Fundamental changes in Swedish competition law were introduced when the new Competition Act entered into force on July 1, 1993. The Act incorporates to a very large extent EC competition law principles. The prohibitions of Articles 85 and 86 of the Rome Treaty, corresponding to Articles 53 and 54 of the EEA Agreement, have been incorporated into the new Act. The decisions of the European Court of Justice on matters involving Articles 85 and 86 will thus have a degree of precidential value for the Swedish courts with respect to their interpretations of the Act.

The system of notifying agreements, negative clearances, block exemptions, individual exemptions, merger control, investigative powers for the supervising authority, i.e. "dawn raids", and sanctions for infringements are very similar to those in EC law.

Even though the Act only has been in force for a few years, it has already been the subject of an executive branch review of how it has been applied in practice. The Government, through the Department of Trade, has conducted extensive hearings with all parties concerned, such as industry groups, involved authorities, courts and the practising bar, including Advokatfirman Delphi.

The review showed that the Competition Authority was examining a large number of mergers and acquisitions that were, in fact, without actual significance for competition. Therefore the first result of the review of the Act was an amendment to the Act which came into force on July 1, 1997 and which eliminated the general obligation to notify mergers and acquisitions in situations where the acquired entity has a turnover below SEK 100 million. The obligation to notify mergers and acquisitions with a turnover exceeding SEK 4,000 million otherwise remains unchanged.

However, the Competition Authority may still require notification where there are special reasons for doing so in a particular case. The amendment to the Competition Act provides two cases where the "special reasons" exemption applies: (1) where the acquiring enterprise via a series of small acquisitions enhances an already significant position in the relevant market; (2) an acquiring enterprise with a strong market position in a market with limited competition acquires a small, newly established enterprise.

The review has also resulted in a number of other proposed changes to the Act. Among the more important are: a definite time limit for the Competition Authority's handling of notified agreements, the abandonment of the negative clearance system and the changing from a three-instance system to a two-instance system.

Neither the amendment of July 1, 1997 nor the above referenced proposals mean that the review of the Act, or even the rules on merger control, has been completed. On the contrary, the Government has stated that the review is to continue.

The general construction of the merger control system is to be reviewed. The basis for the review shall, besides the EC rules, be information on the approaches utilized in other countries, especially the other EU member states. The main issues for review are the existence of the obligation to notify, the delimitation of the notion of mergers and acquisitions, the treatment of joint ventures and the delimitation of the different forms of joint ventures, as well as the issue of ancillary restrictions. It should be noted that there are some differences between national law and EC law in these respects.

The results of the continuing review of the Act are supposed to be presented by the end of February 1998. The Government is also going to propose further amendments to the Act. They will be reported on in a future update.

A cooperation among the business law firms Nielsen & N›rager Advokatkontor, Copenhagen; Advokatfirmaet Selmer & Co, Oslo; Advokatfirman Delphi, Stockholm.

The content of this article is intended to provide general information on the subject matter. It is therefore not a substitute for specialist advice.