The Act on Transport services must promote the creation of new services

Mobile applications through which various transportation and mobility services can be received in return for payment are currently being marketed to consumers. The integrated mobility services offered through the app can include the use of public transport, taxis, carsharing, car rentals and city bikes. The service application Whim, offered to consumers via mobile phones by MaaS Global Oy, is one example of such service packages.

For companies offering integrated mobility services, being able to reach agreements with reasonable terms with transport services companies is very important. Public transport tickets form a key part of the service. Therefore, it is essential that companies providing integrated mobility services reach an agreement on the brokering of tickets to consumers through the app. Technically, this is achieved by the public transport ticket provider giving the provider of integrated mobility services access to their system through the open sales interface built into their ticket and payment system and selling tickets to be brokered to customers through the app.

Issues related to competition arise in situations where the administrator of the public transport ticket system and the ticket seller hold a monopoly in their area. In these situations, the integrated mobility services provider is dependent on the tickets sold by the company holding the monopoly, and it has no access to alternative ticket products or providers. Companies in monopoly position can choose their ticket brokers and sales method without the pressure of competition and determine the prices and terms and conditions of the tickets to be brokered.

The Act on Transport Services, which entered into force in the beginning of 2018, aims to enable the provision of integrated mobility services to consumers. The Act obligates administrators of public transport ticket systems to offer tickets to providers of integrated mobility services through an open sales interface built into their system. It must be possible to use the interface using generally applied technology and tickets must be sold to the users of the interface on fair, reasonable and non-discriminatory terms. Finnish Transport Safety Agency (Trafi) monitors compliance with the Act on Transport Services.

In September 2018, Trafi gave a decision in which it outlined its own powers and the conditions for meeting the requirements of the open interface.[1] The decision stresses the importance of effective cooperation and that the solutions for opening the interfaces must be technologically independent so that the interfaces can be used for as many purposes as possible. The decision concerned the public transport ticket sales interface of the Helsinki Regional Transport Authority (HSL).

In its assessment, Trafi stated that the interface opened by HSL did not use generally applied technology and did not meet requirements of the Act on Transport Services. Trafi ordered HSL to develop its interface solution so that it would not create unnecessary barriers to offering integrated mobility services. Trafi deemed that HSL must also take into account the views of the interface’s users—such as MaaS Global, who already cooperates with HSL—when developing the solution.

Trafi also outlined its own powers related to the assessment of the interface’s terms and conditions of use. MaaS Global had claimed that HSL’s policy of not paying sales commission for tickets brokered through the interface was unreasonable and discriminatory, as HSL paid sales commission for tickets brokered at physical locations.

Trafi did not investigate the discrimination claim as it deemed that its powers only apply to assessing whether the terms and conditions for different users of the interface were reasonable and non-discriminatory in relation to each other. Assessing whether these terms and conditions were reasonable and non-discriminatory in relation to brokers that do not offer tickets through the interface was not considered to be within Trafi’s jurisdiction. Trafi also judged that assessing the contractual arrangements according to which HSL offered MaaS Global tickets through an interface other than the open interface was outside its jurisdiction.

Trafi’s decision demonstrates that certain kinds of matters related to the provision of integrated mobility services—such as those concerning the technological requirements of the ticket system open interface and the requirement of non-discrimination between the users of the open interface—can be resolved on the basis of the Act on Transport Services. Opening the interfaces can therefore be performed as the Act intended.

However, some legal issues still remain that cannot, according to Trafi’s interpretation, be resolved based on the Act on Transport Services. It appears that the Act on Transport Services does not offer solutions for situations in which a public transport monopoly sells tickets under unreasonable conditions through an interface other than its open interface or in which it treats those brokering tickets through the interface differently from those brokering tickets by other means. General competition legislation would better apply to these matters, and the competent authority in Finland for issues such as these would be the Finnish Competition and Consumer Authority (KKV).

The discriminatory or unreasonable pricing of the public transport ticket sales interface could be investigated under the competition legislation as suspected abuse of market dominance or acting in breach of the competition neutrality regulations. The provider of integrated mobility services would therefore be required to start two different processes to have the discriminatory treatment they have experienced investigated by the authorities. This would delay and complicate the creation for the market for new integrated mobility services and its opening up to competition and would admittedly go against the general aims of the Act on Transport Services.

It would be recommendable that all the authorities would use all the opportunities they have in applying the Act to open interfaces and set reasonable terms and conditions of use. This is because, in rapidly evolving markets, amending the Act on Transport Services or starting processes under competition legislation are a slow way to make the interfaces open in a genuine way. If the Act’s aims of opening interfaces and promoting new services cannot be achieved in practice, Finland will lose its chance of being a pioneer of smart mobility services.

[1] https://www.trafi.fi/trafi/ajankohtaista/6469/liikennedatan_rajapintojen_avaamisessa_yhteistyo_avainasemassa

 

Author
Maarika Joutsimo
Senior Advisor
HPP Attorneys

Ms. Joutsimo specialises in competition and EU law. She has extensive experience in different assignments pertaining to competition law and the communications and financial markets sector.

Before she was employed by HPP, Maarika worked as a Research Officer, Senior Research Officer and Head of Research at the Finnish Competition Authority, as an EU trainee at the Ministry of Social Affairs and Health, and as an EU-EEA specialist at Ilmarinen Mutual Pension Insurance Company.

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