Finnish Competition Authority proposes infringement fine to Hairdressers’ Association

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The Finnish Competition Authority (FCA) has proposed to the Market Court that it impose an infringement fine of EUR 33,000 on the Finnish Hairdressers’ Association for price-fixing cooperation during the period from 2000 to 2006.
      According to the FCA, the association’s objective has been to affect competition in the field and to increase the tariffs of members.
      In the FCA’s view, the recommendations also aimed at harmonising the amount and time of the rate increases.
      The proposed fine of EUR 33,000 is nearly 10 % of the annual turnover of the Hairdressers’ Association.
     
According to the FCA, the recommendations on pricing have caused "considerable losses" to consumers, even if they did not lead to any large increases in rates. The FCA also talks of "income transfers" from clients to barbers and hairdressers.
      There are about 10,000 barber-hairdresser salons in Finland, and the total value of their services is around EUR 360 million annually.
      Director Kirsi Leivo, the Head of the FCA’s Cartels Unit, reports that the Hairdressers’ Association has mailed both member communiques and press releases, encouraging their members to increase their rates.
      In its statements, the Association has recommended for example: "The increased costs are to be passed on to the rates", or "The barbers and hairdressers’ rates will go up by 2 to 2.5 % from the beginning of May".
     
The Finnish Hairdressers’ Association argues that the recommendations have been based on the increased costs in the branch.
      "The guidance of our members is part of our statutory operations. We see to it that the enterprises are able to pay salaries", reports Arja Laurila, the President of the Finnish Hairdressers’ Association.
      However, the FCA’s Kirsi Leivo claims that the rate increase recommendations have generally been higher than the concurrent raises in salaries at barber's shops and salons.
      Moreover, the recommendations have also exceeded the consumer price index.
      Arja Laurila finds it unfair that the Association is accused of running a cartel, saying that the majority of their members do not have any commercial education, and hence they are in need of financial advice from their own trade association.
     
Kirsi Leivo reports further that the FCA decided to propose an infringement fine to the association alone, as it was not possible to identify those specific enterprises that had been involved.


Links:
  Finnish Competition Authority

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