Everyone who has been hit in the pocket by the extortionate, but legal, rates of Sofia taxi companies imitating the logos of their competitors would like to see these imitators fined for their deceit.

As of April 26, customers who have been tricked can take some comfort, as that day saw the Supreme Administrative Court (SAC) issue its final ruling in one such case against a company mimicking the logo of a competitor. The court confirmed a decision by the Commission for Protection of Competition (CPC) to impose a 50 000 leva fine on OK Supershans taxi company for mimicking the logo of OK Supertrans. The SAC’s final ruling means that a year-and-a-half after the CPC issued its decision to fine OK Supershans, the company will now be forced to pay the fine with no means of further delays.

Background
The Sofia Echo has reported several times stories of foreign nationals arriving at Sofia Airport being tricked by taxi companies that rely on people not paying careful attention to the rates shown in small print.

In some cases, victims ended up paying 100 euro bills for trips that usually cost no more than 15 euro at the most. In most cases, this happened to people tricked by taxi companies mimicking the logo of OK Supertrans, one of Sofia’s oldest taxi companies.

The issue has been brought repeatedly to the attention of the Transport Ministry, the Commission for Protection of Competition and Sofia Airport.

Until now, the response has been that charging high rates is not against the law because the market operates on free market principles, and as long as the rates are stipulated on the taxi’s doors and windows, it is the passenger’s own responsibility to read them and to understand how much they will be charged. Usually, by the time passengers realise they have been taken for a ride, so to speak, it is too late and they face exorbitant fares.

The trick works well, and happens not just to newly-arrived foreigners who have never been to the country and know nothing about the local taxi environment, but also to Bulgarians. Once the passenger is in the taxi, the driver has every right to call the police should the tricked customer refuse to pay the fare, and protests about having been misled by the lookalike logo are of no use. There has been an improvement at Sofia Airport’s two terminals where tenders were held and taxi companies were officially selected to service the airport. But nothing stops taxi drivers from competitor companies prowling around the airport looking for yet another newly-arrived victim.       

Legal defence
From a legal point of view, matters such as the mimicking of a logo are referred to the CPC. OK Supertrans has filed a number of complaints over the years claiming that its logo has been mimicked by competitors. This was the case with the April 26 SAC ruling that followed an OK Supertrans complaint against OK Supershans. The time it took the SAC to confirm the CPC ruling against OK Supershans shows why the scheme of mimicking a competitor’s logo has been popular with not just one, but a whole five taxi companies.

The entire legal process took more than a year, during which time the perpetrator – in this case OK Supershans – was left to capitalise from its mimicking of OK Supertrans’ logo.
As it is, the fine imposed on OK Supershans initially was 150 000 leva. The same fine was imposed on four other companies, OK-Softrans, OK-Mirchik, SK-OK Avtotrans and OK-Superlux, all for the same reasons.

Turnover issues
In January 2010, the CPC was ordered by the SAC to lower the fine from 150 000 leva to 50 000 leva for OK-Softrans, OK-Mirchik and OK Supershans.
The reason was that, according to the law, the fine for unfair competition can be no more than 10 per cent of the perpetrator’s turnover for the preceding year. According to the court, in the case of these three companies, the 150 000 leva fine was disproportionately high for their turnovers.

The April 26 2010 SAC ruling concerns only the fine imposed on OK Supershans, and not the other four companies, but does set a precedent suggesting that the other four companies would also be made to pay the fine. If this happens, the CPC should get a total of 450 000 leva in fines, all as a result of OK Supertrans’ complaint.

The question that remains open is whether these fines would serve as a strong enough reason for the perpetrators to stop their unfair competition and not try any other trick based on imitating OK Supertrans’s logo. Or, in other words, is the 50 000 leva fine an acceptable expense for mimicking the logo of a competitor. No statistics are available as to how much money any of the fined companies make a year, but if one bears in mind the maximum fine that can be imposed (10 per cent  of the preceding year’s turnover) then it can be speculated that the 2007 turnover of the companies fined by 50 000 leva could be about 500 000 leva each. It is not certain that all of these earnings came from tricked customers which, on the other hand, suggests that there is a market in Sofia for taxi companies charging sometimes 10 times higher than most companies do. The question is whether they need to imitate the logo of a competitor to do so.

Regulation
The fact that there is no set maximum fare for taxi companies has been the subject of much debate recently, and the OK Supertrans case added to the debate.

In October 2009, it was announced that authorities planned to impose lower ceilings on taxi fares with the purpose of clamping down on the business of taxi cab drivers that prey on foreigners and careless customers. According to the idea, municipalities will have the right to impose the maximum fare that cab companies would be allowed to charge. In this way, local administrations will be able to impose maximum fares appropriate to their part of the country, the Transport Ministry said, reasoning that some places have lower average earnings than others.

This, however, would make local administration a decisive factor in the business of taxi companies as they would have the right to set the maximum fares for each municipality. It would be interesting to see what effect these maximum rates would have on cases such as that involving OK Supertrans.

Because if the maximum fare is set at a rate 10 per cent higher than it is now, this would have little or no effect on OK Supertrans’s unfair competitors who charge such fares anyway. In short, instead of raising the fines and sanctions for unfair competition, the ministry has taken the route of regulating taxi companies’ business, rather than allowing the free market to decide.