New tools to strengthen competition in the private and public sectors in Sweden – part 2 – a new competition tool
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 examine the proposals in detail. Please find our first post regarding the new Act here. In this second post, we focus on the new competition tool, outlining its background and motives, the key features of the tool, and its potential implications for businesses operating in Sweden.
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 concerning the new competition tool are scheduled to enter into force on 1 August 2026.
A New Competition Tool – background and motives
In its Bill, the Government has largely endorsed the inquiry’s recommendations and proposes to introduce the much-debated new competition tool into Swedish law. Under the proposal, the Swedish Competition Authority (the “SCA”) would be granted the power to impose ex ante behavioural measures on whole markets or individual companies, even absent any violation of competition law.
Under current Swedish competition law, enforcement is triggered by specific events, e.g., the (suspected) existence of a cartel, a vertical restraint, or an abuse of dominance. Thus, any remedies must be tied to the specific infringement concerned. However, the Bill identifies a category of recurring obstacles to competition that are structural or market-wide in nature. Such obstacles may arise, for instance, in so-called tipped markets, where a company has gained such a significant head start that competitors are effectively unable to catch up. While the SCA may, under certain circumstances, already intervene against such conduct under the prohibition on abuse of dominance, such enforcement addresses only the specific behaviour at issue and not the underlying structural problem, namely that the company enjoys such significant advantages on the market that competition is impeded. Other examples include markets characterised by high switching costs, such as fees payable upon changing supplier or significant costs associated with migrating data from an existing provider to a new one, as well as tacit coordination in oligopolistic markets.
To address these perceived gaps, where traditional enforcement may prove ineffective, the Government proposes to supplement existing competition law with a new framework of “competition-promoting measures” (Sw. konkurrensfrämjande åtgärder), designed to remedy markets where competition is not functioning effectively. The new tool would be incorporated into the Competition Act as a new chapter (Chapter 3a), and the SCA would be designated as the decision-making body.
The Government agrees with the inquiry’s assessment that the new tool would fill a regulatory gap and is likely to generate economic benefits for private actors, consumers and society at large. While the Bill acknowledges that the exercise of these powers may increase administrative costs for both authorities and companies, it considers such costs to be negligible. Moreover, any measures imposed would be required to be proportionate to their intended purpose.
The key features of the New Competition Tool
Under the new rules, the SCA may open an investigation where there are grounds to assume that the conditions for a competition-promoting injunction are met. The decision to initiate an investigation must be published and must specify (i) the market or markets concerned and (ii) the obstacle or obstacles that any proposed measures are intended to remove. The bar for opening an investigation is intentionally set low. It is sufficient that there are indications of obstacles to effective competition and that the SCA considers measures to be necessary to address them.
Where the SCA concludes, following its investigation, that obstacles to effective competition exist in one or more markets, it may order one or more companies to take the behavioural measures necessary to remove such obstacles. For example, the SCA could prohibit certain contractual terms or impose an obligation on a company to grant competitors access to infrastructure. Importantly, the measures must be tied to the specific obstacle or obstacles identified; the tool does not confer a general mandate to improve competition in a broad or unqualified sense.
A significant and deliberate limitation in the Government’s proposal is that the new tool is restricted to behavioural measures. An injunction may not include structural measures, such as requirements to divest property. The Government considers that forced divestitures, in the absence of a competition law infringement, would constitute an excessively far-reaching interference with property rights and has therefore explicitly excluded them. This is a notable departure from the inquiry, which had proposed the possibility of structural remedies.
Where several measures would be equally effective, the SCA must choose the least burdensome option for the company concerned. General proportionality requirements under Swedish administrative law also apply.
No minimum threshold for intervention
The Government has explicitly rejected introducing a higher threshold for intervention, such as requiring “significant” or “substantial” obstacles to competition. It argues that a lower threshold enables the SCA to intervene against less severe impediments to competition that can be addressed through simpler measures, such as information initiatives. By comparison, the Danish, Norwegian, Icelandic and German ex ante instruments require the relevant competition authorities to perform a market analysis to determine the existence of a competition issue and the need for ex ante intervention.
Commitments as an alternative to an injunction
Rather than proceeding with a formal injunction, the SCA may accept binding commitments offered by a company. While a commitment decision is in force, the SCA may not impose an injunction in respect of the same subject matter. This creates an incentive for companies to engage constructively with the SCA at an early stage of the proceedings.
Public consultation prior to any decision
Prior to adopting an order or accepting commitments, the SCA must publish a draft decision for public consultation. Interested parties may submit comments within the time limit set by the SCA, and the SCA shall publish all comments received. The Government’s rationale is that competition-promoting measures can affect a wide range of actors, and that input should therefore be gathered broadly; from the investigated company, other market participants, interest groups, and relevant authorities, particularly in regulated sectors.
12-month deadline for the SCA’s adoption of decisions
The SCA must adopt its decision, whether an order or an acceptance of commitments, within 12 months from the date of publication of the opening decision. The Government has opted for 12 months, with no possibility of extension, on the basis that the SCA will typically have undertaken preparatory work before formally opening an investigation, and that longer timelines would create unnecessary uncertainty for companies. This represents a considerably stricter time limit than the 24 months proposed in the inquiry.
Enforcement and appeals
Both injunctions and commitment decisions may be subject to a penalty payment (Sw. vite), to ensure compliance. In addition, the existing regime of investigation fines (Sw. utredningsskadeavgifter) is extended to apply to investigations under the new rules. This means that companies may be fined for providing incorrect or misleading information, or for failing to provide information requested by the SCA during an investigation.
Injunctions and commitment decisions may be appealed to the Patent and Market Courts. However, neither a decision to accept commitments nor a decision to open an investigation may be appealed.
Concluding remarks
The new competition tool will launch a new era in Swedish competition law enforcement. The practical implementation and interpretation of the new tool by the SCA, and ultimately by the Patent and Market Courts, remains to be seen but will be decisive in determining its impact on the Swedish competitive landscape.
The new competition tool has attracted significant criticism from the business community. Opponents argue that the proposal exposes companies to an unacceptable degree of unpredictability, increases administrative costs, and risks creating disincentives for growth and investment. In our view, the Government’s assertion that the costs for companies subject to investigation will be negligible appears optimistic at best. On the contrary, the broad discretion afforded to the SCA, combined with the low threshold for opening investigations and the absence of a materiality requirement, may generate considerable uncertainty for businesses, particularly in oligopolistic markets or markets where competition has historically been perceived as not functioning effectively.
The Government’s position, that forced divestitures in the absence of a competition law infringement would constitute a disproportionate interference with property rights, provides an important safeguard for companies. By limiting the tool to behavioural measures, the proposal reduces the risk of far-reaching interventions and enhances predictability for affected businesses, while still enabling the SCA to address perceived competition concerns.
We recommend that companies, in particular those operating in concentrated markets or sectors subject to regulatory scrutiny, proactively review their market positions and commercial strategies in light of the proposed rules.
Delphi will continue to monitor developments regarding the new competition tool, most notably the upcoming Parliamentary vote, and will provide timely insights and updates on the operations of the new tool.