Finland’s Top Court Draws Firm Line on Joint Bids in Public Transport Tenders

Key Takeaways

• Joint Bids Can Breach Competition Law: The Supreme Administrative Court confirmed that joint offers between competitors in public transport tenders can constitute unlawful collaboration when companies have a real ability to bid independently.
• Price Competition Was Distorted: The court found that the joint bids in the Turku region were likely to restrict and distort price competition and were aimed at preserving or increasing market shares.
• High Bar for Permissible Cooperation: Joint offers are only allowed in limited circumstances, and companies must be able to demonstrate concrete efficiency benefits that outweigh the harm to competition.
• Burden of Proof Lies with Companies: Firms relying on efficiency justifications must prove that the joint bid benefits both the contracting authority and end consumers.
• Penalties Left Intact: The Supreme Administrative Court upheld the Market Court’s decision, leaving approximately €1.5 million in penalties unchanged for the bus companies involved.

Deep Dive

Finland’s Supreme Administrative Court has clarified the limits of cooperation between competitors in public procurement, ruling that a group of bus companies unlawfully restricted competition by submitting joint offers in public transport tenders in the Turku region.

The court found that the companies engaged in prohibited collaboration under competition law during the Föli public transport tendering processes in 2013, 2014, and 2016. These tenders coincided with the opening of public transport markets to competition in the Turku region.

According to the court, the joint bids were likely to restrict and distort price competition, with the objective of maintaining or increasing the companies’ market shares in regional transport services. The judges concluded that the companies had concrete opportunities to submit independent bids and compete directly against one another, rather than acting jointly.

The ruling marks the most detailed assessment to date by Finland’s highest administrative court on the legality of joint offers between competitors. As a general rule, the court reiterated, competing companies must make independent decisions regarding their competitive conduct. Where firms could have bid independently, they are treated as competitors for the purposes of competition law, even if they choose to submit a joint offer.

The court emphasized that joint offers are permissible only in limited circumstances. Any company considering such cooperation must carry out a careful competition law assessment before participating in a tender. A joint bid may exceptionally be allowed if it can be demonstrated to generate efficiency benefits that outweigh the harm caused by restricting competition, and if those benefits accrue to both the contracting authority and end consumers. The burden of proving such efficiencies rests squarely with the companies involved.

The penalties imposed by the Market Court remain unchanged following the Supreme Administrative Court’s review. The Finnish Competition and Consumer Authority had originally proposed penalties totaling approximately €1.9 million. The Supreme Administrative Court declined to amend that decision, leaving the penalties in place.

The penalties imposed by the Market Court remain unchanged following the Supreme Administrative Court’s review. The Finnish Competition and Consumer Authority

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