Essential Developments in Competitors Regulation and Coverage 2021 – Denmark

In Denmark, the Competitors Council is the principal enforcer of competitors regulation with the Competitors and Client Authority appearing because the day-to-day caretaker, together with rendering selections in (minor) circumstances. Choices from both could also be appeals to the Competitors Tribunal or the judiciary, and after amendments in 2021 which carried out the ECN+ directive, preliminary enchantment to the previous is not necessary. As a substitute, if thought-about useful, the events could problem selections straight earlier than the civil courts, which might normally be the Maritime and Business Excessive Courtroom with subsequent enchantment prospects. Right here, personal enforcement motion would usually even be heard and superior whereas felony enforcement would happen earlier than the native felony court docket.

Nationwide competitors regulation mirrors Articles 101 and 102 and the EU Merger Regulation (save from the thresholds), which makes it immaterial for the result if a case is superior towards EU and nationwide competitors regulation or solely the latter. By way of finalizing a case or investigations, completely different choices can be found, presuming the case will not be closed informally. Additional to ordering infringements stopped, the Competitors and Client Authority can settle for commitments, impose fines in undisputed circumstances, award leniency, together with immunity, in trade for cooperation, and prosecute the case earlier than a felony court docket if fines are warranted. By way of mergers, these could also be cleared, prohibited or authorized topic to commitments as recognized underneath the EU Merger Regulation. Furthermore, the Authority could defend selections challenged earlier than a civil court docket.

Most of those choices had been explored in 2021, yielding a number of attention-grabbing circumstances introduced beneath. For the sake of brevity, solely references to Articles 101 and 102 are used, however these would additionally cowl the nationwide equivalents except specified.


1. Article 101 and horizontal agreements

In 2021, as standard, Danish authorized observe supplied a few notable Article 101 circumstances involving horizontal agreements of which three benefit feedback. The primary by advantage of being unique, the second for pertaining to twin distribution and the third for touching upon when to just accept parallel behaviour as proof of a concerted observe. Under, these circumstances are detailed additional, together with hyperlinks to the underlying selections.


Panic on the disco – nightclubs in a market sharing settlement

In a moderately unique case complicated, fines had been imposed in November and December 2021 on initially 18, however later 22 bars and nightclubs for having concluded a market sharing settlement. Whereas not all had been a part of the infringement from the start, since 2004, some had agreed to chorus from opening institutions within the proximity of one another, with the remaining becoming a member of within the subsequent years. This market sharing association fashioned a part of a (legit) company settlement centered on joint procurement of products and companies and merited fines between DKK 28,000 and 278,000 (EUR 3,762 to 37,356). Whatever the severity of the violations, reductions had been warranted. At the start, the infringements weren’t disputed. Second, the fines had been calculated towards the 2020 turnover, which had been very low because of the mandated Covid-19 shutdown.

Solely quick summaries can be found because the bars and golf equipment didn’t dispute the infringement, however the circumstances elevate questions in regards to the underlying market definition. The institutions had been scattered throughout an enormous space (the peninsula of Jutland) with greater than 300 km between a few of them, making it debatable whether or not they would qualify as rivals. Nonetheless, it seems that the cartel entails further members disputing both the infringement or their involvement, which is why the matter may come to a head when the remaining circumstances go to court docket. As defined initially, the Competitors and Client Authority solely fines undertakings straight if they don’t dispute the infringement. In any other case, the Authority should prosecute them earlier than the native felony court docket.


Twin distribution and the matter of a by object infringement

One other notable Article 101 case concerned info trade and twin distribution. Twin distribution emerges when the standard vertical relationship between a wholesaler and its retailers is given a horizontal twist, e.g. if the wholesaler engages in direct gross sales and thus competes downstream with its retailers. In 2020, the Competitors Council reacted towards HUGO BOSS, a producer of males’s style garments, for forwarding info on future retail campaigns, together with gross sales and future costs, to 2 of its Danish retailers (Kauffmann and Ginsborg). These actions added a horizontal ingredient to the vertical agreements. In two separate selections, this was recognized as a concerted observe entailing a horizontal trade of delicate info thought-about anti-competitive by object absolving the Competitors Council from any obligation to show anti-competitive results.

HUGO BOSS and Kauffman (however not Ginsborg) appealed, and in 2021, the Competitors Tribunal upheld the Competitors Council’s findings. Whereas the Tribunal solely vaguely defined why unilateral sharing of data amounted to a concerted observe underneath Article 101, this seems to be primarily based on aligned pursuits and failure to distance themselves from the data, making it implausible that the actions had been genuinely unilateral as claimed. Furthermore, the events moved past what can be anticipated inside a vertical relationship, translating this right into a horizontal one by sharing info on the producer’s personal direct gross sales. Nonetheless, the five-member Tribunal was cut up in defining this as a restriction by object. Three members (two economists and a choose) relied on the data overlaying i.a. future costs and thus pertaining to cost coordination, which is why they voted for upholding the choice. In distinction, two members (two attorneys) disagreed and voted for an overturn. Whereas prepared to just accept horizontal trade of delicate info as detrimental to competitors, the minority lacked foundation in expertise (or EU case regulation) to increase this to twin distribution the place the vertical and horizontal components can’t meaningfully be separated. The circumstances had been determined towards the bulk opinion, however at the moment are pending earlier than the Maritime and Business Excessive Courtroom. Subsequently, we should always anticipate to revisit the matter of twin distribution and knowledge trade, which can also be the main focus of DG COMP’s present overview of the vertical block exemption and presumably to be expanded upon within the forthcoming horizontal pointers.


A concerted observe is greater than parallel behaviour

In 2018, the Competitors Council recognized and condemned an unlawful worth settlement between two out of doors promoting corporations (Clear Channel Danmark and AFA JCDecaux). The coordination lined two durations involving September 2008 to December 2010 and January 2011 to April 2015, the place an precise (written) settlement lined solely the primary. Nonetheless, based on the Council, the events tacitly renewed this settlement following its lapse in December 2010, thus partaking in a concerted observe for the second interval. Furthermore, it was immaterial that the events had usually didn’t respect their mutual understanding. The Competitors Tribunal concurred and added that its discovering rested on the events’ failure to distance themselves from the previous settlement, successfully reversing the burden of proof when claiming to have disengaged from any former unlawful worth coordination.

The events challenged these findings earlier than the Maritime and Business Excessive Courtroom, which rendered its ruling in November 2021. Whereas the Courtroom agreed with the Competitors Council relating to the primary interval lined by a written settlement, the Courtroom refused to just accept that this transcended right into a concerted observe for the second interval. On this, the Courtroom relied on the shortage of proof of contacts between the events after 2009, and thereby no proof supporting a gathering of thoughts other than some instance of parallel behaviour. Nonetheless, as established by the European Courtroom of Justice in Ahlström, parallel conduct couldn’t be considered proof of concertation except this offered the one believable rationalization. The Maritime and Business Excessive Courtroom then overturned the Competitors Councils’ findings relating to the second interval, rebutting {that a} concerted observe could possibly be established primarily based on presumptions except the one believable rationalization as held in Ahlström. Even the place the events’ alleged coordination had earlier been lined by a written settlement, indicating that infringing Article 101 was not fully unimaginable to them. The Competitors Council has appealed the case.


2. Article 101 and vertical agreements

Apart from horizontal circumstances, Article 101 was additionally utilized to Retail Worth Upkeep (RPM) circumstances in 2021. These stay a spotlight space for enforcement in Denmark and infrequently contain substantial fines for even minor infringements. This destiny was allotted to a producer of youngsters’s equipment (Konges Sløjd) in October 2021, warranting a high quality of DKK 1,800,000 (EUR 241,892) for having pursued an RPM coverage vis-à-vis certainly one of its retailers over a interval of two years. The corporate high quality was topped up with a person high quality of DKK 100,000 (EUR 13,438) to a number one worker accountable for the coverage. Because the infringement was not disputed, solely a brief abstract is out there. Nonetheless, whereas the coverage was in power for 2 years, it seems to be directed at one single retailer, and there aren’t any references to aggravating circumstances warranting a complement, e.g. punishment for failing to stick to the RPM coverage. Consequently, it seems that the very substantial fines are bedded on a single infringement moderately than a scientific and broad strategy, underlining the severity of RPM infringements in Danish authorized observe.


3. Abusive behaviour

2021 supplied a number of attention-grabbing Article 102 circumstances, together with a dedication case and when to just accept costs as excessive or artificially low. Under, probably the most notable abuse circumstances from 2021 are detailed, together with hyperlinks to the underlying selections.


Even investigations of exclusionary practices may be closed towards commitments

In December 2021, the Competitors Council closed an investigation, towards commitments, into Wolters Kluwer’s software program licences. The case associated to software program utilized by professionals when providing tax help to people and took place after complaints from a competitor feeling foreclosed. After reviewing some 50 agreements, the Council was inclined to establish Wolters Kluwer as dominant and the rendered phrases as abusive. The stated phrases pertained to the agreements being irrevocable for as much as three years and 4 months and reductions solely out there for preparations concluded for longer than a yr. Whereas disagreeing with these findings, Wolters Kluwer however supplied to vary its coverage, henceforth accepting termination with three months’ discover to the tip of a calendar yr and making reductions out there additionally for short-term agreements. The commitments had been made legally binding till 2027.


Rønne Havn and when to think about a worth to be extreme

Bornholm, a Danish island within the Baltic Sea, is served by a number of ferries underneath contracts with the Danish Ministry of Transport. Whereas these ferries join Bornholm with completely different ports in Denmark, Sweden and Germany, all of them departure from the port of Rønne, Bornholm’s greatest metropolis. Earlier than renewing its contract with the Danish Ministry of Transport, one of many ferry operators, Danske Færger, approached the port proprietor to make sure that the operation phrases would stay materially unchanged as this translated into the worth that the operator needed to request from the Ministry of Transport. This was confirmed, and the operator submitted a bid, however subsequently, the port added further prices and elevated the fee by greater than 100 %. The ferry operator refused to pay this and was sued by the port of Rønne.

Earlier than the Maritime and Business Excessive Courtroom, the ferry operator’s precept submission was breach of contract when the port proprietor modified the working phrases materially. Alternatively, that it was extreme pricing in defiance of Article 102 when the worth was elevated signifcantly. Furthermore, in assist of the latter, the operator relied on EU circumstances, comparable to United Manufacturers and AKKA/LAA, offering completely different choices when checking towards extreme pricing, together with worth v. prices and worth comparisons. Furthermore, based on the operator, it follows from Tournier that the burden of proof needs to be reversed when the phrases differed from what was levied comparable locations. As the costs had been decrease in different ports, the operator submitted having established this. In its defence, the port referred to i.a. i) substantial funding in higher amenities that needs to be recouped, that ii) enough notices had been served and what iii) was levied in comparable ports. Furthermore, it follows from Scandlines Sverige AB v. Port of Helsingborg that it additionally mattered how an operator valued the companies (entry to the port), making it too slender solely to give attention to the direct prices. Lastly, the ferry operator had initially complained to the Competitors and Client Authority, and in 2019, the Authority determined to not pursue the matter. A incontrovertible fact that based on the port indicated the absence of abuse.

The Maritime and Business Excessive Courtroom agreed to the precept submission making it redundant to resolve on the matter of abuse. However, the Courtroom contemplated the matter. First, by concluding that the port had a dominant place after which by noting how the brand new worth appeared abusive contemplating the 100 % worth enhance. Nonetheless, because of the lack of additional materials together with the operator’s determination to not name for an professional valuation, nothing conclusive could possibly be made on the matter. The ruling has not been appealed and offers a number of essential classes. At the start, the Maritime and Business Excessive Courtroom is extra prepared to overview claims of abuse, together with extreme pricing, if the info assist this. Nonetheless, to safe a beneficial ruling, an professional valuation needs to be requested. Second, it doesn’t disqualify overview by the courts that the Competitors and Client Authority has refused to analyze the matter.


Money administration and when to think about a worth to be predatory

In 2017, the Competitors Council had closed an investigation right into a money administration firm, Loomis, for anti-competitive foreclosures. Not with out discovering points however towards commitments on termination of long-term exclusivity agreements, that potential may result in foreclosures. The agreements had been initially concluded as a part of buying the money administration actions from 61 banks in 2016 and now tying up 50 of those. Because the 50 banks represented the majority of the financial institution clients, the foreclosures danger was, at a minimal, believable, which made it related to analyze the matter. By advantage of the dedication, no infringements of Articles 101 or 102 had been recognized, however a possible sufferer challenged this in a separate lawsuit towards the money administration firm and claimed compensation.

In an interim ruling from August 2021, the Maritime and Business Excessive Courtroom held that the exclusivity agreements had infringed each Articles 101 and 102. Article 101 for the reason that settlement fell in need of being ancillary to the unique acquisition and now anti-competitive by impact, and Article 102 because it adopted from i.a. Hoffmann-La Roche {that a} dominant enterprise couldn’t tie up a good portion of the market by means of exclusivity preparations. Nonetheless, 4 of the 5 judges additionally held that Article 102 had been violated when Loomis supplied eight (strategic) clients costs beneath Loomis’s Common Whole Value (ATC) and one beneath its Common Variable Value (AVC). That is notable because the Maritime and Business Excessive Courtroom didn’t establish predatory (elimination) intent as required by the European Courtroom of Justice in AKZO to sentence pricing beneath ATC. Beneath this AKZO doctrine, solely pricing beneath AVC can be abusive in itself, however DG COMP has steered to change to Lengthy-run Common Incremental Value (LRAIC) because the related benchmark, e.g. within the Enforcement Paper. Sadly, the 4 judges don’t present superior reasoning for his or her discovering, as an alternative they discuss with i.a. Publish Danmark I and Publish Danmark II and the particular duty of the dominant enterprise. In distinction, the dissenting choose particularly relied on the AKZO doctrine in her vote, rebutting abuse except clients had been supplied costs beneath AVC. Subsequently, it stays unknown if the Courtroom tacitly adopted LRAIC because the related price benchmark, as steered by DG COMP, when checking for predatory pricing. The interim ruling was appealed, and will probably be most attention-grabbing to see the case transfer ahead.


 4. Merger management

In Denmark, the Competitors Council – in shut cooperation with the Competitors and Client Authority – is accountable for merger management, i.e. for approving (in some circumstances with commitments to unravel competitors challenges recognized by the Authority) or prohibiting any merger exceeding the outlined thresholds.

In 2021, 65 mergers had been screened and authorized by the Council (one other two mergers had been notified to the Competitors and Client Authority, however had been later withdrawn). This quantity represents a big enhance from 2020 the place solely 32 mergers had been screened and authorized, indicating excessive exercise amongst undertakings with actions in Denmark.

4 mergers that had been notified to the Competitors and Client Authority in June, September and November 2021 are nonetheless being processed by the Authority, which signifies that the case processing time is longer than standard (these 4 merger notifications regard agreements between i) Volvo Danmark A/S and Titan Lastvogne A/S, between ii) Knorr-Bremse für Schienenfahrzeuge GmbH and DSB Element Workshop, between iii) Alm. Model A/S and Codan Forsikring A/S and between iv) CHR Denmark A/S and Confac Holding A/S). Furthermore, the overall impression is that the pre-notification section of the merger management (the section of communication between the representatives of the undertakings and the Authority that goes forward of handing within the remaining notification) is considerably affected by the excessive case load resulting in longer general case dealing with.

Two of the mergers authorized in 2021 are notably attention-grabbing as they had been authorized with commitments from the concerned undertakings. These might be additional described beneath, together with hyperlinks to the related selections.


Orifarm’s buy of prescribed drugs from Takeda

Orifarm is a Danish pharmaceutical firm with actions within the enterprise space of parallel imported prescribed drugs and generic prescribed drugs. Takeda is a subsidiary of the multinational and biopharmaceutical firm Takeda Pharmaceutical Firm Restricted.

When assessing Orifarm’s buy of prescribed drugs from Takeda, the Competitors and Client Authority discovered that the merger would considerably limit the efficient competitors on 11 of the recognized markets as a result of unilateral and/or coordinated results. Based mostly on the recognized competitors challenges, Orifarm supplied commitments that remove the recognized challenges based on the Competitors and Client Authority’s evaluation. The commitments are known as “fix-it-first” options, which signifies that the commitments should be carried out previous to the merger. With the commitments, Orifarm undertakes to divest seven generic prescribed drugs, 5 advertising authorizations for parallel imported prescribed drugs and one over-the-counter product. Moreover, Orifarm commits itself to adjust to the worth ceiling agreements that The Danish Affiliation of the Pharmaceutical Trade has entered into with the Ministry of Well being and the Danish Areas.


JP/Politikens Hus A/S’s acquisition of sole management over Dansk Avis Omdeling A/S (DAO) and A/S Bladkompagniet

JP/Politikens Hus, a Danish media firm publishing newspapers and promoting books amongst different issues, acquired sole management over DAO, a Danish distributor of day by day newspapers in Jutland and parcels all through Denmark, and Bladkompagniet, a Danish distributor of newspapers on Zealand and surrounding islands and magazines and letters all through Denmark.

Based mostly on an general evaluation, the Competitors and Client Authority concluded that the merger would limit the efficient competitors available on the market for newpaper publishing as JP/Politikens Hus turns into the proprietor of the one two day by day newspaper distributors in elements of Jutland and on Zealand and the encompassing islands. The Competitors and Client Authority was involved that the merger would allow JP/Politikens Hus to interact in enter foreclosures through DAO and Bladkompagniet by providing much less beneficial phrases and costs or just by refusing to supply distribution companies to competing newspaper publishers.

To remove the Competitors and Client Authority’s issues, i.e. to make sure that DAO and Bladkompagniet present newspaper distribution on honest phrases to 3rd occasion information publishers, JP/Politikens Hus has submitted 5 commitments. In accordance with these commitments, DAO and Bladkompagniet commit themselves to promote newpaper distribution on cheap, non-discriminatory and clear phrases and costs to all clients, to solely refuse newspaper distribution if it may be justified by documented capability constraints and to publish present tariffs and phrases for newspaper distribution. Moreover, to make sure that artificially excessive prices at DAO and/or Bladkompagniet don’t have an effect on the worth of newspaper distribution, JP/Politikens Hus commits itself to promote companies to DAO and/or Bladkompagniet on market phrases. If any disputes relating to the commitments flip up between DAO and/or Bladkompagniet and their clients, these disputes should be solved by mediation after which arbitration.


5. Enforcement, together with compensation

In 2021, in respect of enforcement, new powers got to the enforcers, which demanded an replace of the issued pointers. Furthermore, leniency was granted, and a declare for compensation resurrected. Under, these developments are detailed additional, together with hyperlinks to the underlying selections.


Leniency remained out there and was used to shut a case complicated

As already indicated, leniency is out there to undertakings cooperating with the Competitors and Client Authority to finish an infringement. This may even be within the type of immunity. In 2017, FinDan El-Anlæg, energetic available in the market for refrigeration companies, reported itself to the Competitors and Client Authority underneath the leniency guidelines, vesting immunity to the primary enterprise to report an infringement and reductions to the next enterprise(s). In December 2020, this was used to impose a high quality of DKK 400,000 (EUR 53,753) on a co-conspirator for having taken half in a market-sharing settlement. In October 2021, the circumstances had been lastly closed with FinDan El-Anlæg benefitting from immunity and by this escaped any fining.


New enforcement powers and pointers

As a part of Denmark’s implementation of the ECN+ directive, new powers had been vested within the Competitors and Client Authority in 2021, together with the proper to summon people to an interview and prosecute circumstances earlier than a felony court docket if fines are warranted. Beforehand, solely the felony prosecutor may pursue fines, and the Competitors and Client Authority was in precept barred from investigating infringements that would probably warrant fines. Henceforth, the Competitors and Client Authority could pursue the case from begin to finish, offered that expenses aren’t filed towards a person. Such circumstances should nonetheless be handed over to the felony prosecutor, and basic rights should be revered.

Whereas no circumstances have been pursued underneath this new streamlined system, the Competitors and Client Authority prepares for this, e.g. by updating its pointers on self-incrimination when requested to supply info as a part of an investigation by the Authority. The rules define the elemental rules as established in EU case regulation and by observe from the European Courtroom of Human Rights. The previous applies to undertakings whereas the latter applies to people.


Personal enforcement and declare for compensation

In 2007, the Competitors Council held that Elsam (now Orsted) had infringed Article 102 by means of extreme (wholesale electrical energy) costs in Western Denmark. A gaggle of victims (totalling 1,054 undertakings) determined to file a follow-on declare and demanded compensation for his or her losses, which at the moment exceeded DKK 4.4b (EUR 591m), however at the moment most likely within the vary of DKK 10b (EUR 1.34b) as a result of compounded pursuits. Sadly for the plaintiffs, the underlying determination was overturned on enchantment in 2018, which is why the Maritime and Business Excessive Courtroom dominated that the follow-on declare couldn’t advance. Nonetheless, this was appealed, and in 2021, the Excessive Courtroom dominated of their favour, permitting the declare for compensation to advance whatever the destiny of the unique infringement determination, offered that the plaintiffs individually established an infringement. The case was then remitted again for overview by the Maritime and Business Excessive Courtroom.

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