Highlight 11 October 2016

Krogerus advises SOK on a competition law investigation into the S-Etukortti loyal customer card scheme

Krogerus advised Suomen Osuuskauppojen Keskuskunta (SOK) on an abuse of dominance investigation by the Finnish Competition and Consumer Authority (FCCA) into SOK's S-Etukortti loyal customer card scheme. The FCCA closed the investigation on 11 October 2016, stating that it had found no evidence of a prohibited abuse. The FCCA's decision can be found here.

The Finnish Competition Act was amended in 2013 to include a provision that a market share of 30 per cent or more in the groceries retail sector automatically results in a dominant market position. After the amendment, the FCCA initiated extensive investigations into loyal customer cards offered by Finland's largest grocery groups, the S and the K group.

Loyal customer card schemes may be considered as a rebate system from a competition law perspective. The FCCA analysed the characteristics of SOK's Bonus rebate system and SOK's market power as well as consumer behaviour and competitors' competition opportunities to determine whether the scheme had fidelity-building anti-competitive effects. No evidence of such effects was found.

SOK operates as the central organisation of the cooperative enterprises in the S group. In 2015, there were more than 2.2 million S-Etukortti card holders, who were able to accrue the Bonus rebate from approximately 2,000 establishments. Sales that accrued Bonus to card holders exceeded EUR 9 billion.

The Krogerus team consisted of partner Leena Lindberg and associate Jarno Käkelä.

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