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15.10.2025 02:35
News

Court ruling on Sarastia clarifies in-house company rules, say industry associations

The Supreme Administrative Court found that Sarastia did not meet the criteria of an in-house company.

The Supreme Administrative Court (SAC) recently issued a ruling on the in-house status of Sarastia Oy. The SAC found that Sarastia did not conform to the Procurement Act’s definition of an in-house company.

The ruling is in line with the earlier decisions of the Market Court and the Finnish Competition and Consumer Authority (FCCA): a procurement by the Vantaa and Kerava well-being service county should have been put out to tender.

The case began with a request for action from industry associations to the FCCA. That saw the FCCA argue before the Market Court that the diffuse and diversified controlling interest structures of in-house companies did not fulfil the Procurement Act’s requirements.

The Confederation of Finnish Industries (EK), Suomen Yrittäjät (the Finnish SME association), the Finland Chamber of Commerce and Perheyritysten liitto (the Finnish family firms’ association) consider the ruling a significant and logical step towards fair competition on the public market.

“The SAC ruling is an important one: the controlling interest is non-negotiable, no matter how many owners the company has. This decision restores our faith in fair markets and enterprise,” says Harri Jaskari, Business Policy Director at Suomen Yrittäjät.

“This isn’t just a one-off case – it’s a structural problem. The decision makes critical examination of in-house structures imperative and brings much-needed clarity to the field as a whole,” says Sanna-Maria Bertell, a leading expert at EK.

In their joint statement, the associations stress that the municipalities and well-being service counties must now evaluate their in-house structures and put procurements out to tender as required by law.

The associations emphasize that, in addition to the ten per cent minimum holding contained in the amendments to the Procurement Act currently making their way through Parliament, the controlling interest criterion must also always be fulfilled to ensure the in-house company status is legal. In the associations’ view, the SAC ruling shows that if there is no actual controlling interest, purchases by the owner are equivalent to external sales. In that case, the company also ceases to be an in-house company with respect to its other owners if the external sales limit is exceeded.

“The SAC ruled very clearly that the administrative structures of Sarastia did not meet the Procurement Act’s controlling-interest requirements. This decision sends a very strong signal to other publicly owned companies and municipalities,” says Johanna Sipola, a Director at Finland Chamber of Commerce. “The decision is significant for healthy markets and competition. Competition makes providing services efficient and cost-effective, benefiting society as a whole,” says Minna Vanhala-Harmanen, CEO of Perheyritysten liitto.

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