Finland Competition & Regulatory newsletter spring 2025

This newsletter features a look into developments in Finnish competition and regulatory issues as well as notable recent case law.

The Finnish FDI screening continues to expand; planned reform concerning sector coverage and mandatory filing obligations

In light of the evolving global geopolitical landscape, the Ministry of Economic Affairs and Employment has published an evaluation report on the needs to amend the Finnish Act on Screening of Foreign Corporate Acquisitions, which is the main legal instrument governing foreign direct investment (FDI) in Finland. The report proposes significant changes to the existing law.

The report proposes changes to scope and sectoral coverage

One of the key issues to be considered is the scope of the Finnish FDI rules. Finland's current FDI legislation is flexible, but targets mainly Finnish entities that possess or produce infrastructure, goods and services critical to Finnish authorities due to existing agreements and commitments. The Ministry proposes to broaden the sectoral coverage to new technologies such as AI, semiconductors and biotechnology as well as wind power and cloud services. The proposal suggests that all investments in these sectors would be monitored, including greenfield projects, which are not currently covered by the regime.

Extension of the mandatory and prior filing obligation

The current Finnish FDI regime allows for voluntary ex-post applications in certain situations. The report proposes to extend the obligation to apply so that the application should always be made before the transaction is implemented.

In addition to above, several other proposals regarding, for example, additional shareholding thresholds and two-step review are under consideration. The published report will form the basis for the legislative proposal to be given in autumn 2026 at the latest.

First ever Finnish fine for failure to observe commitments

At the end of October 2024, the Market Court issued its first ever decision imposing a fine (amounting to EUR 600 000) for a failure to observe commitments imposed as a condition for merger control clearance.

The Market Court agreed with Finnish Competition and Consumer Authority's (FCCA) proposal that dairy producer Valio had failed to comply with the commitments. An error in the company's data systems had resulted in the dairy competitors’ price data being disclosed within Valio’s own organisation. Valio had in 2021, as a condition for the approval of the acquisition of food wholesaler Heinon Tukku, committed to block its own dairy business from accessing the price data of competing dairy manufacturers obtained in the wholesaling business. This was because the FCCA had found that internal access to this information would have affected Valio’s incentives concerning its dairy pricing.

According to the Market Court, the failure to comply with the key commitment constituted a material and serious infringement that could not be considered insignificant on any basis. However, the amount of the fine proposed by the FCCA was reduced by one-third as the Market Court found that the infringement was not particularly long in duration. In addition, Valio's co-operation in the case was taken into account by the Market Court as a factor reducing the fine.

The decision is not final and has been appealed to the Supreme Administrative Court.

The Government seeks to attract new investments to Finland with two new aid schemes for green transition

In response to the international competition for investments and the need to ensure economic growth, Finland has introduced two new aid schemes to attract key investments to be implemented in Finland.

In January 2025, the Government adopted a decree on a clean transition aid scheme for industrial investments. The aid is available, for example, for investments in the decarbonisation of industrial production processes through electrification and/or the switch to renewable hydrogen or renewable hydrogen-derived fuels, investments in energy efficiency, as well as investments in the production of strategic equipment such as batteries, solar panels, wind turbines, heat-pumps, electrolysers and carbon capture, usage and storage. The aid is granted in the form of direct grants of up to EUR 150–200 million for large investment projects with eligible costs of at least EUR 30 million.

In parallel, the Government proposed to the Parliament in December 2024 a new tax credit for large industrial projects. In addition to the types of investments covered by the investment aid scheme, the tax credit would be available for investments in the production of energy from renewable sources as well as energy storage. The tax credit of up to EUR 150 million could be awarded to investments with at least EUR 50 million of eligible costs and it would be deducted from the company's income tax in the course of twenty years. The European Commission approved the aid scheme in February 2025, and the legislation is expected to be adopted soon.

Finland's Minister of Finance Riikka Purra has previously estimated that there are around thirty large investment projects that could be eligible for the tax credit, potentially resulting in billions of euros of investments in Finland.

The reform of Finnish public procurement rules goes forward: working group proposal for changes published

In January 2025, the Ministry of Economic Affairs and Employment released a working group report that includes proposals to update Finnish public procurement rules. The proposed changes are intended to enter into force in 2026 following a government proposal expected later this year.

One key focus of the reform is the regulation of in-house procurement. The report suggests restricting direct procurement from in-house entities by imposing a 10% minimum ownership requirement in the in-house entity. The minimum ownership requirement is proposed to apply from 1 July 2027 for most business sectors.

Other significant changes to the procurement rules include the following:

• Contracting entities would be required to conduct a market consultation or assessment of alternative options in procurements with a value exceeding EUR 10 million.
• A procurement procedure would have to be started over in certain circumstances if only one tender is received.
• The division of procurements into lots when EU thresholds are exceeded would be enforced stricter than before, including the possibility to appeal division decisions.

According to the report, the planned changes aim to improve security of supply, procurement responsibility, and environmental considerations by incorporating certain new security measures into the procurement process and contract period. To attain these goals, the proposal introduces new mandatory exclusion criteria for convictions related to serious accounting or environmental offences. In addition, a proposed discretionary exclusion criterion would allow the rejection of tenderers that pose an apparent national or local security risk. Security and supply preparedness would also be strengthened by allowing the contracting authority to impose conditions relating to the origin of goods, geographical location and compliance requirements throughout the duration of the contract.