The Supreme Administrative Court of Finland has today (20.8.2019) in its annual report KHO:2019:98 increased the penalty payments imposed by the Market Court on several bus companies in December 2017. The fines imposed by the Supreme Administrative Court of Finland totaled more than EUR 8 million. According to the Supreme Administrative Court of Finland the decision of the Market Court with regard to the penalty payments had to be amended on the ground that imposing the same amount of penalty on differently sized companies without giving reasons was contrary to the principle of equal treatment of the parties to the infringement within the meaning of the case-law of the Court of Justice of the European Union. The Supreme Administrative Court of Finland did not increase the penalty fees for the Bus Federation and Länsilinjat Oy. Merilampi represented Länsilinjat Oy in cooperation with Merkurius Attorneys.

Background to the dispute

In December 2017, the Market Court imposed a fine of EUR 100,000 on Matkahuolto, seven bus companies and the Federation of Buses for market sharing infringement, contrary to the submission of the Finnish Competition and Consumer Authority. The restrictive parties had excluded scheduled services from Matkahuolto’s scheduling, ticketing and parcel services, thereby restricting competition in the market for coach and bus services open to competition, contrary to Article 101 of the Treaty on the Functioning of European Union and Article 5 of the Competition Act.

Matkahuolto, the bus companies, the Bus Federation and the Finnish Competition and Consumer Authority appealed the decision of the Market Court to the Supreme Administrative Court of Finland.

Oral proceeding

The Market Court gave an oral hearing on the case in the first instance. The Supreme Administrative Court of Finland held that Article 6 § 1 of the ECHR, as interpreted by the European Court of Human Rights in its case law, did not obligate the Supreme Administrative Court to re-examine the evidence already submitted to the Market Court.

Contrary to the views of Matkahuolto, some of the bus companies and the Bus Federation, the Supreme Administrative Court of Finland determined that there was no need for oral hearing under section 37 of the Administrative Judicial Procedure Act.

Nature and justification of the competition violation

The Supreme Administrative Court of Finland found that Matkahuolto, the bus companies and the Bus Federation had closed scheduled services on Matkahuolto’s scheduling, ticketing and parcel services. According to the Decision, the object of the concerted practice was to maintain the market for the bus companies operating in the sector, mainly through transitional contracts and by preventing or impeding access to the market for new scheduled services. The Supreme Administrative Court of Finland held that this was a restriction of competition the object of which was intended to divide the market within the meaning of the Court’s settled case-law. The Supreme Administrative Court of Finland also found that competition infringement had partially prevented and delayed market opening and had also hampered achievement of the objective of opening up Union-wide competition.

According to the Decision of the Supreme Administrative Court of Finland, the antitrust infringement ended for Matkahuolto’s scheduled services in June 2012, for its ticket sales services in September 2012 and for its parcel services in November-December 2015.

Considering the efficiency arguments expressed by Matkahuolto, the bus companies and the Bus Federation, the Supreme Administrative Court of Finland noted, amongst other things, that the Public Transport Act or the Union Service Contract Regulation did not obligate companies to exclude scheduled services from Matkahuolto’s scheduling and ticketing services. According to the decision of the Supreme Administrative Court of Finland, neither the legal framework nor the guidance from authorities had created any legal or regulatory framework which would have excluded the possibility of providing Matkahuolto’s scheduling and ticketing services for scheduled services.

According to the decision of the Supreme Administrative Court of Finland, there was no mutual connection between Matkahuolto’s scheduling and ticketing services and parcel delivery services due to problems with the acceptance of subsidized tickets, and the exclusion of scheduled services from Matkahuolto’s parcel delivery systems may not have been justified by subsidized tickets or the need for technical development of the Matkahuolto travel service system.

The decision further stated that exclusion of scheduled services from Matkahuolto’s scheduling and ticketing systems and parcel services could not be justified on the basis of compliance with Article 107 (1) TFEU on Union State aid rules.

Penalty

In its decision, the Supreme Administrative Court of Finland stated that imposing the same amount of fines on different economic entities without giving a reason was contrary to the principle of equal treatment of the infringement within the meaning of the case-law of the Court of Justice. The Supreme Administrative Court of Finland held that the Market Court’s decision on the penalty payments had already been amended on this basis and imposed higher penalties on most of the parties than the Market Court. However, the penalties (EUR 100,000) imposed on Länsilinjat Oy and the Bus Federation remained unchanged. The fines imposed by the Supreme Administrative Court of Finland (more than EUR 8 million in total) were still far from the level proposed by the Finnish Competition and Consumer Authority (more than EUR 30 million in total).

Merilampi represented Länsilinjat Oy in cooperation with Merkurius Attorneys.