Driving schools price fixing cartel

The Croatian Competition Agency (CCA) established that fourteen driving schools in Split area have concluded a prohibited cartel agreement. The total fine for the infringement imposed by the CCA is HRK 465.000.

The CCA found that fourteen driving schools colluded on the increase of the price of the category B licence driver training. The prohibited agreement started to apply on 1 January 2018. The CCA followed the comments made by the representatives of the driving schools in the media that were sufficient for the CCA to open the case and carry out surprise inspections on the business premises of the driving schools where it collected evidence on the operation of this price fixing agreement.

In the course of the proceeding the CCA collected substantial evidence on the existence of the cartel, based on the comments made by the representatives and employees of the driving schools in the media, the collected information, documents and records and the statements received from the representatives of the driving schools. Most significant evidence that was detected by the forensic experts of the CCA was found in the communication between the driving schools on WhatsApp massaging platform.

Concretely, the CCA investigators found the messages exchanged between the representatives of fourteen driving schools in two WhatsApp groups. The communication undoubtedly referred to the agreement on the increase of the price of the category B licence driver training between the driving schools concerned that had existed even before the WhatsApp groups were created. The WhatsApp groups were the platform for further agreements and meetings of the driving schools that encouraged the collusive behaviour providing support and promoting perseverance to its members in the application of the new price lists and advising them not to yield to pressure from the candidates or the media that insisted on lower prices.

One of the features of a cartel is the ability of its participants to control whether all members of the cartel comply with the agreement. In this concrete case the evidence showed that single participants of the cartel asked all its members to communicate and exchange the new price lists in the WhatsApp group. The exchange of the pricing data enabled them to control whether all the participants hold on to the agreement.

All driving schools against which the infringement proceeding was initiated started to apply the new, increased prices on 1 January 2018. In order to create an impression of competition, aware of their illegal behaviour, the driving schools did not publish the new price lists simultaneously but in a time span of a couple of days. For the same reason, the prices of individual driving schools were not identical but differed slightly.

In setting the fines the CCA took into account the gravity, scope and duration of the infringement and the established extenuating and aggravating circumstances of the case. CCA notes that where an undertaking is active on several markets, the amount of the fine was established in a percentage turnover realized by the undertaking concerned exclusively in the relevant market at issue and not taking into account the total turnover.

By applying the afore mentioned criteria the CCA fined Auto škola Bruno HRK 25,000, Auto škola Dalmacija HRK 60,000, Auto škola Golf HRK 30,000, Auto škola Hajduk HRK 50,000, Auto škola  Princ HRK 10,000, undertaking Croatia Start HRK 50,000, undertaking Instruktor HRK 30,000, undertaking Kružni tok HRK 50,000, undertaking Sprint HRK 10,000, undertaking Telefax HRK 50,000, undertaking Bul HRK 30,000, undertaking Sušić HRK 10,000, undertaking Classic – R HRK 10,000 and undertaking Semafor HRK 50.000

It is the view of the CCA that the fines will have a deterrent effect not only on the undertakings that have been imposed these sanctions but also a general deterrent effect on other undertakings that once again have been discouraged from engaging in infringements of competition rules.