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22 April 2010
In March 2010 the Oslo District Court passed a judgment upholding the Competition Authority's administrative fine of NKr400,000 (approximately €50,000) against a trade association for bus charter operators. The verdict is a reminder that not only individual undertakings, but also trade associations are subject to competition law prohibitions. The district court also decided to apply the penal burden of proof for administrative fines.
A Norwegian trade association for bus charter operators had encouraged its members to increase their prices in, among other things, a member newsletter and a trade association meeting. The trade association had also prepared and distributed a model for calculating prices for bus chartering services. Certain elements of the model were filled out in advance, such as the price per kilometre and the prices for waiting periods, overnight services and daily driver allowances.
The fine may not seem substantial, but given that it represented double the annual turnover of the trade association, which was partly run in some members' spare time, it had a significant effect on the association. This in part contributed to the court's decision to apply the penal standard of proof in this case, despite the authority having argued that administrative fines should follow the civil standard of proof. The standard of proof for administrative fines has been debated in Norwegian competition law, with reference to Article 6 of the European Convention on Human Rights, and as such this verdict is of general interest for all cases involving administrative fines.
The case also concerned the issue of when and how a decision is taken by a trade association. The trade association tried, without success, to argue that the statements and actions in question represented private opinions and actions of its chairman and the editor of its newsletter, and were not put forward on behalf of the trade association. It further argued that any restriction on competition had no appreciable effect, as the members of the trade association had a market share on a national basis of as little as 4% (although in some regions of Norway their market share was as high as 20%). This line of argument was rejected by the court, which described the matter as a serious infringement of competition law and refused to apply the notice on agreements of major importance to the case, referring to the fact that the measures in question had as their object the reduction of price competition in the market.
The judgment is still open for appeal.
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