Enhancing competition in the rail freight industry

Although the Finnish rail freight market has been open to competition since 2007, competition in the market has remained restricted until recent years and the market remains highly concentrated, with one incumbent state-owned operator. A significant proportion of the rolling stock originates from the time the state-owned company had a monopoly and is still controlled by said company. As a result, a large proportion of customers are excluded from tendering for rail freight services. In light of these challenges, the Finnish regulator has shown an increasing inclination towards liberalising the rail freight market.

In its recent research report, the Finnish Competition and Consumer Authority (FCCA) outlined two potential measures to increase competition in rail freight transport. 

Firstly, continuing to allow the use of different standards of rolling stock on the railway network could help smaller players to enter the market. Since amending the Finnish Railway Act in 2022, use of international rolling stock complying with OSJD/GOST standards has been allowed for domestic traffic in Finland. Prior to the amendment, the use of such rolling stock was feasible in cross-border traffic only. The use of a broader range of compliant international rolling stock could lower the entry barriers to the market, but would require a derogation from the European Union. 

As another measure, the FCCA’s report explores the possibility of establishing a public rolling stock company to lease out existing rolling stock to private operators. This could potentially lead to an increased number of service providers and to more competitive pricing in the freight market. According to the FCCA, it is difficult to determine whether the establishment of a rolling stock company would have an overall positive impact on the rail freight market. A more in-depth analysis is required to assess the cost implications, other benefits, as well as the potential harm of such a model and the most suitable type of rolling stock. 

Enhancing competition in the pharmacy and gambling industries

In addition to rail transport, measures to enhance competition have also been under review in other strictly regulated industries, namely pharmacy and gambling. 

For the pharmacy industry, based on the latest government programme, the aim is to establish a cost-effective retail distribution system to enhance conditions for price competition of pharmaceuticals. Regarding the gambling industry, Finnish legislators are planning to establish a new gambling licence model for online casinos and betting, partly replacing the state monopoly. The intention is to liberate operations in the gambling industry as of 1 January 2026, at the latest.

For more information, please contact Petteri Metsä-Tokila or Maria Karpathakis.

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