3. Competition law

Agreements or arrangements between competitors that aim at or result in preventing, restricting, or distorting competition are prohibited under competition law (see section 3.2).

Stora Enso must (i) act independently when selling to customers and when purchasing from suppliers, (ii) not try to influence the future market conduct of its competitors (or other market participants), and (iii) take great care when meeting/interacting with other market participants (especially competitors).

Stora Enso must never exchange, whether directly or indirectly, Competitively Sensitive Information (as defined in section 3.2) with its competitor. When collecting, processing, utilizing, and communicating about market intelligence, Stora Enso must act in accordance with competition laws and take extra precautionary actions (see sections 3.4, 3.,5 and 3.6)

Appropriate safeguards must be in place when interacting with competitors especially in relation to (i) trade associations (see section 3.7), (ii) mill visits and industry benchmarking (see section 3.8), and (iii) potential cooperation with competitors, such as joint purchasing as well as research and development (see section 3.9). Certain contacts with competitors shall also be reported (see section 3.2).

A dominant position implies a position of economic strength that enables a company to prevent effective competition in the market and to substantially behave independently of the market. Certain behaviors by a dominant company may amount to prohibited abuse, such as unfair pricing, discrimination against certain customers, and certain rebate schemes (see section 3.11).

Structural business changes such as mergers, acquisitions, divestments, and the establishment of joint ventures also entail aspects relating to competition law (see section 3.12).

Agreements or arrangements between competitors

Under no circumstances should Stora Enso enter into any agreement or arrangement, whether written or oral, express or implied, formal or informal, that could be seen as having the potential to prevent, restrict or distort competition.

Anti-competitive agreements or arrangements can have many forms, such as:

• A single, one-off contact between competitors, regardless of the medium (including meetings, telephone calls, emails, and instant messages);
• Exchanging information with competitors (whether directly, indirectly or unilaterally);
• Informal contacts and discussions (e.g., over dinner or drinks); or
• “A nod and a wink” or verbal understanding.

The following forms of agreements or arrangements are likely to constitute serious infringements of competition law:

• Agreements on what prices to charge or terms to impose (e.g. agreements to charge the same or similar price, apply the same or similar discounts or rebates, adhere to a pricing formula, increase or decrease prices by the same or similar percentage, etc.);
• Agreements allocating markets or customers (e.g. agreements not to compete with one another in a given geographic area or for a certain customer or category of customers, such as for one company to focus on direct sales and the other to focus on sales through distributors);
• Agreements on whether or not to deal with a certain supplier, customer, or category of supplier/customer (e.g. agreements to collectively boycott certain suppliers that are charging excessive prices);
• Agreements to coordinate bids in a sale or purchasing process (e.g. in order to obtain the best prices). Read section 3.9 about how to conduct a legitimate joint purchasing; and
• Agreements to limit or control production, technical development, or investments.

The prohibition applies to formal agreements as well as to more “loose” arrangements, so-called concerted practices. Concerted practice refers to a situation where no formal agreement has been entered into, but where a company, by direct contacts (e.g. phone calls) or indirect contacts (e.g. through a third party such as a customer, distributor, or supplier) regarding business objectives, influences the market conduct of its competitor in a way that it is assumed will affect competition. Typically, information exchange between competitors could constitute a concerted practice if it reduced strategic uncertainty in the market.

The prohibition does not only cover agreements or arrangements that actually have restrictive effects on competition, but also agreements or arrangements that have their aim to restrict competition. Typically exchanging individualized information about future prices or volumes is considered to have its aim to restrict competition.

Exchanging information with competitors

Stora Enso employees must never (i) participate in any discussions with competitors involving Competitively Sensitive Information, (ii) provide Competitively Sensitive Information to a competitor, or (iii) request or receive Competitively Sensitive Information from a competitor, unless otherwise expressly permitted under This Policy or by Legal.

“Competitively Sensitive Information” means

• Any confidential or proprietary information relating to Stora Enso or one or more of its competitors on any market concerning its recent, current, or future competitive actions, strategies and/or plans, including in relation to (please note that the following are examples):
  - Pricing (including actual prices, price lists, indicative prices, forecasts, etc.);
  - Discounts/rebates or discount/rebate policies;
  - Bidding practices or strategies;
  - Customers (including the identity of actual or potential customers and categories of customers);
  - Market territories (where a company sells or does sell or intends to sell its products);
  - Terms or conditions of sales or sourcing;
  - Policies or strategies regarding negotiations with customers or suppliers;
  - Revenues, profits, or margins;
  - Market shares;
  - Sales, marketing, advertising, or promotion strategies or costs;
  - Volumes produced or sold, or inventories;
  - Data or views on the market, supply/demand, price trends, etc. (including but not limited to whether prices on the market(s) are too low, at what level prices should be, or how to achieve higher or more stable prices);
  - Suppliers (including the identity of actual or potential suppliers and categories of suppliers);
  - Expansion/contraction plans;
  - R&D projects, strategies or costs; and
  - Production capacities, outputs, or costs.

• Any confidential or proprietary information relating to Stora Enso that could be used by a competitor in making decisions on the matters indicated above, or to anticipate the strategy of Stora Enso with respect to the matters indicated above;
• Any confidential or proprietary information relating to a competitor that could be used by Stora Enso in making decisions on the matters indicated above, or to anticipate the strategy of such competitor with respect to the matters indicated above;
• Any other confidential or proprietary information relating to Stora Enso that might be used by a competitor in a way that could potentially prevent, restrict, distort or reduce competition; or
• Any other confidential or proprietary information relating to a competitor that might be used by Stora Enso in a way that could potentially prevent, restrict, distort or reduce competition.

Exchange of Competitively Sensitive Information between competitors, regardless of the context in which it was exchanged, the number of times it was exchanged, or whether such information was provided unilaterally, can potentially amount to an infringement of competition law.

Please refer to section 3.5 of This Policy for further information about collecting and sharing market intelligence (including guidance on how to act if you receive unsolicited Competitively Sensitive Information about Stora Enso’s competitors from customers, suppliers, or other third parties).

If you have a concern, issue, or question regarding the potential exchange of Competitively Sensitive Information (however small/insignificant it may seem), always consult Legal.

Reporting contacts with competitors

Stora Enso employees must take great care when meeting with competitors in order to comply with the applicable competition rules. Discussions between Stora Enso employees and employees of competitors in relation to Competitively Sensitive Information are strictly prohibited.

Although Stora Enso may make forecasts, it should not for this purpose obtain commercially sensitive information from its competitors concerning their future plans. Stora Enso must act independently on the market and must not seek to either (i) influence the future market conduct of its competitors; or (ii) find out the future market conduct of such competitors. These requirements apply both in the sales markets and the purchasing markets.

It is especially important that Stora Enso employees do not try to make any agreements or arrangements (regardless of their form) with competitors or communicate with competitors in relation to Competitively Sensitive Information (see section 3.2 - Agreements or arrangements between competitors above).

Buying from or selling to competitors presents particular antitrust risks related to information sharing and market signalling. In order to prevent Competitively Sensitive Information from flowing between competitors, as well as to avoid the appearance of inappropriate information flow, special precautions must be taken whenever Stora Enso buys from suppliers or sells to buyers that compete with Stora Enso.

Selling products to, or purchasing products from, Stora Enso‘s competitors should only take place for legitimate business reasons. In the context of negotiating sales to or purchases from competitors, it may be necessary to exchange some Competitively Sensitive Information. However, no information should be exchanged beyond what is strictly necessary for the purposes of reaching a selling/purchasing agreement. In addition, when negotiating sales or purchases with a competitor, the following principles shall apply:

• No information received from a competitor must be exchanged, directly or indirectly, with another competitor;
• No information must be exchanged with a competitor about transactions involving other customers or suppliers of Stora Enso, or about other customers or suppliers of such competitor (including prices, volumes, and terms of the other transactions);
• No information must be exchanged with a competitor about the costs of either company. If costs need to be part of a price formula, they should be obtained only from a third-party source (e.g., an independent transport company in the case of transport costs);
• It is preferable to use public reference prices to set the price in order to avoid disclosure of each company’s individual price strategies; and
• If you consider swaps of products with a competitor, you should always consult Legal in advance. In the case of swaps of products, a unit-for-unit exchange is one potential strategy for avoiding the need for sensitive price negotiations between competitors

Internal handling of information

Stora Enso employees involved in selling products to Stora Enso‘s competitors will have access to Competitively Sensitive Information relating to the relevant selling business (e.g. prices, volumes, and other terms agreed with Stora Enso’s competitors). Similarly, Stora Enso employees involved in purchasing products from Stora Enso’s competitors will have access to Competitively Sensitive Information regarding Stora Enso’s competitors.

Therefore, Stora Enso employees involved in selling products to Stora Enso’s competitors should not communicate

• Any Competitively Sensitive Information relating to Stora Enso’s competitors (e.g. price, volume, or other terms agreed when selling to such competitors) to Stora Enso employees involved in (i) purchasing the same products from Stora Enso’s competitors, or (ii) selling downstream products incorporating the same products; or
• any other Competitively Sensitive Information relating to the relevant Stora Enso selling business (e.g. Stora Enso’s prices or pricing strategies) to Stora Enso employees involved in (i) purchasing the same products, or (ii) selling downstream products incorporating the same products.

Likewise, Stora Enso employees involved in purchasing products from Stora Enso’s competitors should not communicate

• any Competitively Sensitive Information available as a result of purchases from Stora Enso’s competitors (e.g. price, volume, or other terms agreed with a competitor) to Stora Enso employees involved in selling the same products; or
• any other Competitively Sensitive Information relating to Stora Enso’s competitors (e.g. bids or bidding strategies) to Stora Enso employees involved in selling the same products.

In some cases (e.g. with respect to internal sales/purchases within Stora Enso) it may be necessary for there to be some degree of internal Stora Enso communication regarding pricing or volume information for products sold to or purchased from competitors (e.g. between the respective Stora Enso purchasing and selling functions for the same product), such as when determining internal transfer prices that comply with tax laws.

• In these situations, always consult Legal in advance and receive Legal’s prior approval before sharing any information. Legal’s approval is likely to be subject to certain strict and specific safeguards/conditions (e.g. who can receive information, what kind of information can be shared etc.) to prevent inappropriate information flow (i.e. so-called “Chinese Walls”).

For further guidance regarding sharing market intelligence information outside the company, please see section 3.5 - Sharing market intelligence).

If possible, the respective Stora Enso purchasing and selling functions for the same products should be entirely separated and handled by different employees who do not have any direct contact with one another. If the same Stora Enso employee must handle both purchasing and selling activities, it is very important to (i) avoid price or volume discussions involving the disclosure of costs of either party or (ii) the pricing policy applicable to transactions with other external parties or other Stora Enso units. In this situation, only publicly available reference prices and third-party cost information should be used. In these types of situations, always request advice from Legal before acting.

Given the complexity of these issues, if you have a concern, issue, or question regarding the internal handling of information regarding Stora Enso’s competitors (however small/insignificant it may seem), always consult Legal without delay.

Public announcements

Public communications required by stock exchange and other regulations

Stora Enso must comply with certain regulatory and stock exchange requirements with respect to public statements. Public communications, in the form of e.g. financial reports and stock exchange releases, should only be given when required by applicable regulatory (including civil labour law) and stock exchange requirements.

Public communications giving an overall description or assessment of general future market trends that are necessary to make a fair market valuation of the company are normally required by regulatory and stock exchange rules and are generally acceptable.

Public communications and Stora Enso spokespersons

Stora Enso spokespersons must discuss matters relating to Stora Enso only. Stora Enso spokespersons must never comment on the actions or business of Stora Enso‘s competitors.

Stora Enso spokespersons

• should not speak for the industry in general when discussing market-related topics;
• should not suggest what would or would not be desirable from a general industry point of view; and
• should not discuss about the need for higher prices or lower output in the industry (e.g. in the context of a trade association).

Public communications and market signalling

Market signalling between competitors normally refers to a situation where competitors publicly communicate their future pricing intentions or other Competitively Sensitive Information by making public announcements through e.g. a company’s website or social media account. Stora Enso must be aware that public statements regarding markets or Stora Enso’s products (especially in relation to future intentions regarding pricing and other terms) could be perceived as market signalling between competitors, and thus, could raise serious competition law issues

Therefore, public communications or announcements in relation to Competitively Sensitive Information, such as (please note that these are examples) future prices, other trade terms, and capacity utilization, are prohibited unless approved by Stora Enso’s CEO and Legal. In case you have doubts that a planned public communication/announcement may potentially relate to Competitively Sensitive Information, always contact Legal before proceeding with such communication/announcement.

Market intelligence firms

Market intelligence firms are normally companies that analyse market trends and regularly publish reports and studies based on information collected from the markets.

Providing information to a third party, such as a market intelligence firm, involves a potentially significant competition law risk (especially if such information relates to Competitively Sensitive Information regarding Stora Enso or its competitors). The reason is that Stora Enso does not know what the third party (e.g. a market intelligence firm) will do with the information. If such information is forwarded on to Stora Enso’s competitors by that third party, Stora Enso may be found to have infringed competition law by sharing the information.

Collecting market intelligence

Market intelligence is typically information relating to markets, products, market players, and other business parameters. Market intelligence can be collected from various sources. Stora Enso employees should adhere to the following guidelines when collecting market intelligence.

From public sources

• Public information (i.e. available to everyone, not behind a paywall) can be used to collect market intelligence. Public information typically includes e.g. financial reports, websites, press releases, media and trade information, suppliers’ manuals, etc.
• However, Stora Enso employees must always make clear, precise, and accurate references to the source of the market intelligence material (i.e., type of source or name of the individual, name of the company to whom the material relates, date and time of interaction with source, specific circumstances, etc.); and
• Please note that Stora Enso should always make its commercial decisions (e.g. with respect to pricing) based on its independent commercial judgment.

From competitors

• A competitor is not a legitimate source of market intelligence;
• Never use a competitor as a source of market intelligence, in particular:
  - Never exchange with, share with, request, or receive from Stora Enso’s competitors any Competitively Sensitive Information; and
  - If Stora Enso is selling products to or purchasing products from competitors, Competitively Sensitive Information should only be exchanged to the extent that it is absolutely necessary for the purposes of reaching a selling/purchasing agreement. If you have any doubts regarding this, always consult Legal.

From customers

• Do not ask a customer for Competitively Sensitive Information (e.g. detailed information about a competitor’s pricing, offer or bid); and
• However, in the context of genuine commercial negotiations, it is generally permissible to discuss with customers how Stora Enso’s offer may be improved (provided that you do not ask for detailed information regarding individual competitors, e.g. competitors’ prices or volumes).

From suppliers

• Do not ask a supplier for Competitively Sensitive Information (e.g., detailed information about a competitor’s purchase costs, or purchase volumes);
• However, in the context of genuine commercial negotiations, it is generally permissible to discuss the market in general terms with suppliers (provided that you do not touch upon detailed information regarding individual competitors, e.g., competitors’ purchase prices or volumes).

To the extent that any Stora Enso employees think they may have exchanged Competitively Sensitive Information with a competitor, customer, or supplier, always contact Legal as soon as possible.

Subscriptions (new or continuing) to market intelligence databases

Market intelligence databases generally refer to external information sources regarding market intelligence. A market intelligence database usually requires that a company like Stora Enso need to subscribe in order to receive information from the database (e.g. news, statistics, indexes, etc.).

Stora Enso can subscribe to market intelligence databases only if:

• Subscribing to the market intelligence database is business-critical (i.e. it substantially advances Stora Enso’s strategy in a way that cannot be achieved by any other means) which is to be determined by the Division Leadership Team.
• The market intelligence database has a clear methodology describing how the data gathering is done and what information is reported. The methodology must be requested from the market intelligence provider, reviewed, and pre-approved by Legal. Ideally, the methodology also sets out the safeguards performed by the database provider to ensure that it aggregates any specific data reported to it before the data is shared on the database.
• The group of market players that contribute information to the market intelligence database is large and diverse enough to allow the data to be aggregated and to ensure that Competitively Sensitive Information of individual contributors cannot be identified (i.e. the more contributors to the source data there are, the less likely it is that any competitively sensitive, non-public information can be identified through the database)
• Any company-specific information that is shared in the database should by its nature be such which could be made public without infringing competition laws; and
• Market intelligence databases with overlapping information are avoided, i.e. do not subscribe to multiple databases for the same market.

Existing subscriptions to market intelligence databases already in use should be assessed by Divisions in light of the above criteria.

Access to market intelligence databases should be limited to a certain group of employees within each Division (e.g. Market Intelligence team), for whose tasks such access is deemed necessary (e.g. because they gather relevant information from the market intelligence database and provide focused reports to other employees using company authorized channels, such as e-mail and Microsoft Teams).

Creation of documents and communications

All business-related documents and communications (in the widest sense of the word, including letters, memos, notes, e-mails, instant messages, etc.) must be produced taking into account competition law. Sometimes, documents may convey the false impression that there have been contacts with competitors on anti-competitive matters, and thus are key targets for competition authorities’ review. It is therefore of great importance that the language used by Stora Enso employees in all documents is (i) clear and precise, and (ii) carefully selected in order to avoid any potential misinterpretation.

Moreover, documents lacking references to the underlying source material or otherwise containing careless and/or inappropriate language may make lawful conduct appear suspicious. This may in turn lead to unnecessary investigations by competition authorities, and thereby potentially generate significant costs for Stora Enso and/or damage Stora Enso‘s public reputation.

Guidelines for creating documents and communications

Stora Enso employees should always adhere to the following guidance:

• Ask yourself whether anyone and especially a competition authority could misinterpret what you are expressing;
• Always make clear, precise, and accurate references to the source of market intelligence material (i.e. name of customer, name of individual, date and time of interaction, etc.). As an example, information on competitors’ prices received from a customer will look extremely suspicious unless the source is clearly stated;
• Always use clear and precise language when discussing market-related information. In particular, avoid using language that could imply that Stora Enso’s prices or terms are not based on Stora Enso’s independent commercial judgment;
• Market-related communications should take place only via Stora Enso authorized communication channels (e.g. Microsoft Teams and other 365 applications) and is prohibited to be exchanged via unauthorized platforms suchs as Whatsapp, Wechat, Messenger and similar. Please read Stora Enso’s IT Guideline for more information;
• Do not use language that could falsely imply that there is collusive conduct in the industry, such as “this pricing is in accordance with industry policy” or “price-cutting is against the interests of the industry”. Avoid using phrases like “industry view;
• Do not overstate the significance of Stora Enso’s competitive position or market power. Avoid using phrases like “dominant position” or “price/market leader”;
• Do not understate the competitive position of Stora Enso’s current and potential competitors by using phrases such as “enormous barriers to entry/expansion”;
• Do not use language that could falsely imply that there is illegal or questionable behaviour, such as “please destroy after reading”; and
• Do not speculate or comment on the legality or potential illegality of any business conduct. Do not use phrases like “this can be illegal” or “this might be against the law”.

If you have a concern, issue, or question regarding the appropriateness of language that you have used (or seen/heard others use), please contact Legal without delay.

Retention of documents and communications

Stora Enso employees should follow the following best practices for the retention of documents and communications:

• You should not destroy or otherwise alter documents, communications, or records because you think that they may contain inappropriate information. Doing so could damage Stora Enso’s reputation or credibility with competition authorities if such conduct comes to light in a future investigation
• You should also keep in mind that destroying, concealing, and/or altering an original (hard-copy or electronic) document may not prevent its discovery, as there may well be more than one physical or electronic copy (e.g. on other devices). Also, “deleted” electronic data (e.g., documents, e-mails, phone records, text and/or instant messages) can almost always be recovered; and
• In case of Stora Enso is investigated by a competition authority, Stora Enso employees must not tamper with, destroy, or conceal documents during such investigation. For more guidance on competition authorities’ investigations and unannounced inspections, please see section 3.13.

Trade associations

Trade associations can have an important role in business and help to develop the industry (which is in the interests of other stakeholders too). Discussions in this context can serve a useful and legitimate function. Also, meetings of trade associations are not themselves anti-competitive.

However, activities within trade associations need to be carefully examined. Trade associations by their very nature represent a forum for contact between competitors. Therefore, they present potential competition law risks (e.g. if discussions in a trade association go beyond what is permissible from a competition law perspective).

Against this background, Stora Enso employees participating in trade association meetings and other activities need to always comply with the rules on (i) agreements and arrangements between competitors (see section 3.2), (ii) sharing information with competitors (see section 3.2), and (iii) attendance at industry events (see section 3.7 - Industry events).

Joining a trade association

Approval from (i) (a) Division Head, (b) Group Function Head, or (c) Country Manager, and (ii) Legal is required in case Stora Enso wishes to join a trade association.

Joining a trade association should be business-critical (i.e. it substantially advances Stora Enso’s strategy in a way that cannot be achieved by any other means). If in a new trade association there are (i) Stora Enso’s competitors among members, and (ii) discussions on market-related topics, the association should have a written statement and instructions on competition law compliance (such as a statement that the association complies with applicable competition laws and guidance on which topics can and cannot be discussed in the association) in order for the new membership to be approved.

Mill visits

Visits to mills and other production facilities, plantations, laboratories, and logistic hubs can have legitimate reasons which ultimately benefit consumers. However, in order to minimize the risk of misinterpretation, certain safeguards must always be in place.

Mill visits to Stora Enso’s own facilities and to external facilities that do not compete with Stora Enso present no competition law risks.

Mill visits to or by competitors can benefit consumers. However, they also present significant antitrust risks. Therefore, Stora Enso employees should only visit competing mills (or host visitors from competing mills) when there are major potential consumer benefits and where appropriate safeguards are in place.

Against this background, Stora Enso employees should always adhere to the following guidance regarding mill visits:

• Proposals for mill visits to or by competitors must be reviewed and cleared on a case by case basis by the Division Head or Business Unit Head, as applicable. Once approved by the Division Head or Business Unit Head, the proposals also need to be approved by Legal;
• Visits to competing mills by invitation from suppliers for the purpose of demonstrating supplier equipment installed at the competing mill are only allowed if the mill visit is part of a concrete and appropriately documented investment process;
• Stora Enso mills may only allow competitors’ reasonable access for the purpose of demonstrating supplier equipment installed at our mills if there is written confirmation from senior management at the competitor that the visit is strictly necessary in order to make a decision on a substantial investment;
• Mill visits to or by competing mills for the purpose of learning how to solve purely technical problems in respect of production common to the participating mills are likely to be cleared;
• Mill visits to or by competing mills in connection with legitimate industry or trade association meetings and activities are likely to be cleared; and
• Mill visits to or by competing mills as a tool for benchmarking general human resources and organizational practices, health and safety issues, and general environmental issues are likely to be cleared.

Exception. To the extent that the competitor is a customer or supplier of Stora Enso, mill visits made solely in connection with ordinary commercial contacts in respect of the relevant customer/supplier relationship do not require previous clearance from Legal. However, (i) inform your Division Head and (ii) do read and comply with sections 3.2 - Contacts with competitors and 3.3 - Buying from and selling to competitors of This Policy if you are planning to make or host such a visit.

Joint Purchasing

Joint purchasing means an arrangement under which two or more parties agree to jointly source products or services. Joint purchasing can take many forms. It may be carried out by e.g. a jointly controlled company, a company in which many other companies have non-controlling stakes, by a contractual arrangement, or by even a looser form of cooperation. The products or services may be used by each party in the production of other products or resold in their existing form.

Joint purchasing agreements can create significant benefits for consumers and markets. They may create cost savings in the form of lower purchase prices or reduced transaction, transportation, and storage costs, which can, in turn, be passed on to customers. They can also encourage suppliers to innovate and introduce new or improved products to the relevant markets. Purchasing goods or services together with other companies can therefore be fully legitimate and a way for companies like Stora Enso to save costs, to the benefit of both shareholders and consumers.

However, joint purchasing may also entail considerable competition law risks if it prevents, restricts, or distorts competition in any way. Agreements that involve fixing of purchase prices or sharing markets can be a serious restriction of competition. Also, joint purchasing arrangements which serve as a tool to engage in price fixing, output limitation, or market allocation in a selling market can be seen as disguised cartels.

Whether joint purchasing is permitted or not depends on the specific circumstances of each case. Joint purchasing requires often a thorough competition law analysis. Careful assessment is required especially in the following circumstances:

• Purchasing companies are competitors in one or several selling markets;
• Purchasing companies together account for a large share of the purchasing market and/or a downstream selling market;
• There are only a limited number of suppliers of the concerned product or service, and/or the barriers to enter into the supplying market are high;
• There is a low total number of competitors in the selling market, and/or few competitors outside of the purchasing cooperation; and
• Cooperation extends to activities other than the coordination of the conditions for the purchase of the goods or service in question (i.e. joint marketing or sales activities);
• Participating competitors reach a high commonality of costs through the joint purchasing; or
• There are pre-existing links between the participating competitors, such as other joint purchasing agreements.

Competition rules do not only apply with respect to relationships between competitors (horizontal relationship) but can also apply with respect to relationships between a company and its customers, distributors, and suppliers (vertical relationship).

With respect to vertical relationships with customers, distributors, and suppliers, special attention should be paid to the following topics:

• Agreements restricting the right of a distributor or other buyer to determine its own selling prices. Setting a minimum sales price is prohibited. Setting a maximum price or making recommendations is generally permitted so long as it does not indirectly operate as a minimum price requirement;
• Restrictions on the rights of the distributor or other buyer to re-sell by reference to geographical territories or specified customers. Subject to certain (limited) exceptions, as a rule, Stora Enso‘s buyers should not be prohibited from selling to customers outside of their territory when such customers contact them (i.e. “passive sales” must be allowed);
• Long-term sale or purchase agreements. Long-term selling or purchasing agreements that cover all or a substantial part of the needs or output of a customer or a supplier (exclusivity arrangements) may by their very nature be an area of concern since such arrangements lock up the parties and restrict the possibilities of other suppliers or purchasers to do business on the market. However, there are certain situations where such arrangements could be justified, e.g. when the supplier has to undertake major investments in order to supply, or when sponsoring a new market entrant;
• Agreements containing exclusive supply or purchase obligations. Exclusive obligations on a customer to buy a certain type of product only from Stora Enso and not from any competing manufacturer will generally be automatically permitted if (i) Stora Enso‘s share of the market on which it sells the product is less than 30% and the buyer’s share of the market on which it buys the product is less than 30%; and (ii) the agreement is no longer than five years and not tacitly renewable beyond a period of five years. Similarly, exclusive obligations on a supplier to supply only Stora Enso may in some cases also be allowed; and
• Where the conclusion of a contract is subject to acceptance of unrelated supplementary obligations. Tying is a particular concern in markets where Stora Enso has a significant market share. A typical example of tying would be for Stora Enso to only supply a product in which it has a significant market share to a customer if the customer also buys another product for which Stora Enso has a weaker market position.

Please also refer to section 3.5 - Collecting and sharing market intelligence for guidance on market intelligence received from e.g. customers, suppliers, or other third parties.

If you have any doubts or questions related to vertical relations with customers, distributors, or suppliers, always contact Legal.

The term “dominant position” implies a position of considerable economic strength, which enables a company to prevent effective competition in the market by behaving substantially independently of its competitors and customers.

Dominance is not simply a question of a company having a large market share. Several other factors have to be taken into account. Dominance can only exist in relation to a particular product and geographical market. Market definition can be a complex task and requires both legal and economic assessment.

There is no clear legal threshold beyond which a company is considered to be dominant. However, Stora Enso employees should exercise special care and consult Legal when conducting business in a market where Stora Enso is likely to have either (i) a leading position; or (ii) an estimated market share exceeding 30%. A company in a dominant position must not, without an objective justification, act in a manner that constitutes abuse.

Examples of behaviour that could amount to an abuse of a dominant position include:

• Imposing unfair purchase or selling prices or other unfair trading conditions which may be assumed to be intended to drive competitors from the market (e.g. to charge prices that are so high that the prices have no relation to the economic value of the product supplied or so low that they are below cost);
• Limiting production, markets, or technical development to the prejudice of consumers;
• Discrimination (i.e. applying dissimilar conditions to equivalent transactions with other trading parties and thereby placing them at a competitive disadvantage, e.g. if the different prices do not reflect the differences in costs of supplying to the different customers);
• Tying (i.e. making the conclusion of contracts subject to acceptance by the other parties of supplementary obligations which have no connection with the subject of such contracts, e.g. by their nature or according to commercial usage; and
• Discount and rebate policies if they are loyalty rebates aiming at committing the customer to buy all or most of its requirements from the supplier (volume rebates are generally allowed if such rebates reflect the suppliers’ cost savings in mass production); and
• Refusing to supply, if the refusal is a part of a boycott system. There should typically be objective reasons for a refusal to supply on market terms (e.g. the financial position of the customer).
• Please also see guidance regarding document and communication creation in section 3.6 of This Policy.

Mergers and Acquisitions (M&A)

Competition authorities investigate mergers and acquisitions in order to make sure that they will not harm free competition by e.g. reinforcing or creating dominant positions.

Merger control rules vary across different jurisdictions. The rules usually include an obligation on the merging companies to make a merger control filing if certain thresholds are met (based on e.g. revenue, market share, and/or asset value). Based on such filing, the relevant authority will investigate whether or not the transaction is harmful to competition.

Merger control issues must always be referred to Legal. It is also important for each Stora Enso employee to understand that such matters may require that the organization provides extensive information on very short notice.

Please also visit the document and communications creation guideline of This Policy (section 3.6)

Information exchange in due diligence process

It should be noted that information exchange in due diligence context has the potential to raise antitrust concerns. This is the case especially if the buyer, seller, or target are competitors since the exchange of Competitively Sensitive Information between competitors may violate competition law (see section 3.2).

The European Commission has stated that the exchange of market information may restrict competition in particular in situations where it can enable a company to be aware of the market strategies of its competitor. The signing of confidentiality and non-disclosure agreements by the relevant parties can offer an important assurance that the exchange of information in due diligence will not have an anti-competitive object or effect. In such agreements, there are usually provisions to mitigate potential competition law risk, such as (i) prohibition against using confidential information except to evaluate the transaction, (ii) prohibition against disclosing confidential information to anyone, other than the parties’ representatives engaged in the evaluation, and (iii) obligation to return or destroy such information if the transaction does not proceed.

If the parties are competitors, disclosure of Competitively Sensitive Information may violate competition law. This is especially the case if the team responsible for reviewing information related to the transaction includes individuals responsible for the receiving party’s commercial policy. Usually, certain compromises are made in order to satisfy the receiving party’s legitimate interest in evaluating the transaction and at the same time to appropriately mitigate the potential antitrust risks, such as (i) disclosing information only in aggregated or historical form, and/or (ii) disclosing information only to external counsel, accountants or business consultants who agree (with their client’s consent) not to disclose information to the receiving party. These representatives (generally referred to as “clean teams”) may also sign supplementary confidentiality agreements. Such supplementary agreements normally restrict the use of the information exchanged for the limited purpose of assessing the transaction, negotiating the transaction price, etc. An internal form of a clean team would be a team on the receiving party’s side where no member of the clean team is responsible for the receiving party’s commercial policy in relation to the relevant competing goods or services.

Please read Stora Enso’s M&A Guideline for more information.

Joint ventures

There are many situations in which a company can decide that it needs to work with a partner (or more than one) to a particular project. The task of choosing a partner will involve careful consideration of the known abilities and resources of the companies in question. Such companies may be actual competitors or potential competitors.

The degree of cooperation proposed may be quite limited (e.g. the operation of a joint purchasing arrangement or shared laboratory work). Alternatively, it may be very extensive (e.g. a proposed merger of the parties’ entire interests in a particular field with a need to give up their individual businesses in that market in favour of the new enterprise).

For the purposes of competition law, certain joint ventures are treated as mergers or acquisitions. Therefore, joint ventures can be subject to relevant merger control rules. Other types of joint ventures may fall outside of the merger control rules and may instead be subject to the competition rules relating to e.g. cooperation between competitors.

Particular guidelines can be found in relation to the following types of cooperation between competitors:

• Agreements on research and development (see section 3.9); and
• Purchasing agreements (see section 3.9)

When establishing a joint venture, it should be considered if there is a risk that the parents may potentially utilize the joint venture to coordinate their behavior in the market where the parent companies are competitors (in particular in markets related to the business activities of the joint venture). Certain guidelines shall normally be implemented if this may potentially be the case.

If you have a concern, issue, or question regarding any type of potential transaction or joint venture (however small/insignificant it may seem), always consult Legal.

Enquiries from competition authorities

Stora Enso‘s policy is to cooperate fully with investigations of competition authorities (e.g. the European Commission or national competition authorities).

To ensure that an investigation is conducted properly, on time and taking into account the experiences of the entire Stora Enso Group, any inquiry or request for information from a competition authority must be referred to Legal immediately, and any reply should be provided via Legal only.

Competition authorities have far-reaching rights to request information when investigating potentially anti-competitive behaviour or assessing various kinds of M&A transactions.

Dawn raid inspections at company premises

An unannounced inspection by a competition authority is generally referred to as a “dawn raid” inspection.

Each Stora Enso office and production facility shall have one person to represent Stora Enso in case of a dawn raid inspection (“Responsible Person”). In addition, at least two deputies shall be appointed by the Responsible Person. The Responsible Person shall ensure that the identities of the Responsible Person and the deputies are kept up to date on a specific list (which should be updated at least once a year). If an office or production facility fails to appoint its Responsible Person or two deputies, the appointments shall be made by Legal.

In case of a dawn raid, Stora Enso employees must not, under any circumstances, (i) provide false or misleading information to inspectors, (ii) be hostile towards inspectors, (iii) tamper with, destroy or conceal documents during an investigation, (iv) break a seal affixed by inspectors, (v) obstruct the raid, the inspectors, or the investigation in any way, or (vi) discuss the raid (or any aspect of it) with anyone outside of Stora Enso.

Under EU legislation, inspectors from the European Commission have the right to:

• Enter any company premises and seal them as necessary. The European Commission can also conduct an inspection in any other premises, land or means of transport, including the private homes of directors, managers and other members of staff. This requires that there is a reasonable suspicion that business-related documents or other records, which may be relevant as evidence of the alleged competition law infringement and are related to the scope of the inspection, are being kept there;
• Examine and take copies of any type of business-related documents or data, irrespective of the medium on which they are stored, including both hard-copy materials (e.g., notebooks, diaries and printed presentations) and electronic materials (e.g., emails and instant messages). The inspectors are only entitled to obtain materials that fall within the scope of the investigation (which is outlined in the authority’s inspection decision).
  - If Stora Enso becomes subject to a dawn raid inspection, detailed notes shall be made of all documents and other material examined by the inspectors; and
  - Each relevant material shall have three copies: one for the inspectors, one for Stora Enso and one for Stora Enso’s external legal counsel. Always ensure that each document is restored in its initial position after it has been copied;
• Ask any representative or member of staff for explanations on facts or documents or other material, relating to the scope of the investigation, and to record the answers;
  - If Stora Enso becomes subject to a dawn raid inspection and the inspectors ask questions, it is normally the company (not the inspectors) that is entitled to decide who should provide the explanation. However, if the inspectors demand to speak to a specific person who logically could easily provide an explanation, such as the author of a document, that person should be made available to the inspectors.
  - If the best qualified person or the information necessary to answer a question is not available, this shall be explained to the inspectors with an offer to provide the answer later in writing.
  - A legal counsel must always be present during interviews with Stora Enso employees.
  - If questions are answered, you should answer them based on facts. You should not give an opinion or speculation. If you are is uncertain about the answer, this should be mentioned.
  - Although there is an obligation to cooperate with the inspectors, you should not (i) self-incriminate, or (ii) provide an answer that would result in Stora Enso admitting the existence of an infringement.
  - There is no obligation to answer questions that fall outside the scope of your duties, or to which you do not know the answer. In case you have doubts, ask to respond later in writing.
  - Detailed notes should be made of all questions asked by and oral explanations given to the inspectors. Also, a copy of the notes taken by the inspectors should be requested.
• Search a company’s entire IT environment (servers, desktop computers, laptops, tablets and other mobile devices) and all storage media (CD-ROMs, DVDs, USB-keys, external hard-drives, etc.) using both (i) the European Commission’s own hardware and software, and (ii) the search tools built into the company’s media.
  - This covers also private devices used for business purposes (so called Bring Your Own Devices), external hard drives, backup tapes and cloud-computing services. The inspectors may also make an integral copy of a digital storage medium.
  - If the European Commission’s review of electronic data is not completed during the on-site inspection, the European Commission can also decide to copy the data set, secure it in a sealed envelope and invite company representatives to be present when the sealed envelope is later opened at the European Commission’s premises. Alternatively, the European Commission may decide to return the sealed envelope to the company for safekeeping until further notice. The company will receive a data carrier (e.g. a DVD) on which all final data selected by the inspectors are stored and it will be requested to sign printed lists of data items selected.
  - Personal data (e.g. names, telephone numbers and e-mail addresses of employees), although not being the targets of the inspection, may be copied and obtained by the officials if included in business-related documents or other material.

However, the European Commission’s inspectors do not have the right to review and take copies of documents or other material:

• That contain communication between Stora Enso and external legal counsels. Documents to or from external legal counsels (i.e. not in-house lawyers) are often protected from disclosure to competition authorities by attorney-client privilege. Such documents should always be clearly marked as containing attorney-client communications;
• That contain commercial secrets of a technical nature; or
• That fall outside the specific scope of the inspection.

Potential disagreements between Stora Enso and the inspectors during a dawn raid regarding whether e.g. a document is covered by legal privilege or scope of the inspection shall be recorded in writing (which should be shared with Legal).

The powers of national competition authorities are at least broadly similar to the powers of the European Commission. Always consult Legal if you have any questions in this regard.

Reception/Arrival

In order to protect the legal interests of Stora Enso and make sure that a dawn raid inspection is conducted legally and properly, always comply with the following:

• When inspectors arrive at company premises, they normally go to the reception desk, identify themselves and ask to see a senior manager. The receptionists or security personnel at the reception should immediately (i) contact the Responsible Person or, if he or she is absent, one of the deputies, and (ii) request a copy of the authority’s inspection decision, so that the terms/scope of this can be carefully checked; and
• The inspectors should be politely asked to remain in the reception until the Responsible Person and Legal come to meet them. If the inspectors believe that they are being unreasonably delayed at reception, it may result in the company being fined for obstruction or failure to cooperate. Therefore, the inspectors should be dealt with promptly and politely at the reception. However, receptionists/security personnel must not provide access cards to the inspectors and the inspectors must not be allowed to wander Stora Enso’s premises unaccompanied.

As noted above, in case of a dawn raid, Stora Enso employees must not, under any circumstances, (i) provide false or misleading information to inspectors, (ii) be hostile towards inspectors, (iii) tamper with, destroy or conceal documents during an investigation, (iv) break a seal affixed by inspectors, (v) obstruct the raid, the inspectors, or the investigation in any way, or (vi) discuss the raid (or any aspect of it) with anyone outside of Stora Enso.