Q&A: vertical agreements in Sweden
Vertical agreements
Special rules and exceptions
Do any special rules or exceptions apply to the assessment of anticompetitive agreements between companies operating at different levels of the supply chain in digital markets in your jurisdiction?
The same rules and exceptions apply when assessing anti-competitive agreements between competitors in digital markets as in non-digital markets.
Ban on online sales
How has the competition authority in your jurisdiction dealt with absolute bans on online sales in digital marketplaces?
As far as we know, the Swedish Competition Authority (SCA) has not assessed any such cases.
Resale price maintenance
How has the competition authority in your jurisdiction addressed online retail price enforcement?
In SCA’s decision i Groundwork (Case no. 59/2019) SCA found that Markslöjd had encouraged the retailer to raise its prices and limited the retailer’s ability to carry out orders from Markslöjd if the prices were not raised. The SCA concluded that a vertical restraint in the form of resale price maintenance (RPM) in an e-commerce market could potentially have very serious consequences for end consumers. The parties had entered into an agreement which meant that the retailer partially adjusted the prices according to Markslöjd’s requirements. SCA’s investigation began after the retailer submitted an application for preferential treatment regarding the anti-competitive cooperation between the parties. Markslöjd accepted SCA’s imposition of a fine.
SCA’s decision i 13th Protein import (case no. 559/2013) could still be mentioned here. The case involved a clear RPM practice. However, after a thorough investigation, SCA decided not to investigate RPM practices further due to the supplier’s limited market share (under 3 percent) and the presence of a strong competitive landscape. In essence, SCA applied an impact-based approach even though the limitation was of a “per item” nature.
The SCA is currently investigating whether Finnair’s measure restricting online travel agencies from advertising discounts is a breach of Chapter 2, Paragraph 1 of the Competition Act and possibly also Article 101 of the TFEU. According to the complainant, Finnair had informed online travel agencies that the price advertised online could not deviate from the price established by the airline in the global distribution system. The airline has made voluntary commitments to remedy SCA’s concerns, where the airline undertakes to suspend the requirement for the online travel agencies operating in Sweden. At the time of writing, July 2022, SCA has given several online travel agencies the opportunity to comment on Finnair’s voluntary commitments (case no. 111/2020).
Geoblocking and territorial restrictions
How has the competition authority in your jurisdiction addressed geo-blocking and other territorial restrictions?
As far as we know, SCA has not assessed any such cases.
Platform ban
How has the competition authority in your jurisdiction addressed supplier-imposed restrictions on distributors’ use of online platforms or marketplaces and restrictions on online platform operators themselves?
SCA has assessed two cases concerning exclusivity obligations that the platforms imposed on their customers. IN Online pizza (Case No. 658/2015), the agreement between Onlinepizza, an online takeaway platform provider, and the restaurants restricted the restaurants from also entering into agreements with competing platforms. If the restaurants entered into agreements with competing platforms, Onlinepizza had the right to terminate the agreement. The SCA investigated the exclusivity obligations but closed the case without action following Onlinepizza’s commitment to amend the relevant term. IN ME WITH BRUCE (Case No. 572/2019), the agreement between IM WITH BRUCE, a fitness aggregator, and fitness centers imposed an exclusivity obligation on the fitness centers not to enter into agreements with competing fitness aggregators. During the investigation, the SCA imposed interim measures preventing IM WITH BRUCE from applying the exclusivity obligations during the investigation. IM WITH BRUCE contested the interim measures, but the Patent and Market Court upheld SCA’s decision (PMÄ 17901-19). Ultimately, SCA closed the case in July 2020 after IM WITH BRUCE undertook not to apply exclusivity obligations in its agreements.
Targeted advertising online
How has the competition authority in your jurisdiction addressed restrictions on using or bidding on a manufacturer’s brand for the purpose of targeting online advertising?
As far as we know, SCA has not taken up any such cases.
Most-favoured-nation clauses
How has the competition authority in your jurisdiction dealt with most-favoured-nation clauses?
IN Booking.com (case no. 596/2013) and Expedia (Case no. 595/2013) SCA investigated most-favoured-customer clauses at retail level and parity clauses regarding price. The parity clauses applied by the market participants required the hotels to offer their rooms on the platforms at terms no less favorable compared to competing platforms (horizontal parity clause) and the hotels’ own websites (vertical parity clause). The parity clauses covered only prices that were generally available. The SCA considered the horizontal parity clauses to be restrictive due to the creation of price uniformity between both online booking websites and online travel agency websites. Booking.com and Expedia both offered undertakings to change the terms and conditions and not to apply the horizontal parity clauses and consequently the SCA closed its investigation.
The SCA decided not to comply with the vertical parity clauses as they were not considered to be as harmful to competition as the horizontal parity clauses. However, Visita, the trade and employer organization representing the Swedish hospitality sector, brought a subsequent private enforcement action against Booking.com and successfully asked the Patent and Markets Court to order Booking.com to cease its application of vertical parity clauses. In May 2019, the Patents and Markets Court of Appeal announced its judgment (PMT 7779-18) overturning the Patents and Markets Court’s judgment. The Patents and Markets Court found that Visita had not proved that the vertical parity clause was restrictive of competition, either by object or effect, in the identified relevant markets.
Versatile digital markets
How has the competition authority in your jurisdiction addressed vertical restraints imposed on diverse digital markets? How have potential efficiency arguments been addressed?
As far as we know, SCA has not assessed any such cases.
Other problems
Have any other key issues arisen in your jurisdiction in relation to the application of competition law to vertical agreements in digital markets?
To our knowledge, no other key issues have been noted by the SCA.