French Competition Authority drops charges against car rental companies for exchanging detailed and
- 07/04/2017
- Articles
On 27 February 2017, the French Competition Authority (“FCA”) decided to close a ten-year investigation into information exchanges between car rental companies without imposing any sanction.
The FCA investigated whether information exchanged through airport management authorities facilitated collusion between car rental companies operating at French airports. In particular, twelve French airport management authorities contractually required car rental companies (i.e., Europcar, Avis-Budget, Hertz, Citer, Sixt and Ada) to provide them on a monthly basis with information relating to their turnover, and the number of contracts signed for the purposes of: (i) calculating the fee payable by the rental companies to the airport management authorities for the right to use publicly owned space; and (ii) reallocating available parking spaces. In return, under the contract signed with the airport management authorities or simply in practice, each company received from the authorities the information provided by each of the other car rental companies. In addition, some of the airport management authorities concerned also provided the car rental companies with data on market shares and the average value of contracts which they had calculated (in other cases, the car rental companies could calculate these figures themselves using the turnover and contract numbers communicated by the authorities).
In its decision, applying an effects test, the FCA assessed whether this exchange of information “reduce[d] strategic uncertainty in the market.” The FCA assessment relied on two factors, namely (i) the market structure and (ii) the nature (strategic or not) of the information exchanged. The FCA noted that the car rental market at airport hubs is oligopolistic and is usually limited to the six players under investigation. The FCA then examined the nature of the information exchanged, stating that “it is necessary to determine whether the transmission of the individual turnover and the number of contracts concluded by each of the car rental companies during the previous month was such as to reduce the uncertainty in the market sufficiently so that each company was able to identify the pricing and commercial strategies of its competitors with sufficient precision to adapt its behaviour accordingly”. In this respect, the FCA underlined that the information was exchanged on an aggregated basis to the extent that it did not distinguish between rentals to private individuals and professional customers, which are considered to form two different car rental markets. The FCA also highlighted that there was no evidence establishing that any of the companies under investigation had adapted their behaviour on the market. Accordingly, the FCA concluded that the information exchanged was not strategic and did not impede competition.
The Italian Competition Authority (“ICA”) followed a similar reasoning in a decision dated 30 March 2017. In this case, car rental competitors also exchanged detailed information through a professional association. The ICA concluded that there was no evidence that the information exchanged reduced the uncertainty in the market or otherwise restricted competition.
