Supreme Administrative Court evaluates the permissibility of joint offers – bus companies face approximately €1.5 million in penalties for competition restrictions

The Supreme Administrative Court found that bus companies engaged in prohibited collaboration under competition law by submitting joint offers in the public transport procurement processes of the Turku region, specifically in the Föli tendering processes in 2013, 2014, and 2016, when public transport markets were opened to competition.

In its ruling issued in December, the Supreme Administrative Court determined that the submission of joint offers was likely to restrict and distort price competition among the companies, with the aim of maintaining or increasing the companies’ market shares in the Turku region’s transport services. According to the Supreme Administrative Court’s assessment, the bus companies had concrete opportunities to compete independently for the contracts in the tendering processes.

The legality of joint offers has not previously been assessed at the highest judicial level in Finland to this extent.

In general, joint offers between competing companies are prohibited, as each company must independently decide on its competitive behavior. Companies submitting a joint offer are considered competitors in the tendering process if they had the opportunity to submit offers independently.

A competition-restricting joint offer may exceptionally be permitted if it can be demonstrated to produce efficiency benefits that outweigh the harms caused by the restriction of competition, benefiting both the contracting authority and end consumers. The burden of proof for efficiency benefits lies with the company invoking them. The assessment of the legality of joint offers will be discussed in more detail in a blog post and on the KKV Campus online course.

Penalties imposed by the Market Court’s remain unchanged

The Finnish Competition and Consumer Authority proposed penalties of approximately €1.9 million for the bus companies for the prohibited joint offers. The Market Court imposed a total of €1,535,000 in penalties at the end of 2023 on Jalon Liikenne Oy, Linjaliikenne Muurinen Oy (now Kunnon Kuskit Oy), Linjaliikenne Nyholm Oy, Savonlinja Oy, Turun Citybus Oy (now No Wheels Oy), and the joint venture LS-Liikennelinjat Oy, owned by some of these companies.

The Supreme Administrative Court did not alter the Market Court’s decision, and the penalties imposed by the Market Court on the companies remained unchanged.