23. februar 2005
Journal nr. 3/1120-0100-0865/SEK/cf
The Council meeting 23th February
On the 23. February 2005 the Danish Competition Council resolved that the Transport business’ Education Council (Transporterhvervets Uddannelsesråd TUR) has received unauthorised public aid that distorts competition, and has ordered it to be cancelled according to section 11 a of the Danish Competition Act. The aid consists of exclusive free access to publish material for education proposals developed by TUR but belonging to the Ministry of Education. The Authority ruled that if all interested parties are given access to the material on equal grounds within a period of 3 months, then the unauthorised aid to TUR will be considered as having stopped and there will be no reason to demand a refund.
TUR is one of twelve sector-specific education committees that according to the law on work related training (AMU regulation) are committed to assess the need of relevant training courses, including the development of materials necessary for this education, to adults in the transportation sector. The secretariat and the publishing business of TUR are owned in common by employers and unions in the transportation sector. The publishing business of TUR is an integrated part of TUR and therefore has no separate accounts.
The case started as a result of complaints from competitors to TUR on the market for publications used for driver license training. They cited TUR had channelled legitimate aid received to cover its legal administrative duties to cover also ex-penses in their publishing business and that they had also gained by exclusively publishing training material they had developed but was actually financed and owned by the public. Accordingly TUR did not have to pay the development cost, as other publishers are obliged to.
TUR receives direct public aid to fulfil two tasks:
- Aid to cover the administrative tasks as education committee.
- Aid to develop new education courses and the material to be used in these courses. The Ministry of Education has the property rights for the materials TUR develops with aid from the ministry.
This public aid is legal according to the Ministry of Education.
In contrast, the ministry was not legally entitled to deny anyone but TUR the ex-clusive right to publish free of charge the material TUR has developed for the ministry, which had been the case until the 1. January 2004.
The Authority found that the exclusive right given to TUR to publish the material without any payment was an indirect public aid that infringed competition by giving TUR a selective advantage compared to other publishers on the Danish market for education material to driver license courses.
A study based on the accounting information concerning TUR and its publishing business did not, however, give the Authority grounds for a further investigation of the complaints, stating that TUR had used the received legal aid to its administra-tive duties to cover expenses relating to its publishing affair. Part of this conclusion was also due to the fact that the public contribution covering TUR’s administrative obligations as education committee stops at the end of 2006.
The complaints, however, showed that transparency is missing when it comes to the commercial activities of TUR. This causes uncertainty as to whether TUR is using public aid to cover its commercial activities as a publisher to gain an unjustified advantage compared with its competitors. The Authority therefore recommended the Ministry of Education to demand such a transparency in the accounts of TUR. Furthermore the Authority also recommended that the publishing of the material belonging to the ministry should be submitted to a public tender. This would give other publishers than TUR opportunity to enter the market, which is otherwise hard to access, because TUR by virtue of being the education committee in the transportation field has tight links to many of the schools buying the published material.