Competition
Everyone benefits from effective competition. When companies compete, they become more efficient. This leads to higher quality, lower prices, and more innovation. To prevent competition from being distorted, there are rules that must be followed.
Prices must not be controlled
If a supplier attempts to control the price you set for the goods or services you sell, it may harm competition. Therefore, it is important not to let others restrict your ability to set the prices you want. An example of prohibited price control is when a supplier and a retailer agree on a minimum price that the retailer can charge. Another example is if a supplier believes that retailers’ margins are too low, and forces them to increase their margins by charging a higher price to consumers. Trade associations are also not allowed to use price lists, for example, to control the price that your company, as a member, must adhere to.
Therefore, keep in mind:
- Do not enter into agreements or otherwise negotiate with another party about what price you may or may not charge for what you are selling.
- Price recommendations that retailers must follow, whether from suppliers or industry organisations, are not allowed.
Price signalling
You are also not allowed to communicate about the prices you plan to set. This sends signals to other companies, your competitors, about the prices they can charge for their goods or services.
Cooperation between competing companies
Markets thrive when several companies compete with each other. Therefore, it may be illegal if your company cooperates with another company that sells or could easily start selling the same or a similar product or service as your company.
Cartels are a particularly serious form of prohibited cooperation between competing companies. These can, for example, involve agreements among companies on the prices or discounts to be offered, or agreements to divide the market or customers among them.
The Swedish Competition Authority is the authority that investigates suspected cartels. Companies that participate in a cartel can face high fines for harming competition. If your company is or has been involved in a cartel and is the first to report it, your company may be exempted from fines.
For information on cartels, visit the Swedish Competition Authority's website
Contact the Swedish Competition Authority and leave a cartel
Acquiring or merging with another company
If a company wants to acquire another company, or if two or more companies want to merge, it is called a merger. Mergers can result in stronger and more efficient companies with reduced costs for you as a business owner and lower prices for consumers. However, if the merger contributes to preventing or restricting competition, it may be prohibited by the Swedish Competition Authority.
Smaller companies can often acquire or merge with another company without requiring approval from the Swedish Competition Authority because their turnover does not reach the thresholds set by the competition rules. However, small companies can be the company being acquired in mergers involving larger companies as buyers. In such cases, the merger may need approval from the Swedish Competition Authority before the purchase can proceed.
For information on mergers, visit the Swedish Competition Authority's website
Unfair competition between public and private undertakings
The state, municipalities, and regions operate under different conditions to private companies. Since public entities are financed or owned by the state, municipalities, or regions, they have a secure foundation to operate from, unlike private companies. This can lead to competition issues, for example if the public entity alone has access to essential infrastructure, or if it engages in both the exercise of public authority and commercial activities at the same time. One example is when companies need permits from a municipality to conduct their operations, while at the same time the municipality is also engaged in similar activities in-house.
To ensure fair competition between public and private entities, there are rules in place to prevent the public sector from distorting competition. In competition law, this is referred to as anticompetitive public sales activities. If a public entity violates these rules, it may be compelled to cease the activity. If it continues, it may be subject to fines.