Finnish High Court Draws the Line on Valio’s Heinon Tukku Merger Breach

Key Takeaways

• Penalty Upheld: Finland’s Supreme Administrative Court confirmed a €600,000 penalty against Valio for breaching conditions tied to its acquisition of Heinon Tukku.
• Regulator’s Appeal Rejected: The court declined the Finnish Competition and Consumer Authority’s request to increase the fine to €900,000.
• IT Safeguards Failed: An internal firewall error allowed access to competitors’ pricing data, undermining commitments made during merger approval.
• Behavioral Remedies Under Scrutiny: The ruling highlights legal uncertainty and enforcement risks linked to behavioral commitments in merger control.
• Structural Fixes Favored: The case reinforces regulators’ preference for structural remedies, such as divestments, over complex conduct-based commitments.

Deep Dive

The Supreme Administrative Court of Finland has drawn a firm line under a long-running merger dispute, leaving intact a €600,000 penalty imposed on Valio for breaching conditions attached to its acquisition of foodservice wholesaler Heinon Tukku.

In a decision issued on January 16, the court rejected an appeal by the Finnish Competition and Consumer Authority to raise the fine, concluding that the Market Court had been entitled to settle on the lower amount.

The roots of the case stretch back to 2021, when the FCCA gave only conditional approval to Valio’s purchase of Heinon Tukku. Regulators were concerned that the deal, as structured, would allow Valio to gain insight into competitors’ pricing through Heinon Tukku’s wholesale operations, information that could subtly but materially influence Valio’s own pricing decisions. To clear the transaction, Valio committed to ring-fencing competitors’ confidential price data and ensuring it would not reach staff responsible for pricing Valio’s products.

That safeguard later proved porous. At the end of 2022, Valio alerted the FCCA to an error in its IT firewall that had, for several months, allowed personnel at Valio Aimo, its foodservice sales arm, access to competitors’ price information. The disclosure prompted the authority to take the matter to the Market Court the following year, arguing that Valio had breached a core condition of the merger approval and seeking a €900,000 penalty.

The Market Court agreed that Valio had failed to comply with its commitments and described the lapse as a serious competition infringement. It nevertheless stopped short of the full amount sought by the authority, finding the breach more limited in scope than alleged and setting the penalty at €600,000 instead.

That assessment now stands. In its ruling, the Supreme Administrative Court focused on a narrow but decisive question: when, exactly, did the obligation to protect competitors’ price information apply to staff at Heinon Tukku? The FCCA argued it should have applied immediately when the acquisition was implemented. The courts took a different view, holding that the wording of the commitments explicitly bound only Valio’s employees and extended to Heinon Tukku personnel only after the wholesaler was formally merged into Valio during a later internal restructuring.

The decision goes beyond the fate of a single fine. Both courts acknowledged that Valio’s commitments did not fully eliminate the competition concerns identified at the time of approval. From the moment the acquisition closed, Heinon Tukku was under Valio’s control and part of the Valio Group, meaning its employees’ pricing incentives aligned with Valio’s even before the internal merger took place. That created a window in which competitors’ pricing information could, at least in theory, influence how Valio’s own products were priced.

For regulators, the case is another reminder of the limits of behavioral remedies. Merger control is meant to prevent markets from becoming harmfully concentrated, and when problems arise, structural fixes, such as divestments, are generally preferred. Behavioral commitments, by contrast, are complex, drafted under tight timelines, and difficult to monitor in practice.

As FCCA Head of Research Lauri Kirkkola noted in the authority’s commentary on the ruling, the uncertainty surrounding how such commitments are interpreted and enforced will have to be weighed carefully in future merger cases.

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