The European Antitrust Review 2014 • Section 3: Country chapters
Denmark: Competition and Consumer Authority
In March 2013 an amendment of the Danish Competition Act took effect, the result of which is a better framework for enforcement.
January 2013, meanwhile, saw the internal launch of our new strategy which we have called ‘Clear Effect in the Markets, 2013-2016’. We must put our resources to use where they have the biggest impact.
The combination of these two developments gives us a better vantage point to solve the task we have at hand: to enforce the competition rules effectively. In the year to come we will put our words into action; we are already moving in the right direction.
The new Danish Competition Act, which came into force in March 2013, amended the legal framework for sanctions. It introduced imprisonment as a penalty for participating in a cartel and led to a considerable increase in the level of fines. Up to six years’ imprisonment may be the outcome of particularly gross violations.
The risk of imprisonment, combined with the fact that it is still possible for cartel participants to apply for leniency if they come forward, makes it more appealing to reveal a cartel. Due to the introduction of imprisonment as a penalty, the police have also been given better tools to investigate cartels.
Consequently, our expectations are high when it comes to our new framework. Our ability to investigate violations of competition rules is better now than ever before.
We already have a number of cases in the pipeline for investigation, one of which is a large construction cartel where we have partly entrusted further investigation to the Public Prosecutor. The Danish Competition and Consumer Authority currently has 13 cases under investigation by the Public Prosecutor. In addition we have a number of other cases under investigation.
Our strategy means that we will prioritise cases we believe will have the greatest impact on society.
In the first half of 2013 we had three cases which resulted in fines, all of which exemplify of how cases can affect many consumers. The fines were levied before the fine level was raised. The three cases are as follows:
- Georg Jensen: A fine of 1 million kroner to Georg Jensen for resale price maintenance. In several cases the company’s sellers demanded that the retailer should use Georg Jensen’s recommended resale prices as minimum resale prices to consumers.
- Unilever Denmark: A fine of 1.5 million kroner to Unilever Denmark for resale price maintenance. Unilever Denmark had made an agreement with two large Danish supermarket chains not to sell ice cream below the retail price. The case concerned only ice creams intended for individual sale to consumers.
- BSH Hvidevarer: A fine of 1.5 million kroner to BSH Hvidevarer, which is among the largest white goods suppliers on the Danish market, owning brands such as Bosch and Siemens. BSH Hvidevarer had made an agreement with a number of retailers that they had to follow a specific price list. Moreover, BSH Hvidevarer contributed to prevent a German wholesaler from selling the products more cheaply to Danish retailers.
In each of these cases, many consumers benefited from the fact that we intervened. And there are more examples like this.
In June the Danish Competition Council ruled that the German company Deutz AG infringed competition rules by preventing the supply of spare parts for trains owned by the Danish State Railways, DSB. Deutz has refused to supply the spare parts and prevented parallel imports of spare parts in an agreement with its distributor in Denmark, Diesel Motor Nordic. This Danish-Swedish company has also infringed the competition rules by participating in the agreement with Deutz.
It is a matter of great concern for DSB, as the illegal behaviour has led to a delayed and expensive renovation of the train engines. According to DSB, it has also caused delays in traffic.
While our new strategy focuses on effect, we also maintain our focus on high quality. Since 2008, the Danish Competition Appeal Tribunal has fully or partially found for the Danish Competition and Consumer Authority in cases where the latter’s decisions were appealed against.
Enforcement of competition rules is essential to improve the competitive situation in Denmark. But it is not everything.
The Danish Competition and Consumer Authority’s mission is to work towards well-functioning markets in order to create growth and high levels of consumer welfare. In our competition and consumer analyses we publish recommendations to help bolster the successful functioning of markets. Our focus on impact determines, to a large degree, the choice of topics for analysis. The recommendations put forward in our analyses often have the objective of getting consumers and businesses to change behaviour – or to get politicians to change the law so that it does not unduly restrain competition.
We have recently introduced the methodology of behavioural economics in our work with the recommendations. We endeavour to apply a realistic approach that will ensure that consumers and businesses follow our recommendations.
A final and very important future area of focus is the way we communicate, and we give high priority to communication activities. If the public knows our decisions, our recommendations and our activities, then our work has the right kind of impact. Ultimately, our work is vital for the creation of well-functioning markets.
Next Chapter: Denmark: Overview