Competition authority proposed €300,000 fine to driving schools for agreeing price rises

The Finnish Competition and Consumer Authority (KKV, by its Finnish acronym), proposes the Market Court to impose fines totaling 300,000 euros for the Uusimaa Driving Association (Autokouluyhdistys ry) and for eight driving schools in the area of Uusimaa (around Helsinki).

The Competition authority explains that the reason for the sanctions is that the investigated association and schools operated as a cartel, limiting free competition by encouraging price increases for customers who wanted to get their Type B driver's license. However, the ultimate decision on the fines will be made by the Market Court.

According to KKV findings, in 2013 the Uusimaa Driving School Association and the driving schools represented on the board of the association recommended other schools operating in Helsinki region an increase in the price of B-driving licence education. The B-licence is the basic one, which allows people to drive a common passenger car.

But the bad practices did not end there. In addition to that, in autumn 2014 the managers of two new driving schools opened in Porvoo were "advised" to raise their prices by 300-400 euros -much more than the market imposed-, so that the previously existing schools did not have to lower theirs in order to compete. Those recommendations for price increases were presented at regional discussion and training events organized by the association, says KKV.

"Deceiving consumers"

In its statement, the Finnish Competition authority remarks that competing companies cannot discuss or agree on raising prices together. In fact, recommending and negotiating prices are considered "very serious restrictions of competition". Normally they end up in price increases for the detriment of consumers.

Kirsi Leivo, General Director of KKV, was blunt: "Companies must not agree or discuss price increases and their trade association shall not recommend price increases. Agreeing on prices means deceiving consumers."

The chair of the Association Helen Högström told Yle that she was not yet in a position to comment on the sanctions proposed by the Competition authority, though she said they have a very different opinion: "We will digest this and consider further action. Of course, we should also give the Market Court peace to work."

The proposed fines are the following:

If you want to consult the information released (in Finnish) by the Competition authority, you can find it HERE