Press release -

The Joint Court of Justice recently ruled in an appeal case brought by a taxi association against a fine imposed by the FTAC for non-cooperation with FTAC oversight.

What Was the Case About? 

In 2020, the FTAC received reports of possible price-fixing in the markets for tourist tours and taxi services. Price-fixing among competitors is always prohibited under the cartel ban because it invariably restricts competition and disadvantages consumers. In response to these reports, the FTAC requested information from all taxi associations and tour companies. One association consistently refused to cooperate with the FTAC. As a result, the FTAC imposed a fine on this association in 2021. On September 28, 2023, the Court of First Instance confirmed that the FTAC had rightly imposed the fine, and this decision was recently upheld by the highest court.

Why is Cooperation Required? 

For the FTAC to effectively monitor market functioning as a competition authority, it needs information on relevant market developments. The FTAC can only carry out its oversight effectively if businesses and individuals cooperate with investigations. The primary and least intrusive authority of the FTAC to obtain necessary information is by asking questions to relevant market players. The FTAC does this through what is called an information request. An information request is the legal instrument to ensure that regulators like the FTAC obtain necessary and truthful information. This information allows FTAC investigators to properly fulfill the oversight duties assigned to the FTAC under the Competition Ordinance, acting in the interest of consumers.

To ensure the effectiveness of the information request tool, the legislator included a cooperation requirement for everyone in the Competition Ordinance. This means that both individuals and legal entities are obligated to answer FTAC’s questions fully and truthfully and to provide access to documents upon request. Naturally, this obligation to cooperate is balanced by legal protections for market participants. The general principles of good governance require the FTAC to observe principles of due diligence and proportionality when exercising its oversight powers. The infringement on individual interests should never be greater than necessary to achieve the intended goal.

Penalizing Non-Cooperation 

Without cooperation, oversight is impossible. The obligation to cooperate is therefore a cornerstone of the FTAC’s operations. This obligation to cooperate is essentially the mirror image of the FTAC’s supervisory powers. Without this obligation, the FTAC would be powerless as a regulator and unable to effectively address potential violations of the Competition Ordinance.

The cooperation requirement is so important that the legislator included provisions in the Competition Ordinance allowing the FTAC to directly impose fines for violations of this requirement. The fine can amount to up to NAf. 1 million for individuals or 1% of a company’s turnover.

Since its establishment, the FTAC has invested considerable time and energy in educating entrepreneurs about the Competition Ordinance, including the cooperation requirement. The FTAC will continue to act decisively and impose fines on businesses that attempt to evade FTAC oversight by not cooperating. Entrepreneurs must realize that they need to take FTAC’s information requests seriously. The FTAC issues an information request because the requested information is essential for the careful execution of its oversight tasks. These oversight tasks are ultimately aimed at contributing to economic progress and consumer welfare.