Estonia 2024: Main developments in Competition Law and Policy

In the past, it could be argued that Estonia’s competition enforcement landscape was dominated by merger control, with high-profile case setting precedents. In 2024, the picture was different. Merger control was not as exciting or controversial as it had been in previous years. The year will be remembered more for the heated debates that surrounded legislative proposals, market analyses, and the finalization of long-running supervisory cases.

The most defining development throughout 2024 was undoubtedly the ongoing debate surrounding the implementation of the ECN+ Directive (please see a more detailed overview of the topic here). At the same time, the Estonian Competition Authority (ECA) adopted several noteworthy decisions, most notably the Pindi Kinnisvara non-poach case, the kv.ee and auto24.ee excessive pricing cases and investigations into Lindstrom’s practices for terminating agreement in the textiles rental services. Last but not least, 2024 will go down as the year of market studies. Legislative changes–

Ongoing Transposition of ECN+ Directive: A Regulatory Groundhog Day

–As everyone knows, the ECN+ Directive was supposed to be implemented into national laws in early 2021. The reality, however, has been much more complex. Only five Member States met the deadline, highlighting how difficult it is to align national frameworks with ambitious directive objectives. Estonia, despite the difficulties faced by many other EU members, is the only one to have completed the transposition.

For Estonia, a flat country, the metaphorical summit of ECN+ Directive implementation remains stubbornly out-of-reach. The finalization of national provisions required by the ECN+ Directive has not yet been achieved despite repeated discussions, drafts and political debates. The question now is: will 2025 finally mark the end of this prolonged legislative journey, or will we start 2026 in the same way as several past years with no end in sight for this topic?

For readers seeking a more detailed analysis of this ongoing debate, a comprehensive blog post on the subject is available here

. For those who are short on time or have little interest in the debate, the crux revolves around the fundamental question: what should be the legal frame work for future competition enforcement? The question is whether competition law infringements are handled through misdemeanour procedures (with modifications to meet the ECN+ Directive requirements) or a specially-built administrative fining system.

While the intricacies of competition enforcement are often a subject reserved for legal professionals and scholars–particularly the readership of the Kluwer Competition Law Blog–2024 marked a year where competition law enforcement became a widely debated topic in mainstream media, moving beyond specialist circles. The debate attracted not only legal experts, but also politicians and policymakers, journalists and the general public. One can only hope this renewed interest in competition enforcement continues in 2025. Direct Application of EU Block Exemptions to Purely National Cases

Less limelight was garnered by an

amendment

at the end of 2024 to the Estonian Competition Act enabling the direct application of EU block exemption regulations (BERs) also to purely national cases. Prior to now, Estonia’s block exemptions and EU BERs coexisted. The latter was designed to closely mirror the content of the EU counterparts. This dual approach was intended to ensure consistency by ensuring that agreements that benefitted from an EU exemption also benefited from the safe harbor treatment under Estonian laws. In practice, this system was less effective. The variations in wording could lead to different legal outcomes and uncertainty for both businesses and enforcement authorities. Second, it’s not always clear whether Article 101 TFEU (triggering EU Competition Law) applies or if only national competition laws are relevant. This increases the uncertainty caused by inconsistent regulations. EU BERs have fixed expiration dates. The national exemptions have not always been drafted and enacted on time, resulting in temporary regulatory gaps.

–Under a newly amended law, the Estonian government has the authority now to designate which EU BERs are directly applicable under national law. This change should lead to a reduction in administrative burdens and an increase in legal certainty. Other debates–Under current legislation, other discussions are unlikely to take place (e.g. Other discussions (e.g. It is difficult to imagine such discussions gaining traction until the ECN+ Directive has been fully implemented and its impact assessed. Abuse of dominance

–Given Estonia’s institutional set-up, the ECA has generally focused more on abuses of dominance. 2024 was not an exception. There were several notable cases. Below are only a few short comments about a few selected cases.

Kv.ee

and auto24.ee

– Excessive Pricing Investigations in Digital Sector

The year saw the closure of prolonged investigations into activities of AllePal, operator of several online classifieds portals. The cases date back to 2019 when the ECA began a supervisory proceeding into the pricing practices at kv.ee.ee and City24.ee. Both are part of the same Group and major players in the real-estate classifieds market. In 2022, the investigations were expanded with the opening

vis-à-vis pricing for auto24.ee – Estonia’s largest automotive classifieds portal. The investigations focused on whether the business-to-business (B2B) pricing–specifically, fees charged to real estate agents and car dealerships respectively–constituted excessive pricing. The ECA closed the investigations on April 18, 2024. They used a consistent analytical approach across the real estate classifieds and automotive classifieds market. This conclusion was based on narrow market definitions. The ECA argued that definitions based solely on specialized online classifieds platforms were not adequate. Facebook and its Marketplace were excluded from relevant markets.

The exclusion of Facebook Marketplace from relevant markets raises naturally questions on if said market definitions remain relevant in the future, particularly in the light of the EU Commission’s decision on Facebook Marketplace

.

Arguably more interesting parts of both cases were the analysis of excessive pricing itself. The authority applied a widely accepted UnitedBrands framework in a new economy context. This tried-and-tested approach requires an assessment of whether a product’s price is excessive, based on its production costs. It also considers whether the price has a reasonable relationship to the economic value of the product. In these cases, ECA focused on quantifying value created by platforms. The analysis took into account key factors, such as visitor traffic and platforms’ role in creating transaction opportunities. United Brands framework may be easy to understand in theory, but its application can raise complex questions. It was necessary to analyze user engagement, commissions rates, and benchmark key metrics against similar Baltic or European platforms. The lack of relevant data made this task even more difficult. Ultimately, the findings suggested that while the platforms held a dominant position, the fees charged were proportional to the value provided, particularly in terms of market visibility, customer reach, and conversion potential.

Lindstrom – Abuse of Dominance via Restrictive Conditions on Contract Termination

In 2024 the ECA also concluded investigations into the activities Lindstrom, a key player in workwear and floormats rental services. The review focused on whether Lindstrom’s terms of contract foreclosed the competition by imposing unfair obligations regarding termination of agreements. The authority expressed concern and argued that a 12-month notification period prior to terminating an agreement was excessive, and could have market-closing effects. As it is so often the case, key questions revolved around market definition. The ECA defined relevant markets as the rental market for workwear and the rental market for floor-mats. In both cases, direct purchases of textiles or self-maintenance was excluded as they were not considered to exert enough competitive pressure. In a high inflation environment, the application of the Small But Significant and Non-Transitory Increase in Price test (SSNIP), was an interesting aspect of the analysis of market definition. During the period under investigation, Estonia experienced double-digit inflation. This raised doubts as to whether a price increase of 5-10% (the standard SSNIP level) accurately reflected the market dynamics. The decision’s text largely ignores the question. The case was settled, which is likely why the text of the decision largely ignores the question. The authority found that Lindstrom had a dominant position on these markets because its market share exceeded the 40% threshold that is typically used in national law to presume dominance. The ECA viewed the long notice period as a barrier for contract termination and reduced customer mobility. The decision was notable for not assessing foreclosure effects in depth, but instead taking a formalistic approach, suggesting that longer termination periods may be viewed as abusive. This may have been due to the fact that the case was settled, and a more detailed economic assessment was not necessary. The company also introduced specific carve outs that allowed for exceptions to termination requirements, especially in cases where customers-specific solutions were developed. These commitments led the ECA to conclude the case without further enforcement action.

Anti-competitive agreements

One of the most notable anticompetitive agreements cases in 2024 involved employee no-poach agreements, reflecting growing European competition law interest in labour market restrictions. Recent EU and regional developments–including the European Commission

‘s Policy Brief, the Joint Nordic Competition Authorities report

, and the Lithuanian Competition Authority’s guidance paper

–have all underscored the focus on competitive risks around labour relations. In cases where agreements between companies restrict worker mobility and distort the labour market, they are of particular concern. The ECA examined non-compete/non-poach provisions in Pindi Kinnisvara contracts with agents who operated through their own legal entities to avoid taxation. The clauses prohibited former (legal entities) agents and their employees from engaging any competing activities six months after contract termination.

–An important feature of this case is the Estonian context. Most real estate agents don’t have direct employment contracts, but instead sign service agreement through their legal entities. Pindi Kinnisvara inserted clauses to protect its business interests. These clauses ensured that employees of these legal entities would not work with competitors. In cases where Pindi Kinnisvara had direct agreements with agents (natural persons), services agreements would have directly bound the natural person. Now, agreements are being concluded with legal entities that also bind natural persons. Naturally, this raised the question of whether any restrictions were agreed on.

The ECA deemed that Pindi Kinnisvara’s agreements were non-compete obligations, thereby qualifying them as object restrictions. The decision’s wording suggests a broad prohibition implying that these clauses could always be illegal (or allowed in a very limited sub-set). One could argue that classifying such agreements as by-object restrictions is in conflict with recent ECJ cases, which have narrowed by-object classification. Contrary to the Estonian decision, general EU jurisprudence suggests that restrictions should be assessed within their context and not assumed to be unlawful per sé

It could be argued that labour-related restrictions on competition are still uncharted territory for EU court, as there have not been major cases litigated at this level. This omission was likely due to a settlement that resolved the case, eliminating the need for an in-depth analysis. Such omissions have raised concerns about the legality in Estonia of non-compete agreements and no-poach contracts involving employees. It is unclear if the ECA intended to ban all non-compete and no-poach agreements or if certain restrictions can still be justified. Future enforcement practices will likely follow EU developments. The referred case is not to be read in isolation from the ongoing EU debate. –

–Merger control in 2024 – High volume, Low Excitement

–In the year 2024, the ECA had received 44 merger notifications, and 39 decisions were issued. Five cases were still being reviewed at the beginning of 2025. Seven cases from 2023 have also been finalized in 2024. One case was cleared quickly, indicating that the Phase II investigation was for procedural reasons. The other remains ongoing, making it too early to analyse its implications. While 2024 was uneventful, 2025 could be more dynamic. Due to geopolitical factors, the Baltic region is not attractive to foreign capital. This creates opportunities for strategic buyers which leads to more complex cases of merger control. The rise of market studies – the most unexpected development of 2024

–In 2024 the ECA conducted a surprising number of market analyses, analysing

motorfuel retailing

; orthodontics services

; effects on pharmacy reform

; and organized garbage collection. Each study identified market deficiencies and made recommendations. Only the waste management study led to visible regulatory changes, while the others have not resulted in visible enforcement actions or policy changes. This raises an important question: Will these findings lead to meaningful change or will they remain purely theoretical exercises with no real impact? This question about practical impact is more relevant because it is clear that market studies will be conducted in 2025. A detailed review of e-chargers has already been completed, and a study of the telecommunications industry was announced. Fuel retail market analysis: Still looking for the Gas Station Cartel? –Have gas stations concluded a cartel? This is a question every competition law practitioner must have been asked during compliance trainings. This question has been asked in Estonian public discussion for many years. One can only speculate whether this was also the reasoning behind the market study. The study was focused on the competition between national fuel wholesale and retail markets. The study found that Estonia has a small but highly concentrated fuel market, with one the densest networks of gas stations in Europe. The study also found that the price increases were largely due to external factors such as international fuel prices, acquisition duties, and the energy crisis in 2022 following Russia’s invasion. A key issue identified was informational asymmetry. This is the difference between market participants and consumers. Fuel companies monitor and react to the prices of competitors, but consumers do not have real-time data on fuel prices as Estonia has no centralized fuel data system. To combat this, the ECA proposed a national platform for real-time fuel pricing, which would increase transparency, encourage competition, and allow quicker intervention in cases of irregularities. It remains to be determined whether this will lead to meaningful changes. It is not clear if a centralized data platform would have a material impact on the transparency of the marketplace. Although no cartel was found (easing future compliance training), this study made mention of the possibility that collective dominance could exist in the sector. This is especially noteworthy, as collective dominance was recently given renewed attention at the EU-level. Although this approach has been discussed in theory, its actual implementation remains a question. The European Commission has not brought a case of collective dominance in decades and Estonia has never had a precedent in this field. The ECA has historically focused on organized waste collection. Therefore, the market research on this sector was not surprising. The findings paint a concerning picture of declining competition.

The study highlighted a falling number of bidders in public tenders, reducing local governments’ options, increasing the risk of higher prices and lower service quality, and creating entry barriers–particularly during the procurement phase. The study highlighted a number of key concerns, including below-cost bidding because of pricing pressure. This can lead to financial instability and discourage new entrants. Strategic underbidding was also observed, where companies submit unrealistically lower bids, only to increase prices later, strengthening the dominant players’ market control. In conclusion, exclusive service contracts lead to ever-higher concentration levels and uncompetitive market. Many municipalities responded positively. A large number of them reported changes in their procurement policies that have been implemented or will be in the near future. The study may have influenced national policies as well, and could have been one of the factors that led the Ministry of Climate into incorporating pro-competition measures in a broader reform of the waste sector. This case is a good illustration of how market studies can influence practice at various levels. Orthodontic services Market Analysis–Following an open debate between the trade association for dentists and orthodontics, the ECA conducted a survey about orthodontic services. The report addressed different structural issues such as supply shortages and long wait times for orthodontic services. The study argued that, despite a doubled demand for orthodontic services from 2011 to 2018, orthodontist numbers have remained static. This has led to waiting periods of 9-24 months and many clinics refusing to accept new patients.

–A major constraint identified was the limited number of orthodontic residency places in the university, which in turn limits supply of new specialists. The ECA recommended reforming the model of service provision and expanding training programs, among other things. The ECA has no direct influence on the funding of universities or healthcare workforce policies. It is therefore unclear whether the study will lead to any practical reforms. The findings indicate that structural problems exist in the Estonian health care system. This will likely change in 2025. The focus on market research was another key element, and it is unclear how these studies will affect actual enforcement or policy. Although individual competition cases from 2024 were notable, their relevance in a broader sense remains to be determined. Many enforcement actions were settled or focused on certain sectors, limiting the precedential value.

2025 could be more dynamic as ongoing legislative debates are nearing completion, and this could trigger a wider range new cases in which the ECA would try to use its new powers. Stay tuned!

——Declaration of conflict of interests:

The authors have acted for parties involved in several of the cases referenced above and have also contributed input to legislative changes discussed in this article.

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