Cases Foreca Ltd vs. the Finnish Meteorological Institute FMI and

Foreca Sverige AB vs. the Swedish Meteorological and Hydrological Institute SMHI

Foreca Ltd (before December 2000 Weather Service Finland Ltd) was established in December 1996, being the first private weather service company in the Nordic countries providing full-scale weather services for media, transport, industry and general public.  A subsidiary Foreca Sverige AB was established in Sweden in March 2001.  Throughout its existence Foreca has suffered from continuous and severe competition problems with national meteorological services in Finland and Sweden. Violations have been observed in:

• Several cases of cross-subsidisation and predatory pricing, concerning e.g. media and internet-customers. Last year Foreca lost a big two-year contract of national road weather services to the Road Authority in a public tender, where FMI reduced its former price by 85%.
• A recent case from Sweden where Foreca Sverige AB won the contract for summer-time marine service for National Marine Authority. SMHI immediately added the Internet service for free on their own Website
• Degradation of radar data in 1999. FMI added erroneous radar echoes to a Nordic radar composite to harm Foreca’s and SMHI’s business in Finland, simultaneously offering undisturbed pictures to its own customers. A decision by the Competition Council on January 18th, 2002 states that by doing this FMI abused its dominant position in national weather data market and must pay a penalty of 20 000 Euro to the state.
• 
  Continuously raising ECOMET data prices, especially by adding new redistribution licenses for radar data. See letters attached.
• Due to non-transparency of accounts it has been impossible to investigate whether FMI charges their data using ECOMET rules.  SMHI has informed that their total data costs are only 8% of their turnover. A separate study by Saarikivi (Ecomet principles, past and present) shows that a private company must pay at least 20% of their turnover for data, even though the data set is just a fraction of the total set that the public sector uses. Applying honestly all current ECOMET rules a National Meteorological Service (NMS) should pay at least 60-70% of their turnover. This shows how unrealistic the present data prices and rules are, and lead inevitably to unfair practices.
• NMSs have plenty of other data outside the ECOMET catalogue, which they use commercially (in Finland e.g. air-quality and UV-measurements). Many countries do not even have climatological data on their list, and for those who have it, the price is enormous.
• The freely distributed data set (essential data) has diminished considerably in Finland. This includes also many marine stations that are crucially important for marine safety.

These cases have resulted in several complaints to the Finnish Competition Authority, who has made extensive studies on these cases.  Their report on competitive environment and FMI’s market position and operations in the Finnish weather data and service market was published on 13th March, 2001 (in Finnish only).  The conclusion was that the commercial activities of FMI must be separated to a company, to ensure transparency and fair competitive environment. Ministry of Transport and Communications made a decision to do so in June 2001.  The separation should have happened in 1st July this year, but has now been delayed for some months.

 

Investigations on predatory pricing and prices of data are still on going.  The case for radar redistribution licenses is included in the investigation. Foreca requests DG-IV urgently investigate the validity of these and the other new ECOMET rules from the EU market perspective. Foreca claims that these rules are illegal and by applying these rules ECOMET members abuse their dominant position in the European weather data market.

For more information on the Finnish investigation, please contact 

Assistant Director Martti Virtanen
Office of Free Competition
P.O.B. 332, FIN-00531 Helsinki

Tel: +358 9 73143338
Fax: +358 9 73143328
e-mail: This e-mail address is being protected from spambots. You need JavaScript enabled to view it

 

Helsinki June 20th, 2002

Pirkko Saarikivi
Executive Vice President
Foreca Ltd