Unlawful broadband in Eskilstuna and Hallstahammar

Press release

Prohibit the municipally owned undertaking Mälarenergi Stadsnät AB from selling broadband services in Eskilstuna and Hallstahammar. The operation is unlawful and distorts competition. This is the opinion of the Swedish Competition Authority presented in a summons application submitted to Stockholm City Court.

Mälarenergi Stadsnät AB is owned by Mälarenergi AB, a company owned by the Municipality of Västerås. When the company sells broadband services (‘communications operator services’) outside its own municipality, this restricts competition for private companies, which entails an infringement of the Competition Act. The Swedish Competition Authority is therefore bringing proceedings against the company and is calling for the Court to decide to prohibit the operation.

According to a supplementary provision of the Competition Act from 2010, local or central government authorities are not permitted to conduct anti-competitive sales activities. According to the rules on competition, nor may municipal authorities engage in operations that distort or impede competition and which is not compatible with the Local Government Act.
“Municipalities are conducting sales activities on completely different terms than private companies. Municipally owned companies can assume more significant commercial risks, and municipal authorities cannot be put into bankruptcy. We therefore want the Court to put a stop to this operation, which is distorting competition in the market,” explains Dan Sjöblom, Director-General of the Swedish Competition Authority.

It is Mälarenergi Stadsnät AB’s operation outside the Municipality of Västerås that the Swedish Competition Authority now wishes to stop. The operation goes beyond the ambit of municipal powers. The commercial operation in Eskilstuna and Hallstahammar excludes private companies from the market. This means that competition is distorted and that the development of effective competition in the market is held back.

“This is the third matter within a short period of time that we are taking to court where we are of the opinion that public organisations are restricting competition for private companies. It is important to develop case law in this area,” comments Dan Sjöblom.

For more information, please contact:
Jimmy Dominius, Press Officer, tel. +46 (0)8-700 15 80, or 076-542 15 80
Erik Westerström, Senior Case Officer, tel. +46 (0)8-700 16 83

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