This month, the Swedish Competition Authority (Konkurrensverket) announced that the initial investigation that it had opened against Finnair, which was opened because of a potential restriction of competition in the air fares market, has now been closed (2020-2023), as a result of Finnair bringing their practice into line with competition law. If the commitment by Finnair is not fulfilled for the next five years, Finnair will be fine 100m SEK (€8.6m).
The opening of the investigation occurred in 2020, following a receipt by the Authority of a complaint from Svenska Resebranschföreningen (SRF), which had alleged that Finnair were prohibited online travel agencies from promoting discounted prices for Finnair tickets on the internet, in particular, on price comparison sites. Furthermore, it was argued that if online travel agencies did not comply with the terms set by Finnair, their right to sell air fares on Finnair would be revoked. This was a case of vertical price control in a contractual situation.
In the investigation by the Authority, it found that Finnair had indeed limited the ability of online travel agencies from offering discounted air fares for Finnair tickets, it noted that whilst online travel agencies were not in themselves prevented from charging a lower price than the price for which Finnair made the ticket available, or from advertising a discount, but they were not allowed to advertise a total price with the discount deducted. For the Authority, it took the view that, because of this, which was ‘of great importance when marketing on price comparison sites’, meant anti-competitive behaviour was seen.
In order to come to an arrangement that satisfied the Authority, Finnair proposed that it would undertake to remove the previous requirement that it’s stated price for air fares must be displayed separately from online travel agencies possible discounts, and the removal would apply for five years. The Authority accepted this, and is of the view that with the commitment undertaken by Finnair, travellers can therefore get an offer from online travel agencies at a price that is lower than Finnair’s price.
It is yet to be seen whether the change of practice by Finnair applies only to journeys commenced in Sweden to Helsinki, and Sweden to another destination via Finland; or whether it applies to all Finnair journeys commencing in Finland, or other states connecting elsewhere via Finland.
The decision of the Swedish Competition Authority (Konkurrensverket) in its investigation against Finnair can be read here.