This week Finland’s competition regulator published a report demanding 38 million euros in fines for a group of operators in the long-distance bus trade. The Competition Authority’s managing director, Timo Mattila, says that there’s been an upswing in the number of complaints about anti-competitive practices.
"There are many different types of tip-offs, but I have to say that numbers of this type of serious tip have increased considerably," said Mattila.
He says it’s an important issue, and causes significant economic damage to Finland. Consumer prices can be as much as 40 percent higher than they would have been without cartels, and the total cost to the economy of just one cartel is in the hundreds of millions or even as much as a billion euros, according to Mattila.
"We only see the tip of the iceberg," said Mattila. "Internationalism means that it’s not just domestic cartels hinder trade, but also international cartels operate here."
Stronger penalties could act as a deterrent
A well-planned cartel can, according to Mattila, raise prices by 20-40 percent.
Researcher Janne Tukiainen of the Institute for Economic Research (VATT) says that stronger penalties are needed as a deterrent. Not just the company itself but also its senior managers should face criminal punishment, according to Tukiainen.
"The company’s leadership can change before there’s any kind of resolution to the case," says Tukiainen. "The shareholders might also be a completely different group to those that enjoyed the proceeds. The others pick up the tab. The people who decided on these criminal contracts should pay the bill or go to jail."
"If you want a deterrent effect, that people will take notice of, then sure these fines are laughably small," continued Tukiainen. "This is a problem in other countries too."