Competition Authority finds seven Funchal driving schools guilty of price-fixing

​The Competition Authority has found seven Funchal driving schools guilty of fixing the prices of driving lessons for light vehicles between December 2007 and March 2008. Fines totalling EUR 9,865.40 (nine thousand, eight hundred and sixty-five euros and forty cents) have been imposed on the following undertakings:

  1. Escola de Condução Francisco Pereira Lda, which was fined in the amount of EUR 1,911.54 (one thousand nine hundred and eleven euros and fifty-four cents);
  2. Manuel Rodrigues, Lda., which was fined in the amount of EUR 862.19 (eight hundred and sixty-two euros and nineteen cents);
  3. Escola de Condução Infante Lda, which was fined in the amount of EUR 1,826.33 (one thousand eight hundred and twenty-six euros and thirty-three cents;
  4. Escola de Condução do Estreito Lda, which was fined in the amount of EUR 684.07 (six hundred and eighty-four euros and seven cents);
  5. Alfredo Camacho Lda, which was fined in the amount of EUR 1,030.28 (one thousand and thirty euros and twenty-eight cents);
  6. SMTZ – Ensino da Condução Automóvel Lda, which was fined in the amount of EUR 2,731.36 (two thousand, seven hundred and thirty-one euros and thirty-six cents); and
  7. Fernandes Ramos & Nóbrega Lda, which was fined in the amount of EUR 819.64 (eight hundred and nineteen euros and sixty-four cents).

The case began with an anonymous complaint, at the beginning of 2008, reporting a general rise in the prices charged by driving schools in the city of the Funchal for driving lessons relating to Category B (light) vehicles.

In the investigation carried out, the Competition Authority ascertained that, besides the absence of an economically plausible explanation for the simultaneous price rise, there had been contact between the undertakings involved for the purpose of arranging the price increase.

As a result of this contact, the prices of driving lessons for light vehicles in the seven schools mentioned were increased on a concerted basis at two points in time, January 2008 and March 2008, to amounts that were more than double those prevailing in December 2007.

The undertakings involved derived distinct advantages from the agreements in question: they reduced the uncertainty associated with their competitors’ future behaviour in terms of prices, thus altering, with the exchange of information, the competitive conditions of the market regarding the commercial behaviour of each of the participating undertakings; they also had the advantage of the rise in prices, obtaining higher profits, to the detriment of consumers.

The Competition Authority thus ruled that breach of Article 4 of Law No. 18/2003 of 11 June (the Competition Law) had been proved, on the grounds that the said undertakings participated in a concerted practice of which the object and effect was to prevent, distort or restrict competition to an appreciable extent.

In setting the fine in this particular case, the Competition Authority took into consideration the criteria listed in Article 44 of the Competition Law and, in addition, the fact that the case involved small enterprises (in terms of turnover and the number of workers) that operate in a market characterised by insularity, as is the case of the city of Funchal in the Autonomous Region of Madeira.

Any appeal against the Competition Authority’s decision will be heard in Lisbon Commercial Court.

Lisbon, 17 June 2011