Municipal bus company runs a prohibited contracted travel service

Press release

The Swedish Competition Authority is bringing proceedings against the municipal company Skelleftebuss as the presence of this company in the market has impeded other bus companies from operating and expanding in the contracted transport market. The Swedish Competition Authority considers that Skelleftebuss, as it is a municipal bus company, has gone beyond the ambit of its powers.

This is the second time within a short time-frame that the Swedish Competition Authority is going to court to stop a publicly run operation that is restricting competition for independent companies. A summons application was recently submitted in respect of the local association Dala-Mitt Rescue Services, which refused a competitor access to a rescue training area. According to a rule introduced into the Competition Act in 2010, activities that restrict competition may be prohibited by a court upon the action of the Swedish Competition Authority.

“According to the Act, municipal undertakings must not act in a way that restricts competition for independent companies. It is not the function of a municipal authority to render competition ineffective and kick the legs out from under private businesses. It is typically small and medium-sized enterprises that are affected, which is particularly problematic as they form the backbone of our growth,” says Dan Sjöblom, Director-General of the Swedish Competition Authority.

The contract transport services operation for private customers conducted by Skellefteåbuss is prohibited by the Competition Act because it impedes the development of effective competition. The activity lies outside the competence of a municipal authority and can therefore be prohibited. Skelleftebuss has just over one hundred buses at its disposal. Most are used for regular services within the ambit of local government powers, but four buses are primarily used for contracted transport services. The contracting operation competes with independent companies in the market.

The Swedish Competition Authority has now submitted a summons application to Stockholm City Court demanding that the court should decide that Skelleftebuss be prohibited from conducting contracted transport services with any other purchaser than the Municipality of Skellefteå.

Since the tightening up of the Competition Act last year, the Swedish Competition Authority has received information about a number of cases where local and central government authorities are conducting sales activities in a way that may be suspected of distorting or impeding competition and having an adverse effect on independent companies. In several cases public and municipal authorities have altered their conduct of their own accord.

“Local or central government authorities should not be instrumental in impairing competition. Public stakeholders are responsible for ensuring that competition is not rendered ineffective by the operations they run. This is why we are now taking this step and going to court to put an end to the contracted transport services that Skelleftebuss provides for private customers,” says Dan Sjöblom.

For further information, contact:
Jimmy Dominius, Press Officer, tel. +46 (0)8-700 15 80, or +46- (0)76-542 15 80
Carl-Henrik Bergh, Case Officer, tel. +46 (0)8-700 15 91
Hanna Lekås, Legal Counsellor, tel. +46 (0)8-700 16 84

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