STUDENT AGENCY fined for abuse of dominant position
3 Nov 2010
In its first instance decision of 3 November 2011 the Office for the Protection of Competition imposed a fine of CZK 6,185,000 on STUDENT AGENCY, s.r.o. for violation of the Act on the Protection of Competition.
The decision is not in force, because the competitor has filed the appeal.
The sanctioned undertaking abused its dominant position in the market with provision of public passenger bus transportation from Prague to Brno and back with the intention to exclude ASIANA, spol. s r.o. from the mentioned market.
Between 1 December 2007 and 1 March 2008 STUDENT AGENCY applied unreasonably low prices (predatory prices); reducing the price for one way credit tickets to CZK 50, later to CZK 95, for all respective competing lines with the aim to exclude ASIANA from the mentioned bus line. Following the withdrawal of its competitor, STUDENT AGENCY increased the fare above the price charged prior to the initiation of competition. Such conduct resulted in distortion of competition causing harm to company ASIANA and consumers in consequence.
For example, the email correspondence of the STUDENT AGENCY management provided by the Office shows the intention of STUDENT AGENCY to exclude ASIANA from the relevant market. The company also adapted its business policy to this object. The prices for the credit tickets charged by STUDENT AGENCY for the transport from Prague to Brno and back in case of the competing lines in the monitored period were according to the findings of the Office lower than average monthly overall costs of one transported passenger on this line. Prices below costs thus meant a temporary loss for the company. The competitor was not able to confront the intensive pressure and withdrew from the market.
In factual definition of the relevant market in the case under consideration the Office documented by means of economic analyses that railway transportation between Prague and Brno does not fall into the scope of this market.
External Relations Department
10/123/HS035