The Market Court imposed EUR 1.5 million in penalty payments on prohibited co-operation for six companies operating in public transport in the Turku region

In accordance with the proposal of the Finnish Competition and Consumer Authority, the Market Court found that bus companies had submitted joint bids in breach of the Finnish Competition Act in tenders for public transport in the Turku region, i.e. Föli. In practice, the companies eliminated all competition between them and divided the operation of the transport services among themselves following a pre-agreed plan.

In September 2021, the Finnish Competition and Consumer Authority proposed that the Market Court imposes sanctions of approximately EUR 1.9 million on Jalon Liikenne Oy, Lehtisen Linja Oy, Linjaliikenne Muurinen Oy, Linjaliikenne Nyholm Oy, Savonlinja Oy, Turun Citybus Oy and to LS-Liikennelinjat Oy joint venture, which is owned by some of these companies. According to the FCCA, the companies submitted prohibited joint bids in in three public tenders for Föli transport in 2013, 2014 and 2016. The public transport market was being opened to competition during that time period.

In its decision, the Market Court held the three joint bids in Föli’s tenders constituted a prohibited co-operation between competitors and included price fixing and market sharing. According to the Market Court, this was a serious and systematic infringement. Joint bids resulted in contracts with significant economic value. The companies can be said to have benefited from the infringement on the grounds that they carried out additional transport services thereby receiving income to themselves.

The Market Court imposed penalty payments on the companies amounting to €1,54 million. The Market Court did not impose a penalty payment on Lehtisen Linja Oy, as the company had no turnover for the financial year preceding the Market Court’s decision.

Joint bids between competitors are usually in violation of the Competition Act

In principle, joint bids between competing companies are prohibited, as each company must determine independently on its own competitive behaviour. If a company is able to participate independently in the tendering process, submitting a joint bid is usually not permitted.

However, a joint bid that restricts competition may in some situation produce efficiency gains that outweigh the negative effects of restriction on competition and that also benefit both the contracting party and final consumers. In these situations, a joint bid that otherwise would breach the Competition Act may be justifiable. The burden of proof regarding the efficiency gains lies with the company invoking such gains.

The compliance of joint bids with competition law submitted by competing companies was assessed for the first time in more detail in a Finnish court.

Market Court’s decision can be appealed to the Supreme Administrative Court.