Commercial Cooperation Amongst Competitors: The Webtaxi Decision Of The Competition Council Of 8 June 2018

On 8 June, the Luxembourg Competition Council exempted an agreement between Benelux Taxis, Inter-Taxis and other Taxi companies who jointly use the Webtaxi reservation centre for taking bookings from customers. It is the Competition Council's first decision exempting an agreement or practice restricting competition between competitors from the prohibition on anticompetitive agreements. It is all the more remarkable since the cooperation involved price fixing, which is a very serious per se restriction of competition law and can result in large fines. The Council cleared the cooperation because it considered that it was justified, creating more advantages than disadvantages for consumers and competition in general.

This decision is of interest to economic operators in all sectors, given the broad scope of the competition rules. The purpose of this newsflash is therefore to draw practical lessons to be learned from the decision (III) after a brief summary (I and II).

1. The services performed by Webtaxi

   Customers can contact Webtaxi by phone, via the website or mobile application. Using a GPSR application, Webtaxi assigns the taxi closest to the customer's pick-up location. All drivers of the taxi companies using the Webtaxi reservation centre may be called upon, not just those driving under the Webtaxi name.

   When booking a trip, the reservation centre determines the price via an algorithm. Based on pre-determined variables (price per kilometre, coverage, length of trip, traffic conditions), this price is non-negotiable and is binding on both the customer and the driver.  

2. The Council Decision

   Following a complaint by a competitor and an investigation concerning the services provided by ProCab, now Webtaxi, to taxi companies the Council first established the existence of a price-fixing agreement between competitors, which is normally presumed anticompetitive and prohibited by Article 3 of the Luxembourg Competition Act. Highlighting that there is no absolute prohibition on agreements between undertakings, the Council then examined whether or not the agreement in question qualified for an individual exemption under section 4 of the Act permitting agreements which are overall pro-competitive.

   In this respect, the Council assessed whether the agreement satisfied the four conditions for the exemption to be met. Having considered that the agreement provided efficiency gains (reduction of empty runs, waiting time) and benefits for consumers...