On 7 July 2008, the Competition Council fined the Belgian Federation of professional driving schools (the Federation) € 6990 for infringement of the cartel prohibition by having discouraged its members to actively compete on prices and by the distribution of cost price studies resulting in price harmonisation.
The investigation was launched further to complaints by the consumer organisation “Test Achats” and the Institut Supérieur de Conduite and only concerned the price of driving lessons for obtaining a class B driving license (transport of up to 8 persons or goods up to 3,5 tons). Although the Council left the market definition open in this case, it indicated that, based on its previous case law, even if the market on which the association’s members are active is considered to be local, the impact of the association’s behaviour itself could extend to the entire Belgian territory.
The Council first analysed the Federation’s rules of procedure and held, in relation to price setting and competition amongst members, that Article 12 infringed the cartel prohibition. This Article stipulated that it was forbidden to aggressively attack other members in the market and to engage in “price destabilising practices”, which were defined as the application of abnormal prices clearly lower than average prices with an aim to attract customers of neighbouring driving schools. The Council also pointed out the enforcement mechanisms in case of non respect of the rules of procedure and the fact that in its regular publications the Federation drew the members’ attention to the fact that there would be no way back once price wars amongst members started.
With regard to yearly published studies concerning the cost price evolution of driving lessons, the Council first recalled that it is not forbidden for a trade association to provide its members with information in relation to the evolution of the market and to help them to run their business as long as there is no aim to directly or indirectly restrict competition. The Council then held that the driving lesson cost price evolution studies, which were accompanied by concrete advice on how this evolution should impact price setting by driving schools for the following year, did not have the sole aim of merely informing its members about cost evolution but rather the aim of stimulating and harmonising price increases. Furthermore, the Council concluded that the Federation had tried to replace the formerly regulated price (the price of driving lessons was liberalised in 1994) by a price harmonisation and coordinated increases.
Finally, the Council held that it could only fine the Federation for the restriction contained in its rules of procedure as the infringement in relation to cost price evolution studies had stopped in 2005 and the applicable Competition Act of 1999 (which was replaced in 2006) did not foresee the possibility to impose fines on trade associations. Given the existence of exceptional circumstances such as the long duration of the investigation, the fact that the number of the Federation’s members had significantly decreased over the last years and the Federation’s immediate modification of its rules of procedure upon receipt of the statement of objections in 2007, the Council ruled that a basic amount based on a certain percentage of the trade association’s turnover (without taking into account the duration of the infringement) would have a sufficient deterrent effect.