The Danish Competition Council finds that a decision by an association of passenger carriers on coordinating the association’s bids is illegal

28. February 2018

On February 28, 2018, The Danish Competition Council (DCC) has found that, the association of passenger carriers Økonomisk Forening for Persontransport (“ØFP”, in English “Economic Association of Passenger Carriers”) has infringed Section 6 of the Danish Competition Act by coordinating its members’ bids on tenders where ØFP placed a bid. The DCC orders the association to end the infringement immediately and in the future refrain from any action having the same or similar object or effect.

After receiving a complaint regarding a tender where ØFP placed a bid and regarding ØFP’s bylaws the Danish Competition and Consumer Authority (“DCCA”) requested various documents from ØFP. The documents show, that ØFP coordinated bids on behalf of its members on tenders where ØFP placed a bid. The documents further show, that ØFP had a bylaw, which prohibited members from competing against ØFP on tenders, where ØFP placed a bid. ØFP coordinated its members’ bids partly by discussing which tenders ØFP should bid on and partly by establishing prices and distribution of routes in ØFP’s bids together with ØFP’s bylaw which prohibited other members from competing on tenders, where ØFP placed a bid.

It does not matter if the members placed a bit in a legal consortium on a specific tender. The mere fact that ØFP in general has coordinated its members’ bid on tenders, where ØFP placed a bid, is sufficient to view the decision as an instrument to reduce competition, as this has changed the members’ incentive to compete with each other on tenders where ØFP was bidding.

The knowledge the members gained through the discussions about ØFP’s bids and ØFP’s bylaws is capable of reducing the competition between the members. With market conditions put out of force the coordination was likely to result in higher prices to the detriment of end users.

Based on the evidence of the case the DCC found, that ØFP coordinated its members’ bids on tenders where ØFP placed a bid and thereby restricted competition within the meaning of Section 6 of the Danish Competition Act.
The DCC ordered the undertakings to end the infringement immediately and to refrain from any action having the same or similar object or effect in the future.

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Read the decision here (in danish, pdf)