The Finnish Competition and Consumer Authority (FCCA) has investigated the effects of pricing and rate-setting by Matkahuolto on long-distance coach travel. The preliminary evaluation by the FCCA suggests that it has been problematic to efficient and functional competition that, in general, individual coach companies have been pricing their ticket products in line with Matkahuolto’s kilometre-based rate table that provides the basis for the pricing of single tickets. Matkahuolto has informed the FCCA that it will discontinue confirming and publishing its own single-ticket rate and the related rate table, both on its website and in its agreements with other transport providers.
Matkahuolto is a coach service and marketing company whose business includes travel services for coach and bus companies, and the sale of Matkahuolto’s own ticket products. Matkahuolto’s pricing of single ticket products is based on its kilometre-based rate table and the related basic pricing for discounts granted to different customer groups. Matkahuolto has published its kilometre-based rate table on its website and as part of its agreements with transport companies on the use of Matkahuolto’s services. According to the information gathered by the FCCA, a large amount of ticket-product pricing by transport companies has been in line with Matkahuolto’s kilometre-based rate table.
The basis of competition in a well-functioning market is that all companies active on the market independently define their market practices, and independently price their ticket products. If businesses set the same prices on the basis of a common understanding, the effect is to restrict price competition and consumer choice.
According to the preliminary investigation by the FCCA, the application of the kilometre-based rate table’s pricing and the table’s publication seem to have a significant restrictive effect on competition. The FCCA believes that Matkahuolto’s kilometre-based rate table has aligned the prices of ticket products and reduced transport companies’ incentives to compete on the basis of price.
On 14 September 2017, Matkahuolto informed the FCCA that it would discontinue confirming and publishing its own single-ticket rate and the related rate table on its website, and in its agreements with other transport providers. In addition, Matkahuolto will stop selling its own single tickets, based on its single-ticket rate, to customers. Matkahuolto can sell single tickets at retail prices set by the transport companies themselves. Upon request, it can provide individual consumers with information on former single-ticket prices. The FCCA has set a EUR 75,000 conditional fine to enforce this commitment.
More information:
- Pia-Maria Sillanpää, Head of Research, tel. +358 29 505 3613
- Valtteri Virtanen, Assistant Director, tel. +358 29 505 3621
firstname.lastname@kkv.fi