Sweden Fines Healthcare Companies for Anti-Competitive Google Search Agreements

Key Takeaways

• Anti-Competitive Agreements: Four Swedish online healthcare companies (Kry, Doktor.se, Min Doktor, and Doktor24) entered into agreements to restrict competition on Google Search by agreeing not to advertise on each other’s brand terms.
• Fines Imposed: The Swedish Competition Authority fined Doktor.se SEK 15 million, Min Doktor SEK 6.5 million, and Doktor24 SEK 5 million for violating competition law. Kry, the company that reported the collusion, avoided fines.
• Leniency Program: Kry received immunity from fines for voluntarily notifying the Swedish Competition Authority about the illegal agreements. This highlights the importance of leniency programs in uncovering anti-competitive practices.
• Impact on Consumers: The agreements prevented consumers from seeing alternative digital healthcare options when searching for a competitor’s brand, thus harming consumer choice and market competition.
• Possible Appeal: The companies involved can appeal the ruling to Sweden’s Patent and Market Court, though the decision has already drawn attention to digital advertising’s role in fair competition.

Deep Dive

Four digital health companies in Sweden have been caught up in a web of anti-competitive behavior, one that revolves around the way they advertise on Google Search. While it might sound like an odd battleground for competition, the case highlights just how digital advertising is as crucial as ever in shaping market dynamics. Here’s the catch though, three of these companies will be paying hefty fines, while the fourth gets a free pass. Let’s dive into how this unfolded.

It all started back in 2020 when Kry, Doktor.se, Min Doktor, and Doktor24, each offering digital healthcare services to private individuals in Sweden—agreed to an arrangement that restricted their ability to fully compete on Google Search. Specifically, they decided that when users searched for one of their brands, the other companies would hold back from placing their ads in the search results. Essentially, it was an informal ban on competing for the same set of eyeballs. This meant, for instance, that if someone Googled “Kry,” they wouldn't see competing services like Doktor.se or Min Doktor, essentially cutting off a valuable opportunity to present consumers with alternatives.

Now, you might be asking yourself whether this should even matters to you? Well, in the world of digital services, where so many consumers turn to Google to search for options, the ability to advertise on this platform can make or break a company’s reach. For healthcare providers, appearing in search results isn’t just a nice-to-have, it’s a critical lifeline to attract patients. But by restricting ads on each other’s brand terms, these companies stifled competition and limited consumers’ ability to explore their options.

Marie Östman, Director General of the Swedish Competition Authority, summed it up perfectly, "When companies collaborate in a way that restricts competition, they are in breach of competition law. Such behavior is prohibited and can result in significant fines."

Doktor.se, Min Doktor, and Doktor24 now face a combined SEK 26 million (roughly $2,610,400) in penalties. Doktor.se is set to pay the biggest chunk, SEK 15 million ($1,502,085), while Min Doktor will hand over SEK 6.5 million ($650,904), and Doktor24 is on the hook for SEK 5 million ($501,448). But Kry, the company that came clean and notified the authorities about the illegal arrangement, is walking away without a fine. This is thanks to Sweden’s leniency program, which rewards companies for coming forward and helping investigators untangle illegal anti-competitive practices.

"The leniency program is an important part of our supervisory activities and helps uncover illegal cooperation," Östman explained. Kry’s decision to report the collusion, rather than wait to be caught, meant they would face no penalties. A pretty smart move, if you ask me.

While this ruling is final, it’s still possible for the companies involved to appeal to Sweden’s Patent and Market Court. But whether or not they do, the decision has already cast a spotlight on how delicate the balance is when it comes to competition in digital advertising.

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