ECLI:FI:KHO:2019:98

Competition – Cartels – Concerted practices – Market sharing – Oral proceedings – Written witness statements – Legal professional privilege – Restriction of competition by object – Justifications – Participation – Termination of participation in an infringement – Imposition of financial sanctions – Equal treatment – Ne bis in idem principle

1. Summary

Contrary to the Finnish Competition and Consumer Authority’s proposal, the Market Court imposed a penalty of EUR 100,000 each on Matkahuolto, seven bus companies or a group consisting of the same as well as the Finnish Bus and Coach Association for their participation in an anti-competitive market-sharing arrangement. The parties involved in the restrictive practice had prevented operators of regular services from accessing Matkahuolto’s timetable, ticket sales and parcel services and thus violated Article 101 of the Treaty on the Functioning of the European Union and section 5 of the Finnish Competition Act by restricting competition on the bus service market, which was opened to competition under the PSO Regulation and the Finnish Public Transport Act.

The Supreme Administrative Court had to rule on the appeals of Matkahuolto, the seven bus companies and the Finnish Bus and Coach Association as well as the Finnish Competition and Consumer Authority and decide whether the case warranted the imposition of financial sanctions and, if so, the amount of the penalties.

2. Oral proceedings

Matkahuolto, some of the bus companies and the Finnish Bus and Coach Association asked the Supreme Administrative Court to hold an oral hearing in the case. The Market Court, as the court of first instance in the case, had already held an oral hearing. The Supreme Administrative Court consequently found that based on Article 6(1) of the European Convention on Human Rights as interpreted by the European Court of Human Rights in its case law, it was not necessary to conduct new oral proceedings in order to re-evaluate the evidence presented in the Market Court.

Matkahuolto had submitted two written witness statements from private individuals to the Supreme Administrative Court. The Supreme Administrative Court concluded that there was no reason to question the credibility of the witness statements. The opponent in the case, the Finnish Competition and Consumer Authority, did not insist on hearing the witnesses in person. The Supreme Administrative Court took the witness statements into account in its deliberations.

The Supreme Administrative Court concluded that an oral hearing was not necessary for establishing the facts of the case pursuant to section 37 of the Finnish Administrative Judicial Procedure Act.

3. Legal professional privilege

E-mail correspondence appended to the Finnish Competition and Consumer Authority’s proposal of financial sanctions included a reference to legal advice received by Matkahuolto from its lawyers and a comment on the same by the company’s representative. The company’s business director had forwarded the e-mail first to others within the company and later to another member of the cartel.

The Supreme Administrative Court concluded that the legal advice given by the law firm clearly related to the case at hand and could be seen to constitute advice sought by the company in order to prepare its defence. The fact that the advice was given before the Finnish Competition and Consumer Authority had brought the anti-competition proceedings was irrelevant. The Supreme Administrative Court concluded that, in ambiguous cases, a wide latitude must be given to the right of cartel members to defend themselves, and the fact that the e-mail had been forwarded to an external cartel member the next day had to be disregarded.

The Supreme Administrative Court found, contrary to the Market Court, that the legal advice included in the e-mail in question was protected by the attorney-client privilege. The company was therefore under no obligation to disclose the e-mail to the Finnish Competition and Consumer Authority, the Finnish Competition and Consumer Authority had no right to base its proposal of financial sanctions on the contents of the e-mail, and the Market Court should not have admitted the e-mail as evidence. The Supreme Administrative Court did not take the legal advice included in the e-mail into account in its deliberations. The Supreme Administrative Court found that although the e-mail had been unlawfully used as the basis for the Finnish Competition and Consumer Authority’s proposal and admitted as evidence in the Market Court, the company’s right to defend itself had not been violated enough to compromise the presumption of innocence.

4. Restriction of competition by object

The Supreme Administrative Court found that Matkahuolto, the seven bus companies and the Finnish Bus and Coach Association had reached an agreement at the end of August or in early September of 2010, which was aimed at preventing any transport undertakings that were licensed to operate regular services after 23 June 2010 from accessing Matkahuolto’s timetable, ticket sales and parcel services. The objective of the concerted practice was to protect the market shares of existing bus companies that mostly operate under transitional contracts by preventing or hindering the opening of the market to new regular services. The Supreme Administrative Court concluded that the arrangement constituted a restrictive practice within the meaning established in the case law of the Court of Justice of the European Union and that the object of the practice was market sharing. The Finnish Competition and Consumer Authority therefore did not need to demonstrate that the practice had had a negative effect on the market, explore its harmfulness in any greater detail or identify the relevant market.

The Supreme Administrative Court found that the cartel’s restrictive practice had contributed to preventing and hindering the opening of the market and also hindered the attainment of the Union-wide objective of opening competition.

The restrictive practice terminated in June of 2012 in respect of Matkahuolto’s timetable services, in September of 2012 in respect of ticket sales and at the end of November or in early December of 2015 in respect of parcel services.

5. Justifications

The Supreme Administrative Court found that neither the Finnish Public Transport Act nor the European PSO Regulation gave Matkahuolto, the seven bus companies or the Finnish Bus and Coach Association an obligation within the meaning established in the case law of the Court of Justice of the European Union to prevent operators of regular services from accessing Matkahuolto’s timetable and ticket sales services. No legal frameworks or conditions within the meaning of case law had been established by legislation or official regulations that would have prevented the provision of Matkahuolto’s timetable and ticket sales services to operators of regular services. These operators were prevented from accessing Matkahuolto’s travel and parcel services by the independent actions of Matkahuolto, the seven bus companies and the Finnish Bus and Coach Association and not by an action of government.

The Supreme Administrative Court also found that preventing operators of regular services from accessing Matkahuolto’s ticket sales and timetable services had exceeded what could be deemed necessary to solve problems incurred by Matkahuolto from state-subsidised tickets, as regular services could, had the parties so wished, have been incorporated into Matkahuolto’s timetable and ticket sales services, for example, by informing customers that subsidised tickets were not valid on regular services.

The Supreme Administrative Court found no link resulting from problems with the validity of subsidised tickets between Matkahuolto’s timetable and ticket sales services and its parcel services. The Supreme Administrative Court also found that preventing operators of regular services from accessing Matkahuolto’s parcel services could not be justified by reasons relating to subsidised tickets or the need to redesign Matkahuolto’s travel service system.

The Supreme Administrative Court concluded that preventing operators of regular services from accessing Matkahuolto’s timetable and ticket sales systems as well as its parcel services also could not be justified by the need to comply with the state-aid rules laid down in Article 107(1) of the TFEU.

The Supreme Administrative Court found that the justifications put forward by Matkahuolto, the seven bus companies and the Finnish Bus and Coach Association, which were based on the economy of preventing operators of regular services from accessing Matkahuolto’s parcel services, mostly related to benefits derived by the parties to the restrictive arrangement from the practice. No evidence was presented of any increased efficiency from the perspective of the competitors who were prevented from using Matkahuolto’s parcel services or the end users of the services, i.e. consumers.

6. Financial sanctions

The Supreme Administrative Court found, in view of the fact that the parties to the restrictive practice were economic entities of different sizes, that imposing financial sanctions of the same magnitude on all the cartel members without justification was against the principle of equal treatment within the meaning of the case law of the Court of Justice of the European Union. The Supreme Administrative Court concluded that the Market Court’s ruling on financial sanctions had to be changed on this basis alone. In its ruling, the Supreme Administrative Court imposed heavier financial sanctions than those imposed by the Market Court on most of the parties to the anti-competitive arrangement.

The Supreme Administrative Court also found that competition law did not prevent the imposition of financial sanctions on both the Finnish Bus and Coach Association as a union of economic operators and the individual bus companies involved in the anti-competitive arrangement. Each of the parties was an independent legal entity with its own budget and targets, and each was responsible for its own business and protecting its own interests.

Furthermore, the Supreme Administrative Court found that the Finnish Bus and Coach Association was a separate legal entity from the bus companies that participated in the arrangement, even though the bus companies that are members of the Finnish Bus and Coach Association contribute financially to the operation of the Finnish Bus and Coach Association by paying membership fees and despite the fact that some of the executives of these bus companies are members of the Finnish Bus and Coach Association’s board of directors. The ne bis in idem principle established in the case law of the Court of Justice of the European Union, which prevents the double criminalisation of parties who violate competition law, was therefore not deemed to apply in this case.

Finnish Competition Act, sections 3, 5, 6, 12, 13 and 38

Finnish Administrative Judicial Procedure Act, sections 37 and 39

Finnish Administrative Procedure Act, sections 31(1), 34(1), 44(3) and 45(1)

Finnish Public Transport Act (869/2009), sections 2(2), 2(4), 22, 27 and 62

Treaty on the Functioning of the European Union (TFEU), Articles 101(1) and 107(1)

European Convention on Human Rights, Article 6(1)

Charter of Fundamental Rights of the European Union, Articles 47(1), 48(1), 51(1) and 52(3)

Regulation (EC) No 1370/2007 of the European Parliament and of the Council of 23 October 2007 on public passenger transport services by rail and by road and repealing Council Regulations (EEC) Nos 1191/69 and 1107/70, Articles 1(1)(2), 3(1), 5 and 8(2)

Rulings of the European Court of Human Rights

Judgment of 6 November 2018 of the Grand Chamber in the case of Ramos Nunes de Carvalho e Sá v. Portugal

Judgment of 3 April 2014 in the case of Grande Stevens and Others v. Italy

Judgment of 14 February 2019 in the case of SA Capital Oy v. Finland

Judgment of 15 November 2016 of the Grand Chamber in the case of A and B v. Norway

Judgment of 19 February 1998 in the case of Jacobsson v. Sweden

Rulings of the Court of Justice of the European Union

Judgment of 15 May 2019 in case C-706/17 – Achema (EU:C:2019:407, paragraph 53)

Judgment of 14 September 2010 in case C-550/07 P – Akzo Nobel Chemicals and Akcros Chemicals v. European Commission (EU:C:2010:512, paragraphs 40 and 41)

Judgment of 18 May 1982 in case C-155/79 – AM & Europe Limited v. European Commission (EU:C:1982:157, paragraph 23)

Judgment of 17 September 2009 in cases T-125/03 and T-253/03 – Akzo Nobel Chemicals and Akcros Chemicals v. European Commission (EU:C:2007:287, paragraph 117)

Judgment of 26 September 2018 in case C-99/17 P – Infineon Technologies v. European Commission (EU:C:2018:773, paragraphs 138, 139, 195, 196 and 197)

Judgment of 20 January 2016 in case C-373/14 P – Toshiba Corporation v. European Commission (EU:C:2016:26, paragraphs 25, 26, 28, 29, 94 and 97)

Judgment of 7 February 2013 in case C-68/12 – Slovenská sporiteľňa (EU:C:2013:71, paragraph 17)

Judgment of 23 January 2018 in case C-179/16 – Hoffmann-La Roche and Others (EU:C:2018:25, paragraph 78)

Judgment of 14 March 2013 in case C-32/11 – Allianz Hungária Biztosító and Others (EU:C:2013:160, paragraph 35)

Judgment of 27 April 2017 in case C-469/15 P – FSL Holdings (EU:C:2017:308, paragraph 107)

Judgment of 5 December 2013 in case C-449/11 P – Solvay Solexis (EU:C:2013:802, paragraph 82)

Judgment of 4 September 2014 in case C-408/12 P – YKK and Others v. European Commission (EU:C:2014:2153, paragraphs 26, 84 and 85)

Judgment of 11 September 2014 in case C-67/13 P – CB v. European Commission (EU:C:2014:2204, paragraph 49)

Judgment of 14 October 2010 in case C-280/08 P – Deutsche Telekom v. European Commission (EU:C:2010:603, paragraph 80)

Judgment of 4 September 2014 in case C-184/13 – API (EU:C:2014:2147, paragraph 55)

Judgment of 23 March 2006 in case C-237/04 – Enirisorse (EU:C:2006:197, paragraphs 38 and 39)

Judgment of 21 September 2006 in the case of JCB Service v. European Commission (EU:C:2006:594, paragraph 187)

Judgment of 26 January 2017 in case C-637/13 P – Laufen Austria v. European Commission (EU:C:2017:51, paragraphs 61, 69 and 70)

Judgment of 27 January 2017 in case C-618/13 P – Zucchetti Rubinetteria (EU:C:2017:48, paragraph 38)

Judgment of 25 June 2010 in case T-66/01 – Imperial Chemical Industries v. European Commission (EU:T:2010:255, paragraph 443)

Judgment of 3 April 2019 in case C-617/17 – Powszechny Zakład Ubezpieczeń na Życie (EU:C:2019:283, paragraphs 28 and 29)

Judgment of 18 December 2008 in case C-101/07 P – Coop de France Bétail et Viande v. European Commission (EU:C:2008:741, paragraphs 120 and 130)

 
Published 20.8.2019