Is the Smartphone App MyTaxi anti-competitive?

May the taxi drivers' cooperative prohibit its members in its articles of association from using the smartphone taxi brokerage app MyTaxi? The app operator has now had this competitive restriction reviewed by the Higher Regional Court (OLG) Nuremberg.

The cooperative Taxi-Zentrale in Nuremberg eG transmits telephone taxi orders by radio to the affiliated taxi companies, which are affiliated to this association to over 98%. The articles of association of the Taxi-Zentrale prohibit taxi drivers from using further ride brokerage providers such as MyTaxi in addition to the Taxi-Zentrale and/or advertising with them on their cars.

The MyTaxi operator, owned by Daimler-Benz, filed suit against these prohibitions. Its app allows users to observe the position of participating taxis on a street map and take this into account when booking a specific vehicle. MyTaxi regards the articles of association of the cooperative as an impermissible competitive restriction.

The Taxi-Zentrale counters that the prohibitions are necessary because the app operators could limit themselves to lucrative routes. Moreover, an advertising ban is appropriate, as taxi customers in such cases might believe that the taxi was brokered by MyTaxi, even though the brokerage service was actually provided by the Taxi-Zentrale.

The Regional Court (LG) Nuremberg-Fürth ruled in favour of the app operator and deemed the articles of association of the Taxi-Zentrale to be impermissible, whereupon the cooperative requested a decision from the appellate court.

Court's Decision

By judgment of 22 January 2016 – Az. 1 U 907/14 (Press Release) – the Higher Regional Court (OLG) Nuremberg dismissed the appeal and thereby confirmed the impermissibility of the competitive restriction of Taxi-Zentrale Nuremberg eG.

In its reasoning, the OLG stated that the Federal Court of Justice (BGH) had already in 1992 declared the articles of association of a taxi cooperative to be contrary to cartel law, which had prohibited a taxi operator from being a member of a second competing cooperative at the same time and from accepting orders from it via a further radio receiver. This was comparable in this case.

Taxi operators must be permitted to decide for themselves whether and to whom they transmit the GPS position data generated by them. The Taxi-Zentrale also had to accept the advertising for the MyTaxi app on their cars. The risk of confusion concerning the brokerage service was not so serious as to justify a competitive restriction.

Conclusion

The monopoly on the brokering of taxi rides was also not upheld by the OLG Nuremberg. Taxi cooperatives will have to adjust to greater competition in the future.