Bruce, a company that sells training services, shall cease applying exclusive agreements with its fitness studio partners until the Swedish Competition Authority has reached a final decision on whether these agreements are prohibited under the Swedish Competition Act.
This has been decided by the Competition Authority. At the same time, the Competition Authority has launched parallel investigations into whether similar exclusive agreements used by other companies in the industry may be in violation of the Competition Act.
“The negative effects we can see from the current exclusive agreements justify immediate intervention,” says the Competition Authority’s Director-General Rikard Jermsten.
The company Bruce (Im with bruce AB) is a so-called fitness aggregator, which sells membership allowing customers to train at several different training facilities. Bruce operates primarily in Stockholm and Gothenburg. Bruce has no training facilities of its own, but has instead concluded agreements with a number of fitness studios that connect to, and offer consumers training through, Bruce’s aggregated subscription service. Bruce has signed exclusive agreements with some of the fitness studios. The exclusive agreements are designed in such a way that they prevent the studios from signing agreements with other fitness aggregators.
The Competition Authority finds that Bruce’s application of the exclusive agreements is likely to constitute a violation of the competition rules. If a company ties up important suppliers through exclusive agreements and shuts out competitors from buying the suppliers’ goods/services, this can have lasting consequences for competition and the development of a new market that is in an initial stage.
Therefore, there are particular grounds to prohibit Bruce from applying exclusive agreements until the issue of whether the exclusive agreements in question constitute a violation of the Competition Act has finally been resolved.
“It is unusual for the Competition Authority to have to make interim decisions that prohibit action before the investigative work has been completed. This measure highlights the importance of urgent intervention in this case,” says the Competition Authority’s Director-General Rikard Jermsten.
Consumers who have signed up for Bruce’s service are not affected by the Competition Authority’s decision. They can continue to use the service as normal.
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