Broader Powers for Consumer Authorities, Part 3: New Finnish and Swedish Legislation Enters into Force in July 2020

Authors: Sarita Schröder, Jessica Tressfeldt, and Linda Björkenheim

As described in more detail in our previous blog posts (here and here), both Finland and Sweden are adopting new legislation that is intended to ensure the effective application of the Consumer Protection Cooperation Regulation (Regulation (EU) 2017/2394) but that also entails a broadening of the consumer authorities’ investigation and enforcement powers beyond its requirements.

In Sweden, the new legislation entered into force on 1 July 2020 mostly in accordance with the proposal. In Finland, the new legislation was approved by the Parliament on 22 June 2020, and it is expected to enter into force mostly in accordance with the proposal in July 2020, once it has been ratified by the President. (Update: the Finnish legislation was ratified on 9 July 2020, and it will enter into force on 15 July 2020.)

The most substantial changes in the new legislation consist of:

• Improved rights for the Finnish Consumer Ombudsman (the “FCO”) and the Swedish Consumer Ombudsman (the “SCO”) to direct information requests either at a trader suspected of an infringement or a third party – in some cases under penalty of a fine.
• The right for the FCO to carry out on-site inspections also in private residences to the extent that they are used to conduct business and provided that inspecting such premises is indispensable for the FCO’s investigation. The SCO is also entitled to carry out on-site inspections, and in contrast to the proposal, such right will not exclude private residences.
• The right for the FCO and SCO to carry out test purchases – in some cases also under a cover identity – in order to detect infringements and obtain evidence concerning them.
• The power for the FCO and the SCO to order the explicit display of a warning to consumers when they access an online interface that is not in compliance with consumer protection legislation. In addition, the FCO’s arsenal of online enforcement measures will include the power to order the removal of content, the restriction of access to an online interface, and the deletion of a domain name and the registration of that domain name to the authority.
• The FCO’s right to petition the Market Court to impose administrative fines of up to 4% of a trader’s relevant turnover as a consequence of consumer law violations. Under exceptional circumstances, the FCO may also petition the Market Court to issue fines on the directors of the breaching entity, or on other natural persons controlling that entity. In such case, the maximum amount of the fine is 4% of the relevant income of the person or EUR 40,000, whichever is lower. In Sweden, provisions enabling the SCO to petition the Patent and Market Court to impose a so-called market disruption fine (in Swedish: marknadsstörningsavgift) have been in force for well over two decades now. The fine can be set within the range of SEK 10,000 to SEK 10,000,000 (approx. EUR 1,000 to EUR 1,000,000), but cannot exceed 10% of the trader’s relevant turnover.
• A reversal of the injunction procedure in Finland. Going forward, an injunction issued by the FCO will no longer be voided if the party subject to it opposes it in writing or orally within a deadline of at least eight days. Instead, an injunction issued by the FCO will become permanent unless the party subject to it brings the case before the Market Court within a 30-day deadline. The party subject to the injunction issued by the FCO is obligated to abide by it for the duration of the proceedings unless the Market Court decides otherwise.

For more information, please see our previous blog posts on the topic.

• Broader Powers for Consumer Authorities, Part 1: Investigation
• Broader Powers for Consumer Authorities, Part 2: Enforcement

Our consumer law experts in Helsinki and Stockholm are on hand to provide further information on the new legislation and assistance in ensuring compliance with EU and national consumer protection rules.