A lenient stance on price recommendations by the Finnish Market Court

By Päivi Tammilehto

01-2021

On 15 December 2020, the Market Court agreed with the submission of the Finnish Competition and Consumer Authority ("FCCA"), that the regional association of driving schools in Finland's most populous region, Uusimaa, ("Association") as well as the Association's Board members, had breached competition law by issuing price recommendations which sought to increase the price level of driving lessons. However, the Market Court reduced some of the fines proposed to it by the FCCA quite drastically, and even more surprisingly, refrained from imposing fines altogether to some of the players despite a finding of a competition law infringement.

According to the FCCA's submission, illegal price recommendations took place during a period of approximately three and a half years. In addition, the FCCA argued that some of the driving schools had also colluded locally to increase prices. As a consequence, the FCCA proposed that a total approximately 310,000 euros in fines be imposed on nine undertakings and associations. The modest turnovers of local operators lead the FCCA to propose fines of the maximum amount of 10% of turnover to each of the parties involved. According to the FCCA the percentage share that the fine represents of the turnover should not be linked to the gravity and duration of the infringement, but rather the 10% cap is a precaution against excessive fines. Therefore, according to the FCCA, the gravity and the length of the infringement, as well as the effectiveness and dissuasiveness of competition law fines required for the maximum amount of fines to be imposed.

According to the Market Court, price recommendations had been proven to have taken place only for approximately a year. The Market Court also dismissed the claims of local collusion between three driving schools. More importantly, notwithstanding a finding of infringement, the Market Court drastically reduced the amount of fines to be imposed on the three main players, but also refrained from imposing fines altogether to more passive Board members. This led to a meagre 20,000 euros in fines in total for the Association and two Board members. Although having participated in a serious, by object restriction of competition, the Market Court found that there were such attenuating circumstances, (e.g. not having participated in the issuance of the recommendation or not having benefitted from the local price recommendation), that there was no need to impose fines on other Board members.

The time for appeal to the Supreme Administrative Court has not lapsed yet, and it is not known if the decision will be appealed. The Supreme Administrative Court has had the tendency to increase the fines as opposed to the Market Court. In addition, the FCCA may be reluctant to accept a stance that local by object restrictions may escape competition law enforcement. The decision of the Market Court in Finnish can be found here and the press release of the FCCA here.

For more information please contact Päivi Tammilehto.


 
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