The Finnish Competition and Consumer Authority proposes prohibition of a three-to-two merger in the healthcare sector
On 29 September 2020, the Finnish Competition and Consumer Authority ("FCCA") proposed the Market Court to prohibit the merger between Mehiläinen Yhtiöt Oy and Pihlajalinna Oyj. Both companies operate in the healthcare market and provide services to individuals, companies, insurance companies and customers in the public sector. According to the FCCA’s investigation, the merger would lead to competition concerns in the following healthcare segments:
- Private medical services in a total of 16 local markets including all the major cities in Finland,
- Occupational health services in 21 local markets including all the major cities in Finland, as well as in customers operating in several regions thus requiring an extensive network,
- Private hospital services in four hospital districts (of Finland's 20 hospital districts),
- Services provided to insurance companies when the insurance company pays the treatment on behalf of its customer,
- Infertility treatment services in the Helsinki metropolitan area and
- Public sector outsourcing and purchasing services in a variety of segments.
According to the FCCA, the Finnish healthcare market would become even more concentrated if the merger was approved. The three players currently dominating the national healthcare market, Mehiläinen, Pihlajalinna and Terveystalo, have during the last decade acquired smaller companies within the market and have gained important market shares. The assessment of the FCCA suggests that the approval of the merger would cause considerable price increases in all the segments the companies operate. The FCCA considered remedies not to be sufficient as the envisaged competition concerns, including higher prices and a poorer variety for customers, were too severe to address.
The Market Court shall issue its decision on 29 December at the latest, and it can prohibit the merger, approve it, or impose remedies. The decision of the Market Court can be appealed to the Supreme Administrative Court.
A public version of the proposal is not yet available; please find an English version of the FCCA's press release here.
For more information please contact Päivi Tammilehto.
