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Competition authority demands expanded powers to probe low-cost bus firm takeover

Finland’s competition regulator would like to probe the purchase of budget bus firm Onnibus by a bigger rival, but is not allowed under Finnish law.

Onnibus Mannerheimintie Helsinki
Onnibus Mannerheimintie Helsinki Image: Yle News

The acquisition of low-cost upstart bus firm Onnibus by bigger rival Koiviston Auto cannot be investigated by the competition authority because the two firms' combined value is estimated at below the threshold limit of 350 million euros. 

Following the same Koiviston Auto will have a very large chunk of the market on many routes, and the regulator says it wants the right to launch a probe to look at the impact on consumers.

“The Competition and Consumer Authority (FCCA) needs the right to start investigations at its own initiative into the kind of mergers and acquisitions that may bring problems for consumers,” said the FCCA in a statement. “The deal between Koiviston Auto and is the latest example of an acquisition into which the FCCA currently does not have the mandate to investigate.”

The authority’s deputy director Valtteri Virtanen said that an aggressive competitor such as Onnibus often has an outsize impact on consumer experience.

“The other perspective is that a competitor like Onnibus has been aggressive in price competition and an active operator,” said Virtanen. “Often from our perspective these kinds of companies who bring aggressive competition can be more significant in terms of competition than their size would suggest. The disappearance of companies like that can have greater significance than less active operators.”

Passengers save with price competition

Virtanen emphasises that he is not taking a position on whether the Onnibus deal is problematic from a competition perspective.

“We would hope that our mandate would be such that we could for example investigate a takeover like this,” said Virtanen. “I am not taking a view on whether this particular deal is problematic, but right now it can’t even be looked at.”

Koivison Auto boss Antti Norrlin said yesterday that passengers need not fear price changes as the Onnibus philosophy of dynamic and aggressive pricing was exactly why his firm had launched the takeover.

From the two firms’ timetables it is evident that on many routes there are few options other than Onnibus or Koivisto. Helsinki-Pori has only a few services run by the small PoriExpress firm in addition to the two bigger outfits. From Pori to Tampere and Pori to Vaasa there are no other options at all.

Between Helsinki and Jyväskylä there are a few services run by Savonlinja in addition to those operated by Koivisto and Onnibus, and Kuopio-Helsinki passengers are also left with few other options from Pohjolan Matkat, the other operator on that route.

The price of the deal to buy Onnibus has not been publicly revealed, but business daily Kauppalehti estimates the price tag at between 30 and 40 million euros.

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