New tools to strengthen competition in the private and public sectors in Sweden – part 1 – a new act on public commercial activities

On 17 March 2026, the Swedish Government submitted the bill “New tools to strengthen competition in the private and public sectors” (prop. 2025/26:203; the “Bill”) to the Swedish Parliament. The Bill contains proposals for a new act on public commercial activities (the “Act”) and significant amendments to the Competition Act, including a new competition tool and revised merger control rules. Notably, the new rules are proposed to enter into force already on 1 August 2026 and are likely to have a far-reaching impact on both public and private market participants.

In a series of three blog posts, we will examine the proposals in detail. In this first post, we focus on the proposed Act, outlining how it raises the bar for public actors competing with the private sector and why it signals a major shift in enforcement.

Background

The inquiry “Improved Competition in the Public and Private Sectors” was published on 7 March 2025 and was followed by a public consultation (please refer to our previous blog post here). After consideration of the responses received, the Government published its referral to the Council on Legislation on 12 February 2026 (please refer to our previous blog post here). Following its meeting on 4 March 2026, the Council issued an opinion raising no substantive objections. The Government has now submitted the Bill to the Parliament.

The Swedish Parliament is now set to vote on the proposals. Subject to the approval of the Parliament, the proposed amendments and the new Act are scheduled to enter into force on 1 August 2026, with the exception of the rules on evaluation and separate accounting for public entities under the new Act, which are proposed to enter into force on 1 January 2027.

The main objectives of the new Act

The background to the Act is described in detail in the Bill. Public commercial entities have certain advantages in a competitive setting. Generally, they can conduct commercial activities without being required to generate a profit, are insulated from insolvency risks, and have, in some cases, the ability to take advantage of public authority. These benefits may undermine the conditions of competition on the merits. To address these issues, rules on public sales activities currently exist in the Swedish Competition Act.

The impact of the current rules has proven very limited in practice. For example, they require the relevant market to be defined before action can be taken, a process that is time-consuming and resource-intensive. In several cases, the market has been defined more broadly than the local market where the private actor is present. As a result, the effects have been deemed too insignificant. The current legislation has therefore been criticised for giving insufficient weight to the impact of public sales activities on private actors.

The Act is proposed to focus more specifically on protecting private entities from unfair conditions that may arise when public and private operators act on the same market, or when private initiatives may not be launched due to the public presence, rather than addressing these issues purely from a competition law perspective.

A new prohibition

The Bill proposes to prohibit public actors from conducting commercial activities and take actions that unfairly affect private actors’ ability to operate in the market. The term “unfairly affect” refers to situations where a public actor carries out activities or applies procedures that differ from how a private company would act, thereby disadvantaging private actors in the market. Examples include predatory pricing, discrimination and refusal to grant access to essential infrastructure.

A key difference compared with the existing provisions in the Competition Act is that the Act may apply to all public actors. This includes the State, municipalities and regions, as well as publicly held companies. Publicly held companies are defined as legal persons that conduct commercial activities and over which the State, a municipality or a region exercises, directly or indirectly, a dominant influence through ownership, financial participation, applicable rules or otherwise. The legal form of the entity is irrelevant, provided that the activities are carried out through a legal person.

In line with the current provisions, public sales activities are proposed to be covered, encompassing “economic activities”, corresponding to the equivalent concept in competition law. Sales activities are thus intended to cover the supply of goods, services or other utilities on the market, provided that such activities do not involve the exercise of public authority.

Not all public commercial activities, however, are subject to the Act. Public commercial activities compliant with decisions of the Swedish Parliament or Government, or activities otherwise justified on grounds of public interest are exempted from the prohibition. The assessment of whether public commercial activities are justified on grounds of public interest shall be carried out in the same manner as required under the current legislation. The assessment is based on a balancing of interests, and the starting point should be that it concerns external motives, for example if a public commercial company provides goods and services with a motive of remedying a market failure.

Additional obligations on reporting and evaluations imposed on public entities

When public entities engage in commercial activities, the Act requires them to prepare an annual financial report describing the organisation and financing of those activities. The report must also separate the revenues and costs of commercial activities from those of other activities. In addition, public commercial entities must evaluate every four years how their commercial activities comply with the Act and document the results of the evaluation.

Enforcement

The Swedish Competition Authority (the “SCA”) is the supervisory authority responsible for overseeing public commercial activities and will continue to hold this role under the Act. However, the Bill also proposes that the SCA shall be responsible for enforcing the Act. This differs from the current framework, under which the SCA must bring proceedings before the Patent and Market Court to obtain a decision. Under the proposed system, the SCA would instead have the authority to determine whether the prohibition under the Act has been infringed.

The SCA will be able to issue orders requiring a public actor, a company or any other party to provide information, documents or other material necessary to supervise compliance with the Act. The SCA may also issue orders requiring a person who may be able to provide information to appear for an interview. An order to provide certain information does not, however, apply to written documents covered by legal privilege or information of significance to Swedish national security.

To further ensure compliance, the SCA will be able to issue orders requiring a public actor to cease violating the prohibition, as well as issue decisions to accept commitments. Further, the SCA may combine orders requiring investigative measures, orders requiring cessation of a violation, and decisions to accept commitments, subject to penalty of a fine. It may also impose interim measures.

In cases of deliberate or negligent violations of the prohibition, the SCA will further be able to impose market disruption fees of up to SEK 20 million (approx. EUR 1.8 million).

Appeals

Appeals against the SCA’s decisions are proposed to be handled by the Administrative Courts, rather than the Patent and Market Court as is the case today. Although the proposed Act touches on questions of competitiveness, the Act approaches the area from a different perspective. In particular, the assessment of whether a public commercial entity unfairly affects the market requires an evaluation of municipal and regional competence, a question classically handled by the Administrative Courts, which is one of the main reasons behind this proposed change.

Concluding remarks

The proposal for the Act represents a significant shift in Swedish competition law. The purpose of the Act is to strengthen competition between private and public operators, increase transparency, and prevent unfair advantages for public commercial activities over private companies. Although the Act seeks to remedy previous shortcomings, uncertainty remains regarding, inter alia, the meaning of “unfairly affect”. Whether the new prohibition will function effectively in practice remains to be seen.

Further, the proposal will impose greater responsibilities on public entities in their commercial activities, including requirements for annual financial reports as well as periodic self-evaluations. One may question whether the Act will make it more difficult to conduct public commercial activities, but that too remains to be seen.

As mentioned in previous blog posts, we recommend both public and private entities involved in commercial activities to monitor the legislative process. When enacted, we also recommend evaluating whether the Act provides grounds for challenging unfair public commercial activities in areas where both public and private entities compete.

Delphi will continue to monitor the Act and provide insights and updates related to the legislative process.