Swedish snuff manufacturer released from liability and exempted from SEK 38 million fine

The Swedish Patent and Market Appeals Court's decision of 29 June 2018 – PMT 1988-17

By senior intern Sebastian Willigenburg Andersen and assistant attorney Kristine Langgaard Stage

The Patent and Market Court's decision in 2017

In 2017, the Swedish snuff manufacturer Swedish Match was ordered by the Swedish Patent and Market Court to pay a fine of SEK 38 million. The tobacco giant had imposed special requirements to the competitors' shelf edge labels in the snuff refrigerators made available to the distributors by Swedish Match, so the various manufacturers were unable to distinguish themselves from each other and from Swedish Match. Since Swedish Match's snuff refrigerators were used by approx. 75% of the distributors in the market, the Swedish Patent and Market Court held that the company had been abusing its dominant position.

The Appeals Court's decision

The judgment was subsequently appealed to the Patent and Market Appeals Court. The Appeals Court held - like the Patent and Market Court - that Swedish Match had a dominant position in the market, and that the requirements to the competitors' shelf edge labels restricted competition.

Nevertheless, however, the Appeals Court held that the label system must be considered fair, because it was a proportional measure against commercial notices that reached out to consumers and prompted the use of tobacco. In addition, in the opinion of the Appeals Court, the Swedish competition authorities had not proved that the manner in which Swedish Match had been implementing the label system constituted abuse of the company's dominant position.

Consequently, the Appeals Court released Swedish Match from liability. Swedish Match is therefore not required to pay the SEK 38 million fine imposed by the Patent and Market Court. The decision cannot be appealed any further.