Insights | December 20, 2018

After a long silent period, the FCCA has issued a fining proposal against ThermiSol Oy and UK-Muovi Oy alleging a cartel in EPS insulation

On 4 December 2018, the Finnish Competition and Consumer Authority (“FCCA”) proposed that the Finnish Market Court impose a fine of EUR 4.3 million on two companies manufacturing EPS insulation, ThermiSol Oy and UK-Muovi Oy, for their participation in a cartel on the market for EPS insulation in Finland. A third company, Styroplast, was granted immunity from a fine as it was the first to reveal the existence of the cartel and provided additional information to the FCCA.

According to the FCCA, the three largest manufacturers of EPS insulation in Finland had operated an illegal nationwide price cartel during the years 2012–2014. The manufacturers allegedly agreed on, inter alia, amounts and timing of price increases, thus restricting competition on the market. The FCCA states that that both individual consumers and businesses as well as the public sector suffered from the negative effects of the cartel and increased construction costs. Moreover, the timing of the agreed price increases was in the FCCA’s view particularly harmful, as it contributed to profit maximization.

In its decision, the FCCA expressly stated that the nature, extent, degree of gravity, and duration of the cartel would have called for significantly higher penalty payments. However, the Finnish Competition Act prevented the authority from proposing sanctions higher than ten per cent of the undertaking’s turnover during the year when it was last involved in the infringement.

Since the entry into office of the FCCA’s new Director General, Mrs Kirsi Leivo, the FCCA has clearly stated that fines should be higher in order to increase their deterrent effect and underline that participation in a cartel would be seriously harmful for a company.

Source: Finnish Competition and Consumer Authority Press Release 04/12/18 (in Finnish) , The FCCA’s penalty payment proposal on 4 December 2012, case number 1182/KKV14.00.00/2015 (in Finnish)

This article was co-authored with Aino Jankari, Associate Trainee EU&Competition