily disclose information in order to be granted leniency from fines. Having competitors exchange information ahead of a procurement is prohibited and, for that reason, Arla is now required to pay for a serious infringement of the competition rules,’ says the director-general of the Swedish Competition Authority, Rikard Jermsten.
Since Arla Foods has actively contributed to the investigation, the Swedish Competition Authority has reduced its claims for the administrative fine by half. The court has decided that the undertaking is to pay an administrative fine of SEK 1,130,000.
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Read more about competition and procurement matters on www.konkurrensverket.se
Last updated: 2021-10-14
Press release14 october 2021