A little finger-pointing - Mostly encouragement

From the design of marzipan bars and unfair competition at the cheese counter, to secret cartels and company mergers with assets worth billions at stake ... in competition law, the scope of cases is great, the details are small – and the finger-pointing from the authorities is so heavy-handed that it can scare away good ideas and commercial opportunities. “This is an area requiring a lawyer who asks you to dare, but not too much,” says lawyer Thomas Sando.

“It’s like what I tell the boys I coach in football: if the fear of failing is greater than the desire to do something well and win, then you will never be a good player,” says Thomas Sando, leader of SANDS’ EU, EEA and competition law group.

He talks about waters many find to be full of shoals, through which only a person at home on the sea will be able to navigate safely. As a rule, partners in competition law tend to be more grey-haired than Sando. Nonetheless, the forty-something are considered to be among the foremost in Norway in the field. The professional rankings Legal 500 and Chambers & Partners highlight them as “extremely service-oriented”, “technically brilliant” and “attack-minded” competition law lawyers who handle the very largest cases.

Or smaller problems. Recently they worked a bit on marzipan.

The shape or sausage question. The group recently brought a case on behalf of Hval Sjokoladefabrikk, which complained about the Norwegian sugar and chocolate excise tax to the ESA. Even though many people point to the health-promoting effects of the tax, such regulatory structures often hit unevenly and must be manoeuvred by means of the State aid law.

“Hval Sjokoladefabrikk wanted the entire tax to go away because it hits quite strangely and distorts competition,” explains Thomas Sando.

The sugar excise tax was originally a luxury goods excise tax from 1924 whose impact depends on the product’s placement in the customs tariff.

“Therefore, there is a tax on marzipan shapes, but not on sausage-shaped marzipan bars. Even though the sugar content is exactly the same,” Sando points out.

This illustrates the key element of competition law: How unfair competitive advantages are created. And how they are avoided.

Not just any associate. Competition law has long been organised around the main areas of antitrust enforcement, cartel cases and misuse of dominant market position. A great deal has occurred in the field in recent decades that can make an up-to-date lawyer essential.

When Sando started as an associate lawyer in 2004, all enterprise combinations had to be reported if the total annual turnover of the companies exceeded NOK 20 million and at least two of the merger partners had an annual turnover of over NOK 5 million.

“It had to be reported to the Norwegian Competition Authority if you were going to buy a hotdog kiosk. I could be sitting with 10–15 mergers on my desk at a time. It was good training for an associate, even though most of the cases were unproblematic,” recalls Sando.

Today the turnover thresholds have been increased to NOK 1 billion and NOK 100 million respectively, so now only large mergers must be reported. Sando currently handles half a dozen large cases in the course of a year.

“These are large agreements an associate cannot handle alone,” he explains.

Sando has years of experience with advising in competition law from other law firms. In 2010, SANDS saw the opportunity to start a professionally expert and energetic competition law practice at SANDS. In the recruiting, they have emphasised practical experience, and among others they have brought in Lennart Garnes, formerly employed at the EFTA Surveillance Authority and a specialist in the EEA Agreement’s rules regarding State aid. SANDS provides a high degree of partner attentiveness.

“Such seasoned attentiveness has forced its way into a field of law that has become more complex and involves ever larger cases,” says Sando.

Pay attention in class! SANDS has had a hand in many of the major antitrust cases in Norway in recent years. Major cases at the Norwegian Competition Authority often come from SANDS’ own M&A department. But more and more often, clients also come directly to the competition law group even though other firms handle their corporate assignments.

“It is a feather in our cap,” smiles Sando.

“Participating in the major antitrust cases is important for staying up to date and being able to affect the development of the authorities’ antitrust enforcement, which today employs entirely different analytical methods to just five years ago. In this field, it is important to pay attention in class,” notes the lawyer.

SANDS is out in front and collaborates closely with experts who are specialists in competition economics.

“In that way we can provide the client the very best. And not least, match the Norwegian Competition Authority, where they have an overabundance of economists on their teams in antitrust cases.”

The Norwegian fear of tenders. In an area of the law where even the supervisory authorities do not have a clear opinion of where the boundaries lie, it is even more important for lawyers to have a well-developed radar. An example of these grey zones is the boundary between legal project cooperation and illegal tender cooperation. For example, in 2017 Ski Taxi, Follo Taxi and Ski Follo Taxidrift were found liable for unlawful tender cooperation and fined a total of NOK 1.3 million. 

“The taxi companies were found liable for illegal tender cooperation even though the cooperation was open. In such cases, there are also difficult boundaries to be drawn when it is to be decided whether the cooperation was necessary, or whether the cooperating parties could have submitted tenders individually. The Norwegian Competition Authority has issued guidelines on the starting points for the assessments to be taken, but it would have been beneficial to have provided additional guidance in this field,” states Sando.

“This is important for Norway. When a potentially good and profitable cooperation is prevented because of fear of breaking unclear rules, there is a risk of there being less competition in billion-kroner projects. The result is poor from a socio-economic perspective.”

Reduce the risk. Grey zones and uncertainty will always exist. As competition law lawyers, Sando and his colleagues can explain to clients early in the proceedings what is unproblematic and what is very likely illegal.

“If the risk picture outside the ‘safe harbours’ is to be identified, normally it requires an analysis of what effect the agreement, merger or discount policy has on competition in the market. Often, the client wants a risk assessment of various alternatives,” says Sando.

They may suggest new and safer alternatives under competition law that the client has not thought of.

“It is smart and an efficient use of resources to bring in competition law right at the start of an acquisition case or in an agreement negotiation, instead of finding out on the home straight that it won’t work or will only work if considerable changes are made.”

A finger-pointing discipline. Sando wants most to provide advice that contributes to clients’ value creation, within frameworks that are safe under competition law.

“We want to be neither the ‘hair in the soup’ nor the ‘parking brake’, and we always seek to find good commercial solutions for our clients. But competition law is a somewhat dangerous area. There is a grey zone there, and you mustn’t be too creative either. You have to dare a little, but not too much. I think we are good at looking for opportunities for the client instead of just standing there pointing a finger,” Sando concludes.

“Because this is basically a finger-pointing discipline.”