Expanded Polystyrene (EPS) Insulation Materials Cartel: Judgment Of The Finnish Supreme Administrative Court Clarifies The Assessment Of Evidence And The Level Of Antitrust Fines

In its judgment delivered on July 1, 2022, the Finnish Supreme Administrative Court (“SAC”) reviewed on appeal the prior judgment issued by the Finnish Market Court in 2021 regarding anticompetitive practices between three competing EPS insulation materials manufacturers. One of the companies involved in the infringement had been granted full immunity from fines, as it had informed the Finnish Competition and Consumer Authority (“FCCA”) of the anticompetitive practices. An aggregate fine of 3.2 million euros was imposed on the other two companies.

The SAC confirmed on appeal the finding of a serious infringement. The SAC found that the three main Finnish EPS insulation materials manufacturers had agreed on prices, including the timing and manner of executing price increases for their products. The geographic scope of the anticompetitive practices was held to have covered the whole of Finland and the practices had lasted from November 2012 to summer of 2014.

The SAC judgment is focused on two specific legal issues, which were raised by the defendant company. First, the probative value of oral statements made by a leniency applicant’s representative, and second, the reasonableness of the amount of the fine imposed in the specific case.

On the probative value of oral leniency statements

The SAC found that by virtue of the principle of free assessment of evidence, the Market Court was allowed to base its assessment of the credibility and significance of evidence on all issues presented to the court in the case. When evaluating the value of a leniency applicant’s oral statements, the court could rely on criteria, including for high probative value evidence, established in the European Courts’ jurisprudence. However, such criteria should not be applied in a mechanical way according to the SAC, and thus the probative value of a leniency applicant’s oral statements could be considered high even if not all criteria were met. At the same time, given the principle of free assessment of evidence, it does not follow that where the criteria are met, a leniency applicant’s statement has higher probative value as evidence than other evidence presented in the case.

According to the SAC, in the specific case the Market Court’s findings were not entirely based on the leniency applicant’s oral evidence but also on other, written, evidence. The Market Court had in its judgment assessed which other pieces of evidence, and to what extent, corroborated the leniency applicant’s oral statements. The SAC confirmed that the Market Court was allowed to hold, when considering the overall body of evidence, that the leniency applicant’s statements were more credible than statements made on behalf of the other two companies involved in the anticompetitive practices.

On the level of fines imposed

The SAC held in its judgment that in accordance with national competition law, the level of fines is based on the nature of the infringement and the infringing company’s conduct. The SAC considered that notwithstanding the requirements of legal certainty (predictability) and equal treatment, the judicial praxis on the level of fines may develop over time and the actual level imposed depends on the specificities of the individual case as well as the general requirements for deterrence. In the present case, the SAC confirmed that a fine of 1.2 million euros imposed on the defendant company was appropriate, having regard to the nature of the anticompetitive practices and the prior judicial praxis.

The SAC judgment indicates that the assessment of evidence and the level of fines in antitrust cases in Finland have moved closer to the practice of the European Commission and the European Courts’ jurisprudence. The SAC judgment also confirms that even though a leniency applicant’s oral statements may have a strong probative value, the Finnish courts apply the principle of free assessment of evidence in antitrust cases.

The SAC’s judgment also underlines the importance of the leniency policy in the national antitrust enforcement, in particular to uncover evidence on secret, anticompetitive practices. In Finland, only the first company to reveal the existence of anticompetitive practices to the FCCA may benefit from immunity from fines. This acts as an incentive for companies to uncover illegal practices to the enforcement authority. At the same time, other participating companies may benefit from a reduction in the level of fines, in return for cooperation with the FCCA, most notably by providing additional and novel information and evidence on the suspected infringement.

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