In a recent landmark decision, the Market Court imposed a €70m fine on Valio, the leading dairy products producer and wholesaler on the Finnish market, for abuse of a dominant market position through predatory pricing in the production and wholesale of fresh milk.
According to the decision, Valio reduced its wholesale price for fresh milk below average variable costs in order to foreclose its main competitor Arla from the Finnish market. Strategic decisions by Valio’s top management to foreclose competition on the Finnish fresh milk market were used as evidence of Valio’s predatory intent. According to the decision, Valio dropped the wholesale prices of fresh milk considerably below costs in 2010 with the aim of raising the prices back to a competitive level once it had achieved a position close to a monopoly. Valio’s conduct also hampered the possibilities of small dairies to operate on the market.
According to the Market Court, Valio’s conduct constituted a serious antitrust violation with the aim of harming consumers. In determining the size of the record high fines, the Market Court also took into account that Valio has once before been found guilty of abuse of its dominant market position.