In November 2002 a dealer in Volvo and Renault cars sent an e-mail to seven competitors. He suggested in the message that they should add SEK 3,000 to Volvo’s recommended price “as usual”. The e-mail went astray and ended up published in Dagens Industri, Sweden’s largest business newspaper. After the Swedish Competition Authority (‘SCA’) brought legal action, the Stockholm District Court held in June 2006 that the collaboration should be considered to be a concerted practice. However, the effect on competition was not substantial enough to be illegal. (For more information on the ruling in the District Court: http://competition.practicallaw.com/7-203-2213)
The SCA appealed to the Swedish Market Court. On 9 September 2008 the Market Court found the car retailers to have been in breach of Section 6 of the Swedish Competition Act and of Article 81 of the EC Treaty. The retailers were fined amounts between a half and 6 million Swedish Kronor respectively.
The Market Court concluded in its ruling, agreeing with the District Court’s opinion, that the retailers had been engaged in horizontal price-fixing agreements for both new and used Volvo cars, which had an anti-competitive effect. Unlike the District Court, the Market Court found that the car retailers had been dividing the new car market between them. Price fixing and market sharing meet the criteria stated in Section 6 of the Competition Act.
Moreover, in contrast to the Districts Court’s decision, the Market Court found that the there was a risk that the cooperation could affect trade with other member states, which is enough to hold them responsible for a breach according to Article 81 of the EC Treaty.
The parties’ power on the relevant market was seen as considerable, which in combination with the serious nature of the agreements between the retailers constitutes a clear violation of the competition regulation.
While the SCA declared itself satisfied with the ruling, it may be noted that the fines meted out amounted to less then 5 percent of what was first demanded by the SCA, and less then 11 percent of the claim as finally adjusted by the SCA before the court. Despite the discrepancy between the fines as originally claimed and as finally decided, the retailers were made to bear their own legal costs, reflecting the principal focus of the proceedings on whether the Competition Act had been breached or not.