Supreme Court rules in favour of the Norwegian Competition Authority in taxi case

In a judgment of 22 June 2017, received by the Authority yesterday, the Norwegian Supreme Court has dismissed an appeal from two taxi companies against a ruling of the Court of Appeal, which upheld a decision by the Norwegian Competition Authority concerning the submission of joint bids in tender procedures.

In its decision, the Authority had concluded that the two taxi companies were actual or potential competitors and that the submission of joint bids constituted restrictions of competition by object that infringed the Norwegian Competition Act. The purpose of the tender procedures, organised by Oslo University Hospital, was to conclude framework agreements for the provision of patient transport services for the South-Eastern Norway Regional Health Authority.

– We welcome the Supreme Court ruling, which confirms that the submission of joint bids in a tender procedure where the operators concerned could have submitted separate bids amounts to an infringement of the Competition Act, says Director General Lars Sørgard.

An issue of principal
The judgment concern an issue of principle for the enforcement of the competition law: whether co-operation between competitors which takes place openly vis-à-vis the procuring authority can constitute a restriction “by object” in violation of Section 10 of the Competition Act.

– We are pleased that the Supreme Court agrees with the Competition Authority that there is an infringement by object in this case as held in the Authority’s decision. The fact that the co-operation took place openly does not alter the fact that the co-operation was harmful to competition, says Legal Director Karin Stakkestad Laastad.

The judgment also makes clear that possible efficiencies resulting from such co-operation must be assessed under Section 10, third paragraph, of the Competition Act as maintained by the Authority in its decision.

Oslo University Hospital contacted the Authority
Oslo University Hospital contacted the Competition Authority about this case. The hospital reacted to what appeared a high price level and considered that prices in the area concerned by the co-operation were considerably higher than in other areas. It is important that procurers are attentive and inform the Authority about suspected practices. The Authority commends the hospital for its alertness.

– Procuring authorities can often discover possible illicit practices if they are attentive and recognises typical warning signs. This is exactly what the University Hospital did in this case, says Karin Stakkestad Laastad.

Portrettbilde av konkurransedirektør Lars Sørgard.
Lars Sørgard, konkurransedirektør.