Transdev filed a complaint before the French Competition Authority against SNCF, which it accused of several exclusionary practices against its competitors in the passenger coach transport market, recently opened to competition by the Macron law of August 2015.
It notably criticized SNCF for abusing its dominant position by (i) subsidizing its coach activity thanks to the resources from its monopoly in railway activity, (ii) practicing predatory pricing, (iii) making Ouibus benefit from SNCF’s reputation and brand image, and (iv) coupling its railway offer with its coach offer.
In its decision of June 1, 2017, the French Competition Authority rejected the referral on the merits as well as Transdev’s claim for conservatory measures.
The Authority first found that Ouibus is not dominant on this market, where it is still preceded by the market leader, Flexibus. Any abuse of a dominant position committed by Ouibus is therefore excluded. It then searched whether SNCF had committed abuses in this coach market via its monopoly position on the railway market.
By analyzing the contested practices, the Authority considered that they did not constitute a plan aimed at eliminating competition and did not have such effects, whether real or potential. In particular, the remote profitability prospects did not remove all economic rationality. To do so, the Authority considered that a 5-year horizon to generate profits and 10 to 12 years to compensate the initial losses was acceptable, without constituting an exclusionary practice of competitors thanks to the means of the SNCF group from which its subsidiary Ouibus benefits.
It is also not established that the reputation of the SNCF brand confers a sufficient competitive advantage to distort competition, or that the prices practices are predatory. In particular, the Authority recalls that use of the brand image and reputation of an historic operator is not an abuse in itself unless it leads to maintaining the confusion between a public service activity and an activity recently open to competition, so as to amplify an advantage that other market players cannot reproduce. In this case, although the Ouibus brand does reproduce the prefix Oui, already used by SNCF, the applicant was unable to demonstrate that this practice would have mislead consumers on the competitive nature of the Ouibus offer.