Answer ... The substantive rules are set out in the Competition Act (2008:579). The Competition Act came into force on 1 November 2008 and has since been amended several times. For an unofficial English version of the current Competition Act, see the Competition Authority’s website (www.kkv.se).

In addition, the Competition Authority has issued an ordinance setting out detailed rules for the notification of concentrations, together with an accompanying annex containing detailed guidance on the notification and examination of concentrations (KKVFS 2010:3). This is also available in English on the Competition Authority’s website. For guidance on the fundamental concepts of ‘concentrations’, ‘joint ventures’, ‘undertakings concerned’ and ‘turnover’ in the merger control legislation, the Competition Authority refers to the European Commission’s interpretative notice.

Answer ... Generally speaking, licences are not required to conduct business locally in Sweden. However, certain exceptions apply to specific sectors of the economy, including insurance, banking/financial services and broadcasting; although operators which have been approved by other EU/European Economic Area member states in these sectors may, in certain circumstances, benefit from mutual recognition of their foreign licences. If a Swedish licence is required, the regulatory agency may have to take competition policy into account. Under the Radio and Television Act, for example, an acquisition of a licence to broadcast television may not be approved by the Broadcasting Authority if the transfer would increase the concentration of ownership of those with licences to broadcast television by more than a limited extent. Sector-specific legislation must therefore be taken into account when considering the competition issues that may arise in connection with a concentration.

Answer ... The primary responsibility for applying the Swedish merger control legislation lies with the Swedish Competition Authority. The Competition Authority reviews notifications of concentrations and is empowered to clear them, either unconditionally or subject to remedies, or to prohibit them. The Competition Authority’s decisions can be appealed to the Patent and Market Court.

Since the merger control legislation entered into force in 1993, the Competition Authority has received 2,870 notifications (statistics as at mid-January 2020). The vast majority of cases were cleared in Phase I. Only 96 concentrations were subjected to a Phase II investigation and more than half of those were ultimately cleared without remedies.

Answer ... The Swedish merger control legislation applies to all concentrations. The concept of ‘concentration’ is intended to be equivalent to the concept under the EU Merger Regulation (139/2004). The Swedish preparatory works state that “the interpretation of the concept at the EU level should act as the framework for the meaning of the Swedish concept”.

Answer ... The ‘change in control’ principle is defined in Section 1.9 of the Competition Act as follows:

In addition, the definition of a ‘concentration’ clarifies that the creation of a joint venture which, on a lasting basis, fulfils all functions of an autonomous economic entity constitutes a transaction that is caught by the Swedish merger control legislation.

However, the Swedish legislation does not include the special exception contained in Article 3(5) of the EU Merger Regulation. The Swedish legislature deemed that this would “complicate” the legislation and that, in any case, it was doubtful that the bulk of the operations exempted under Article 3(5) of the EU Merger Regulation could be deemed to bring about a lasting change in control. Instead, the legislature has left it to case law to decide whether the exception in the EU Merger Regulation should apply in Sweden on a case-by-case basis.

Answer ... As is currently the case under the EU Merger Regulation, the acquisition of a minority shareholding may trigger Swedish merger control legislation. The definition of a ‘concentration’ provides that a concentration will occur where there is an acquisition of control. For these purposes, ‘control’ includes the possibility of exercising decisive influence over an undertaking. A minority shareholding may therefore confer decisive influence if, for example, the remaining shareholders are widely dispersed.

Answer ... Certain joint ventures are covered by the Swedish merger control regime. As under the EU Merger Regulation, joint ventures are deemed to be concentrations if they fulfil the requirement of full functionality – that is, in essence, if the joint venture will have a lasting operation on a market independent of its jointly controlling parents. In addition, if the creation of the joint venture has as its object or effect the coordination of the competitive behaviour of the parents, then such coordination will be assessed under the Competition Act’s prohibition on anti-competitive agreements (ie, the equivalent to Article 101 of the Treaty on the Functioning of the European Union).

Answer ... There are no specific rules for foreign-to-foreign transactions under the Swedish merger control legislation: such transactions are caught if they meet the relevant turnover thresholds. A physical presence in Sweden is not required. If a foreign party fails to notify a notifiable transaction, there is no risk of fines as such, but the Competition Authority may request that a filing be submitted, subject to fines. However, the Competition Authority has not, to date, deployed this right against any foreign business.

Answer ... A mandatory filing is required if the following cumulative turnover thresholds are met:

• All parties to the concentration have a combined aggregate turnover in excess of SEK 1 billion (approximately €94 million based on the European Central Bank’s exchange rates for 2019) in Sweden; and
• Each of at least two of the undertakings concerned has turnover in excess of SEK 200 million (approximately €18.8 million) in Sweden.

Even if only the first threshold is fulfilled, the Competition Authority may request a filing (and the parties may opt to make a voluntary notification). The Competition Authority has used this mechanism in several cases.

‘Turnover’, as under the EU Merger Regulation, is based on the most recent audited accounts preceding the transaction. If no geographical breakdown of those accounts is available, sales should, as a rule of thumb, be allocated to Sweden when sales have been made to customers located in Sweden. Relevant turnover is calculated for the undertaking ‘concerned’, which includes the entire corporate group to which the undertaking belongs. Reference is made to the European Commission’s Consolidated Jurisdictional Notice.

The Competition Act introduced a so-called ‘anti-avoidance rule’ modelled on the EU Merger Regulation, when it entered into force on 1 November 2008. As a result, two or more transactions that have taken place within a two-year period between the same persons or undertakings are to be treated together as one and the same concentration when calculating the turnover generated in Sweden, for the purpose of establishing whether the turnover thresholds are met.

Answer ... The EU Merger Regulation overrides the Swedish merger control legislation pursuant to the so-called ‘one-stop shop’ principle. Thus, if a transaction meets the turnover thresholds in the EU Merger Regulation, there is no need to determine whether the transaction also meets the turnover thresholds contained in the Swedish merger legislation.

Answer ... As stated in question 2.6, there is a mandatory filing duty if both turnover thresholds are met. If only the first combined turnover threshold is met, the acquiring party has the right to file voluntarily and the Competition Authority has the right to request a filing.

Answer ... The Competition Authority encourages pre-notification discussions. The fact that discussions are taking place and any information provided by parties in their pre-notification contacts with the Competition Authority are completely confidential.

Answer ... The underlying Swedish rule is that a notification must be made either by the merging parties or by the party or parties acquiring control.

Answer ... There are no fees.

Answer ... There is no specific deadline for submitting a notification under the Swedish merger control legislation. The legislation merely stipulates that a proposed concentration which meets the notification thresholds must be notified and cleared prior to implementation.

Answer ... As under the EU Merger Regulation, a notification can be made prior to the conclusion of an agreement constituting a concentration, provided that it can be demonstrated that the parties concerned have a good-faith intention to enter into an agreement. Similarly, notification of a public bid can be made as soon as the intention to make such a bid has been publicly announced (rather than when the formal public bid is launched). As a result, the notification of an acquisition by public bid will thus normally be possible when the bidder has issued a press release pursuant to applicable takeover rules (which require that the broad terms and conditions of the bid be set out).

Answer ... The merger control legislation stipulates that the parties may not take any steps to complete a notified concentration prior to clearance.

Answer ... When a notification has been submitted, the Competition Authority will publish a summary of the concentration on its website. The Competition Authority also publishes decisions to enter into Phase II, clearance decisions and prohibition decisions on its website (while exercising due regard to confidentiality issues).

Confidentiality issues are treated in an unusual fashion in Sweden. There is a constitutional right of public access to official documents (ie, not only to documents that have been drawn up by public authorities such as the Competition Authority, but also to all documents and information that have been submitted to such authorities). In view of this, there are detailed rules in the Public Access to Information and Secrecy Act (2009:400)) which place limits on this basic principle. As a result, information provided by parties in their pre-notification communications with the Competition Authority is covered by absolute secrecy. Thereafter, information will be treated as confidential only if divulging the information to a third party would cause damage to the party concerned. Thus, genuine business secrets will not be disclosed to the public.

Answer ... Swedish merger review consists of a two-step process. The initial Phase I review lasts up to 25 working days from the date of receipt of a complete notification. This period is increased to 35 working days when an undertaking offers commitments during the first 25 working days. At any time during Phase I, the Competition Authority may decide to proceed with a detailed investigation, Phase II. Unlike under the EU Merger Regulation, there is no evidentiary threshold which the Competition Authority must meet to start a Phase II review. In Phase II, the Competition Authority has three months to decide whether to clear (conditionally or subject to remedies) or block the notified transaction. Therefore, the review may last between approximately one to four months.

If the Competition Authority ultimately decides to block a transaction, an appeal can be filed with the Patent and Market Court, which has six months from when the appeal was made to reach a decision. If the decision of the Patent and Market Court is appealed to the Patent and Market Court of Appeal, that court has three months from when the appeal was made to reach a decision. Hence, the review process may be a protracted exercise. However, no measure may be taken against a concentration, whether notified or not, after two years from the date on which the concentration occurred.

Answer ... There is no formal way to accelerate the review. However, pre-notification contacts with the Competition Authority are encouraged and may help to ensure a smooth review process.

The Competition Authority has the power to stop the clock unilaterally, in both Phase I and Phase II. However, this tool can be deployed only if a party fails to meet the Competition Authority’s request for information within the prescribed response time. In Phase I, the clock can also be stopped on request from the notifying party. In its guidance, the Competition Authority states that such a request may be made, for example, where the parties become aware that the authority has identified potential competition problems that they themselves did not foresee, and they wish to have more time in Phase I to clarify that these will not materialise. By doing this, the parties may be able to avoid going into Phase II. In addition, the three-month period in Phase II may be extended, provided that the notifying parties agree to an extension or (if they do not agree) that there are compelling reasons for doing so. To date, the Competition Authority has only requested and obtained extensions with the consent of the notifying parties.

Answer ... There is no short-form notification in Sweden. However, limited information is required when there are no affected markets; and if a notification is preceded by pre-notification contact with the Competition Authority (which is normally the case), it is often possible to obtain waivers for the need to submit certain information in uncontroversial transactions. Moreover, in straightforward cases, clearance may be obtained much faster than the 25-working-day deadline for Phase I. It is not unheard of for cases to be cleared within one week.

Answer ... The Competition Authority participates in the European Competition Network and European Competition Authorities. In addition, Sweden has a cooperation agreement with all Nordic countries, (ie, Denmark, Iceland, Finland and Norway) regarding competition issues which, among other things, facilitates the exchange of information in the area of merger control (provided that the transaction involves an undertaking located in one of the countries concerned). In contrast to what has been established under the EU merger working group, the cooperation between the Nordic authorities allows the exchange of confidential information without a waiver from the parties to the concentration. Consequently, it is safe to assume that any and all information submitted to the Competition Authority may also be made available to those authorities in Denmark, Iceland, Finland and Norway.

Answer ... Under the merger control legislation, the Competition Authority has wide powers to request information which it deems necessary to review a merger from the notifying parties and third parties. The request may be made subject to a fine for default. However, unlike the European Commission, the Competition Authority does not have the possibility to carry out on-the-spot investigations (dawn raids and the like) in relation to merger reviews.

Answer ... When the Competition Authority receives a notification, it publishes a summary of the transaction on its website. Third parties have no formal (legal) standing in the regulatory scrutiny process that follows, but may make their views known to the Competition Authority. In cases where substantive issues may arise, the Competition Authority systematically contacts key competitors, customers and suppliers to obtain information which may be of assistance in the review process; and if remedies are submitted by the notifying parties, these will be market tested.

Answer ... The merger control legislation does not formally provide for the possibility to carve out Sweden and close the remainder of a global transaction.

Answer ... The substantive test is whether the concentration significantly restrains the occurrence or the development of effective competition within the country as a whole, or a substantial part thereof. Therefore, the Swedish test mirrors the so-called ‘significant impediment to competition’ (SIEC) test contained in the EU Merger Regulation.

Answer ... No – but to the extent that the creation of a joint venture which constitutes a concentration in accordance with Chapter 1, Section 9, second paragraph has the aim or effect of coordinating the competitive behaviour of the undertakings ,which remain independent, the potential coordination shall be assessed in accordance with the equivalent of Article 101 of the Treaty on the Functioning of the European Union.

Answer ... The Competition Authority will consider whether the transaction may give rise to an SIEC. In assessing harm, it has increasingly started using economic techniques to vet mergers. For example, the upward pricing pressure method has been explicitly applied in several cases.

The Competition Authority does not consider non-competition related issues. However, public security interests could lead to the clearance of a transaction which meets the SIEC test; although this exception has never been applied.

Answer ... The parties to a concentration may offer remedies to address competition concerns. This is not at all unusual. Such voluntary remedies are often made subject to penalty fines for default. Both structural remedies and behavioural remedies may be accepted.

Answer ... Remedy discussions may be pursued at any stage in the notification process. The parties are responsible for introducing such discussions: the Competition Authority will not propose or dictate possible ways to alleviate any concerns. Normally, parties commence discussions after the Competition Authority has formulated its concerns in its statement of objections in Phase II. In such a scenario, the parties would be well advised to submit their formal remedy proposal three weeks prior to the end of Phase II (in other words, no later than approximately two months into Phase II).

However, remedy discussions may also be started earlier with a view to obtaining clearance in Phase I (in such case, the discussion should be raised early in the process in order to work out a deadline with the Competition Authority, as a decision to proceed to Phase II may be taken at any time in Phase I). In such situations, there is clearly a risk that the parties will propose remedies which go beyond what would be required if the Competition Authority were granted the opportunity to conduct a detailed market analysis in Phase II. It may therefore provide some comfort that the Competition Authority has issued Phase I clearance decisions without making them conditional on the remedies proposed by parties. Irrespective of whether a remedy proposal is submitted in Phase I or II, a non-confidential version must also be submitted, to enable the Competition Authority to proceed with a market-testing exercise.

Answer ... As noted above, foreign-to-foreign mergers are caught by the Competition Act when the turnover thresholds are met, and a foreign transaction can be prohibited if it has an effect on the Swedish market, unless remedies are offered to alleviate those concerns. There have been cases in which foreign parties have offered to divest assets to remedy issues on the Swedish market. However, no foreign-to-foreign merger has, to date, been prohibited.

Answer ... The Competition Authority’s final decisions can be appealed to the Patent and Market Court. The reviewing court will conduct a full review of all facts and evidence.

Answer ... Merger clearance decisions cannot be appealed. It seems unlikely that a party other than the parties to the transaction would appeal a prohibition.

Answer ... As stated above, there are no automatic sanctions for implementing a transaction prior to obtaining clearance and there are thus no automatic sanctions for a failure to notify. However, the Competition Authority has the power to order the parties to notify the transaction, subject to a fine.

Answer ... The merger control legislation stipulates that the parties may not take any steps to complete a notified concentration prior to clearance. There are no automatic sanctions for implementing the transaction during the review period, but the Competition Authority has the power to order that the parties respect the suspension requirement, subject to a fine.

Answer ... Remedies are monitored by the Competition Authority. As mentioned above, negotiated remedies could be subject to a penalty fine for default. Such penalty fines have ranged from SEK 10 million to SEK 100 million

Answer ... The Competition Authority has recently investigated several transactions which fell below the thresholds at which a notification would have been mandatory. Therefore, in cases where the parties’ turnover falls below the mandatory thresholds but, for example, market shares are high, it is worth seriously considering contacting the Competition Authority for pre-notification discussions.

There are no new developments expected in the next 12 months.

Answer ... As noted in question 8, the Competition Authority has recently investigated several transactions which fell below the thresholds at which a notification would have been mandatory. It is therefore worth seriously considering whether to submit a notification where the parties’ turnover falls below the mandatory thresholds but, for example, market shares are high.

Pre-notification discussions will help to ensure a smooth clearance process. To avoid any hold-ups in the timetable, it is important to ensure that the notification is complete.