For at least two reasons the past year has been remarkable for competition lawyers and economists in Denmark. Firstly, a new set of merger rules entered into force on 1 October 2010, and secondly, the relatively new leniency rules were seemingly activated when a large construction cartel was uncovered. From an economic point of view, the development was less exciting. The use of economic advice remained concentrated in a few large cases, and the demand for economic advice still lags behind Sweden and especially Norway.

These conclusions are based on personal interviews with leading Danish competition lawyers from these major law firms: Accura, Bech-Bruun, Bruun & Hjejle, Gorrissen Federspiel, Horten, Kromann Reumert, Lett, Lind & Cadovius, Nielsen Nørager and Plesner.

New merger rules into force

To many Danish competition lawyers and economists, 1 October 2010 was a remarkable date. On that date, a new set of merger control rules entered into force. Lower thresholds values and a new simplified merger clearance procedure for obviously straightforward mergers were the two most important elements of the new rules.

Our interviews revealed that the impact of the new rules has so far been moderate. The general view is that the increase in the number of merger cases has been lower than expected, and that this is due to the aftermath of the financial crisis. Another general view is that the Danish Competition Authority has so far handled the new simplified procedure relatively well. However, some lawyers find that the Danish Competition Authority is still struggling to find it feet with respect to information required under the simplified procedure.

Ineffective leniency rules

Early in 2011, a large construction cartel was uncovered in Denmark. A remarkable feature of the case was that, according to the media, the investigation triggered the first leniency application since the leniency rules entered into force in 2007.

Despite this new development, the interviewed competition lawyers generally gave little credit to the effectiveness of the existing leniency rules. The views on the flaws of the rules were more mixed. One group highlighted the relatively low level of fines as the main barrier. They argue because a leniency application is not without cost, there must be a threat of high fines or prison sentences to make an application attractive. Others find that the current level of sanctions is sufficient, but that Denmark is lacking an effective competition culture. They stress that the deterrence effect is increased by the risk of personal fines, which are registered on the individual's criminal record.

Limited use of external economic advisers

The use of external economic advice in Danish competition cases did not change significantly during the past year. The use of economic advice remained at the same moderate level as in 2009, and that level is still somewhat lower than in Sweden and especially Norway. Our interviews revealed that the demand for economic advice is being influenced by opposing factors. Demand has been inflated by the new EU guidelines on article 102 TFEU and the lower merger control thresholds. However, some lawyers pointed out that a new judgment from the Danish Supreme Court is, in contrast, depressing demand. The case, which was published on 18 March 2011, concerned the TV broadcaster TV 2 Danmark’s use of annual discounts for TV commercials from 2001 to 2005. Despite the fact that the parties submitted economic evidence to support their claims, the Supreme Court paid no explicit attention to this evidence.

Copenhagen Economics