Sweden: Swedish Competition Authority initiates proceedings against bus companies for illicit cartel activity

01 January 2011

David Nilsson

The Swedish Competition Authority (“SCA”) has initiated proceedings before the Stockholm District Court against Ölvemarks Holiday Aktiebolag (“Ölvemarks”) and Scandorama AB (“Scandorama”) against two bus companies, in respect of a price fixing and market sharing cartel.  Ölvemarks and Scandorama have allegedly, inter alia, colluded on prices in breach of the Swedish Competition Act and Article 101 TFEU. It appears that both companies admit the material facts of the case but consider that the cooperation was not illegal.

The cooperation consisted of price collusion, where the prices of the companies’ corresponding tours were coordinated. Generally, a price difference of not more than SEK 200-300 or 10% was accepted on similar tours. The collusion also stipulated fixed rebates. Furthermore, the companies restricted the output, in the form of the selection of tours offered, and divided up the market between them.

According to the SCA, the cooperation was initiated in April 2007 when a merger between the parent companies of Ölvemarks and Scandorama was contemplated. In July 2007, the parties signed a framework and option agreement concerning a transfer of shares in Ölvemarks to Scandorama Travel AB within a two year period. In January 2008, 10% of the shares in Ölvemarks were transferred to Scandorama Travel AB and on 4 February 2009 an additional 10% of the shares were transferred, resulting in Scandorama Travel AB then owning 20% of Ölvemarks. On 30 April 2009, a settlement agreement was signed, by which the previous framework agreement was voided and on 12 June 2009 Ölvemarks acquired 100% of Scandorama Travel AB’s shares. The SCA states that until that time, Scandorama and Ölvemarks should have been considered two different companies and were under an obligation to act independently from each other.

Ölvemarks and Scandorama are the two largest organizers of packaged coach tours from Sweden to Europe, with approximately 60-70,000 journeys annually. Scandorama and Ölvemarks together have a share of approximately 40% of the relevant market, which was assessed to be non-exclusive package tours by bus covering parts of Sweden and Norway.

The SCA has petitioned the District Court of Stockholm to impose a fine as penalty for the anti-competitive behaviour in the amount of SEK 4 million in respect of Scandorama and SEK 9.2 million with respect to Ölvemarks. Pursuant to the writ of summons, the fine for horizontal price collusion is generally 5-10% of the turnover of an undertaking. The SCA considers that due to the nature of the violation, the fine should in this case be 7%. Since the companies have cooperated with the SCA during the investigation process, they are eligible for a reduction of fine with about 30-50% in accordance with the SCA notice on immunity from fines and reduction of fines in cartel cases.  These reductions have already been taken into account in the level of the fines sought.

Source: Writ of summons in case no. 645/2010 of the SCA available (only in Swedish) at http://www.kkv.se/upload/Filer/Konkurrens/2010/stamningsansokan/ansök_stämning_dnr%20645_2010.pdf