This article provides legal practitioners with an overview of competition law in Denmark, which is based on EU competition law. To a large extent, Danish rules are similar to EU rules. The focus of the article is therefore on those areas of the law where Danish rules differ from EU rules, as well as the rules on state aid. As well as giving an introduction to Danish competition law, this article covers recent developments in Denmark.
- Unilateral conduct
- State aid
- Rules on sanctions
- Damages for breach of competition rules
Referenced in this article
- The Danish State Prosecutor for Serious Economic and International Crime, SØIK
- The Danish Competition Act (Consolidated Act No. 155 of 1 March 2018)
- The Danish Competition and Consumer Authority
- The Danish Competition Council
- The Danish Competition Appeals Tribunal
The prohibition on anticompetitive agreements in the Danish Competition Act follows a structure similar to that of article 101 of the Treaty of the Functioning of the European Union (TFEU). Section 6 of the Danish Competition Act (the Competition Act) contains the general prohibition and is comparable to article 101(1) of the TFEU, whereas section 8 is comparable to article 101(3) of the TFEU. Case law from the European Commission and the European Court of Justice (ECJ) is applied when interpreting the prohibition on anticompetitive agreements in the Competition Act.
Agreements subject to the Competition Act can benefit from the EU block exemptions, as these have been implemented in Danish law. Further, the Competition Act provides a de minimis exemption in section 7, which was aligned as of 1 January 2018 with the De Minimis Notice 2014/C 291/01. According to the exemption, the rules on anticompetitive agreements do not apply to agreements or concerted practices if:
- the aggregate market share held by the parties to the agreement does not exceed 10 per cent on any of the relevant markets affected by the agreement, where the agreement is made between undertakings that are actual or potential competitors on any of those markets (agreements between competitors); or
- the market share held by each of the parties to the agreement does not exceed 15 per cent on any of the relevant markets affected by the agreement, where the agreement is made between undertakings that are not actual or potential competitors on any of those markets (agreements between non-competitors).
However, the Danish de minimis exemption does not apply to agreements that (1) have restriction of competition as their object or (2) may affect trade between member states, as these types of agreements are subject to article 101 of the TFEU and, if applicable, the EU de minimis rule.
Section 9 of the Competition Act provides undertakings with the possibility to notify an agreement for assessment by the Danish Competition and Consumer Authority (DCCA). Similar to the previous EU system, the DCCA can, depending on the assessment, provide the undertaking with a declaration stating that the agreement does not violate section 6 of the Competition Act. However, the DCCA may refrain from considering a notification if the agreement appreciably affects trade between member states, and in practice, the option of having an agreement assessed by the DCCA is rarely used.
The DCCA typically announces the strategy it intends to follow during the course of a couple of years. It follows from the strategy published in January 2019 that the DCCA will focus on, among other things, digital and technological developments. This is in accordance with the strategy on digital growth launched in 2018 by the Danish Ministry of Industry, Business and Financial Affairs, which contains several initiatives relating to competition law regulation, for example a proposal for an amendment of the Danish merger control thresholds in respect of digital business models.
The Construction cartel case
In 2010, the DCCA conducted a dawn raid at the premises of five undertakings in the construction industry, which led to the opening of a major and complex case, referred to as the Construction cartel case, which in fact consisted of several individual cartel cases. The DCCA and the Danish State Prosecutor for Serious Economic and International Crime (SØIK) used substantial resources to uncover the infringements, which took place between 2007 and 2009. SØIK filed charges against 33 building contractors for competition law infringements such as bid rigging and exchange of information on prices and terms, and issued fine notices to 25 companies and 21 managing employees. Among these, only one company and one managing employee were acquitted in court, and only one case ended with a withdrawal of the charges. All fines were criminal fines, and the largest fine imposed by the authorities was 10 million kroner, imposed in a settlement procedure with SØIK in November 2014. The amount of the fine reflects the level at that time (ie, before the substantial increase in fine levels under the Competition Act in March 2013). The Construction cartel remains the largest Danish competition law case to date.
The Demolition cartel case
In October 2015, the DCCA conducted dawn raids at the premises of a number of companies in the demolition industry, which led to the opening of another major and complex case, referred to as the Demolition cartel case, which again consisted of several individual cartel cases. The demolition companies violated the Competition Act by exchanging information on prices and coordinating bids in connection with tenders regarding different demolition contracts (bid rigging). The conduct was found to constitute a concerted practice that amounted to a cartel. In one of the cases, the prosecutor motioned for imprisonment for an employee from one of the demolition companies. However, in 2018, the District Court of Holbæk dismissed the motion for imprisonment as it did not find the cartel to be of severe nature, and consequently, that the conduct did not constitute an offence punishable by imprisonment. The series of cases came to an end in February 2020, when the last demolition company and three employees from the company involved in the demolition cartel were discharged as the company actively contributed to the investigation of the infringements and fulfilled the criteria for obtaining leniency. In total, six demolition companies and 12 employees have paid fines amounting to 18 million kroner. The largest fine imposed was 5.9 million kroner, which was issued in a case with 12 infringements concerning bid rigging.
The Lely Nordic A/S case
In June 2014, the Danish Competition Council (the Council) rendered a decision stating that five Danish companies active on the market for milking systems had entered into an anticompetitive agreement on price-fixing and geographical market sharing. The companies were all part of the Lely franchise and had frequently met to discuss and coordinate prices and market sharing. In October 2015, the Danish Competition Tribunal (the Tribunal) ruled in favour of the Council, and as of April 2016, the franchisor (and a person from the management) and three of the Danish franchisees entered into a settlement with SØIK. The franchisor accepted a fine of 750,000 kroner and the three franchisees each accepted a fine of 100,000 kroner. The person from the management accepted a fine of 25,000 kroner. The level of the fines reflected, inter alia, the duration of the infringement (four and a half years) and the turnover of the companies involved.
The LKF Vejmarkering/Eurostar case
In June 2015, the Council found that two companies, LKF Vejmarkering (LKF) and Eurostar Danmark (Eurostar), had entered into an anticompetitive agreement by submitting a joint bid through a consortium in a public procurement for road marking. The public procurement consisted of three contracts each covering a part of Denmark and each organised with the option of submitting a bid for just one of the contracts. The consortium of LKF and Eurostar submitted a bid for all three contracts and won the tender as the consortium’s prices were overall the lowest. At the time, the two companies were the two largest contractors on the market for road marking.
In 2016, the Tribunal upheld the Council’s decision by finding that LKF and Eurostar could have submitted individual bids for the individual districts, and that, consequently, LKF and Eurostar were actual or potential competitors – regardless of whether LKF and Eurostar individually had the capacity and option to submit a bid for all three districts.
In August 2018, the Danish Maritime and Commercial High Court found that LKF and Eurostar had not violated the prohibition against anticompetitive agreements, and thereby the Court overturned the prior decisions from the Council and the Tribunal. The Court held that the mere fact that LKF and Eurostar had the capacity to submit individual bids for the individual districts did not preclude them from entering into a consortium and submitting a joint bid for the three districts as a whole. The assessment of whether LKF and Eurostar could have submitted individual bids for all three districts (and not just one or two of the districts) was, thus, the decisive factor as to whether the joint bid violated competition law.
In November 2019, the Danish Supreme Court rendered its judgment in favour of the Council and Tribunal, ruling that LKF and Eurostar had violated the Competition Act by submitting a joint bid through a consortium. The Supreme Court attached importance to the fact that the consortium did not constitute a production cooperation and that the consortium did not establish cooperation between LKF and Eurostar in connection with the sale of the offered services. Moreover, the Supreme Court emphasised that LKF and Eurostar could have submitted individual bids for the individual districts.
The Boliga.dk case
In February 2016, five Danish real estate agents accepted fines for colluding to boycott a property finding website, Boliga.dk, which is a competitor to the real estate agents’ own property finding website, Boligsiden.dk. The case concerned a period from 2009 to 2010, in which the real estate agents discouraged their employees from providing photographs to the competing property finding website. The fines imposed amounted to 12 million kroner, not including the additional personal fine of 25,000 kroner issued to one senior executive from each of the five companies. One real estate agent (the EDC Chain) and the Danish trade association for real estate agents rejected SØIK’s settlement offer and initiated court proceedings. In January 2018, the District Court of Copenhagen found that the boycott activity amounted to a concerted practice between the real estate agents to protect the real estate agents’ own property finding website from competition. The EDC Chain was fined 1 million kroner and the Danish trade association for real estate agents was fined 250,000 kroner. It is notable that the real estate agents in the EDC Chain had the higher market share (and, thus, probably also the highest turnover) but received a significantly lower fine than many of the other real estate agents, who had accepted the settlement with SØIK. However, the fine imposed on the EDC Chain by the District Court of Copenhagen was in line with previous case law, in which the courts have been reluctant to agree with the large fines argued for by SØIK.
The Roof felt and roof foil case
In May 2017, the Council stated that four companies had restricted competition on the market for roof felt and roof foil by entering into an agreement in which they coordinated the content of a national industry-based standard and established a quality marking, ensuring that the standard was met. In the agreement, the four companies coordinated their behaviour towards competitors by discrediting them through the standards. In September 2018, the Tribunal held that the Council’s analysis of the economic and legal context was insufficient and that the Council had not proved – with the required certainty – that the object of the agreement was to restrict competition. Thus, the Tribunal remitted the case to the Council for review and renewed decision.
The HMN, Gastech Energi, Kjertner and DEBRA case
In July 2017, the Tribunal upheld the Council’s decision, establishing that HMN Naturgas (HMN), Gastech-Energi, Kiertner and the energy industry association DEBRA – Energibranchen had coordinated prices on gas furnace maintenance subscription for end users in 2014. HMN offered its end customers gas furnace maintenance subscriptions through independent plumbers, called ‘service partners’. Gastech-Energi and Kiertner were service partners but did themselves offer gas furnace maintenance subscriptions to end users. The Tribunal considered that HMN, Gastech-Energi and Kiertner agreed that a part of the fees for HMN’s end users should rise, and that the parties were competitors, since HMN, Gastech-Energi and Kiertner all offered gas furnace maintenance subscriptions to end users. The Tribunal did not examine whether the agreement had had any negative consequences on the market concerned, since it found the agreement to be a restriction of competition by object. Moreover, the fact that the total price for HMN’s end users was actually reduced was not in itself sufficient to prove that the agreement did not restrict the competition, because the parties – according to the Tribunal – had not shown that prices would not have been reduced even further without the agreement.
In June 2019, the Danish Maritime and Commercial High Court upheld the Tribunal’s decision and ruled that HMN, Gastech-Energi, Kiertner and DEBRA violated the Competition Act by coordinating prices. The case is currently pending before the High Court of Eastern Denmark.
The Clear Channel/AFA JCDecaux case
In November 2019, the Tribunal upheld the Council’s decision establishing that two competitors, Clear Channel Danmark A/S and AFA JCDecaux A/S, had infringed section 6 of the Competition Act and article 101 of the TFEU by coordinating rebates through agreements and concerted practice on the market for the sale of advertising space in outdoor media in Denmark. More specifically, the companies had coordinated rebates concerning media commission, security compensation, information compensation and cash discount, and the Tribunal found that the objects of the agreements and concerted practice were to restrict competition. The case is currently pending before the Danish Maritime and Commercial High Court.
Cases on resale price maintenance
Generally, the DCCA has paid attention to resale price maintenance. In November 2016, Opel Danmark accepted a fine of 8.25 million kroner for imposing binding resale prices on the company’s distributors. The company had entered into anticompetitive price agreements with the distributors, in which it had fixed minimum resale prices for the sale of used leasing, rental and demonstration cars for approximately four years.
In April 2017, Olympus Danmark accepted a fine of 3.6 million kroner for imposing binding resale prices on distributors for approximately two years. The company entered into vertical anticompetitive price agreements with some of the company’s distributors to ensure that the distributors did not sell certain camera models at prices other than those determined by Olympus Danmark. The company used a kickback system, which included a payback of a cash amount from Olympus if the distributors could provide evidence that the cameras had been sold at the minimum price determined by Olympus, and if not, they would not receive a payback.
Moreover, in December 2019, the High Court of Eastern Denmark upheld a ruling by the District Court of Næstved and imposed a fine of 1 million kroner on a Danish distributor of hair products, Icon Hairspa A/S, and a fine of 100,000 kroner on a member of the Icon Hairspa management for violating the prohibition on resale price maintenance in the Competition Act. The company required that its dealers followed the recommended retail price as the minimum price when selling certain hair products.
Cases on trade organisations
In recent years, the DCCA has paid special attention to trade organisations’ provision of information and recommendations to their members.
Until December 2013, the Danish Construction Association (the Association) had practised a reporting scheme under which scaffolding companies were obliged to report to the Association, prior to bidding on a project if the bid exceeded 50,000 kroner. This information was then circulated among the bidding members of the section by the Association. The reporting scheme entailed a risk of restricting competition and, consequently, the Association made commitments to the Council to stop informing its members of competitive bids when they were bidding on a project. Further, the Association more generally undertook not to participate in or encourage, either directly or indirectly, the creation of a similar reporting scheme. The commitments were made binding by the Council, making it illegal for the Association to violate the commitments.
In April 2014, the Tribunal ruled in favour of the Council in a case regarding the trade organisation for car mechanics. The trade organisation had illegally urged its members to boycott Autobutler, a company running an internet portal. The Council ordered the trade organisation not to engage in such behaviour in future.
In April 2018, the Tribunal upheld the Council’s decision involving the Danish Camping Board (the Board). The Board was found to have illegally restricted competition by adopting a provision that camping sites should require their guests to buy, at a fixed price, a ‘camping pass’ issued by the Board. The practice entailed a combined agreement on price and exclusion of competitors from the market and comprised almost 90 per cent of all Danish camping sites. According to the Tribunal, the practice had the object of restricting competition. In December 2019, the Board agreed to pay a fine of 300,000 kroner for the infringement.
Anticompetitive unilateral conduct is regulated in section 11 of the Competition Act. The section corresponds to article 102 of the TFEU and is interpreted in accordance with case law from the Commission and the ECJ. If a certain practice affects trade between EU member states, the national provision is applied with article 102 of the TFEU.
The unaddressed mail case (Post Danmark)
The unaddressed mail case concerned the fully liberalised Danish market for the distribution of unaddressed mail (ie, newspapers and brochures), in which Post Danmark held a dominant position in the years 2003 and 2004. At the same time, Post Danmark was a legal monopolist in the market for the delivery of addressed letters and small parcels not exceeding a certain weight, which entailed a universal obligation to provide distribution of letters and parcels nationwide. Thus, Post Danmark had a nationwide distribution network, which could also be used on the liberalised market for unaddressed mail.
On the market for unaddressed mail, Forbruger-Kontakt A/S (FK) was the only competitor to Post Danmark with a nationwide distribution network. For FK to maintain its nationwide distribution network, it had to keep up a certain customer volume.
In 2003, Post Danmark took over three major customers (Spar, SuperBest and Coop) from FK by offering them rates lower than those charged to Post Danmark’s other customers. FK complained to the Danish competition authorities and the Council found that Post Danmark abused its dominant position by using selective pricing.
The decision was appealed by Post Danmark and, in 2010, the Danish Supreme Court referred two preliminary questions to the ECJ regarding the interpretation of article 102 of the TFEU, which led to the landmark judgment in case C-209/10, Post Danmark I.
The ECJ stated that the prices offered to Spar and SuperBest, which covered Post Danmark’s average total costs, did not constitute anticompetitive behaviour. Thus, the remaining procedure before the Supreme Court only concerned the price offered to Coop, which did not cover Post Danmark’s average total costs. However, the price covered the great bulk of the costs attributable to the distribution of unaddressed mail (the incremental costs). Consequently, the Supreme Court found that Post Danmark’s pricing behaviour towards Coop did not constitute an abuse of dominance. The Supreme Court applied the directions laid down by the ECJ and found that the Council had not proved that the pricing behaviour (below average total costs, but above average incremental costs) produced an actual or likely exclusionary effect to the detriment of competition.
The Deutz AG case
In June 2013, the Council ruled that Deutz AG (a German engine manufacturer) abused its dominant position by preventing the supply of spare parts for the IC3 trains owned by the Danish state railway company, DSB. Deutz refused to supply spare parts for the IC3 trains and prevented parallel imports of spare parts in an agreement with its distributor in Denmark. In December 2013, the Tribunal upheld the Council’s decision, and the case is currently pending before the Danish Maritime and Commercial High Court.
The Elsam case
In 2007, the Council found that Elsam A/S (now Ørsted) abused its dominant position on the wholesale market for electricity in western Denmark in 2005 and 2006 by imposing excessive pricing. In August 2016, the Danish Maritime and Commercial High Court upheld the Council’s decision from 2007 and found that there was no reasonable connection between the prices and the costs, and that the prices exceeded those that could have been achieved on a market with effective competition. However, in May 2018, the High Court of Western Denmark acquitted Elsam of the charges for abuse of a dominant position by ruling that the competition authorities had not proved with a sufficient degree of certainty that Elsam’s prices were excessive. The Court found that the competition authorities failed to include certain costs in their application of a test similar to the United Brands test. In October 2018, the Danish Appeals Permission Board denied the Council access to appeal the case to the Danish Supreme Court.
The Teller case
In September 2019, the Tribunal upheld the Council’s decision regarding Teller (now Nets). The Tribunal found that Teller abused its dominant position on the Danish market for merchant acquiring services and mobile payment solutions for point of sale payments from 2012 to 2016 by using conditional rebate schemes and provisions regarding exclusivity to a limited number (14) of its largest customers. According to the Tribunal, Teller offered its customers the rebate schemes on condition that the customers used Teller solely or to a large extent. The case is currently pending before the Danish Maritime and Commercial High Court.
The CD Pharma case
In November 2018, the Tribunal upheld a decision by the Council in which it found that CD Pharma (a pharmaceutical distributor) abused its dominant position by charging excessive prices for the drug Syntocinon. The case concerned the Danish market for oxytocin (contained in Syntocinon), which is used for pregnant women in connection with childbirth, and CD Pharma had an exclusive distribution agreement on the Danish market with the European producer of the drug. In March 2020, the Danish Maritime and Commercial High Court rendered its judgment in the case with dissent. Three of the five judges found that CD Pharma was dominant in 2014 and 2015 on the market for oxytocin, while the two other judges found that CD Pharma was not dominant.
The question of dominance is of interest, because CD Pharma only became a residual supplier as a result of another supplier’s (Orifarm) breach of contract with the buyer, Amgros, and because CD Pharma acted on a one-year tender market, whereby CD Pharma submitted bids in competition with Orifarm, among others. All the judges found that CD Pharma’s high price for Syntocinon for a period of less than six months was excessive and, consequently, violated the Competition Act and article 102 of the TFEU.
The Falck case
In January 2019, the Council found that Falck (Denmark’s largest provider of ambulance services) abused its dominant position by excluding its largest competitor, BIOS, from the Danish market for ambulance services. Between August 2014 and October 2015, Falck decided on, and implemented, a strategy that consisted of, among other things, conveying negative stories about BIOS to the press and to Falck’s employees with the purpose of influencing any paramedics who were considering jobs with BIOS to abstain from applying for those jobs. The behaviour shown by Falck made it difficult for BIOS to recruit paramedics and ultimately BIOS was forced to leave the market. In December 2019, Falck confessed to the infringement and the District Court of Copenhagen imposed a fine of 30 million kroner. The size of the fine reflects the increased level of fines that applies to competition law infringements as of 1 March 2013.
The Danish rules on state aid
Section 11(a) of the Competition Act contains the Danish rules on state aid. The Council may issue orders for the termination or repayment of aid granted from public funds to support certain forms of commercial activity in cases where (1) the direct or indirect object or effect of the aid is distortion of competition, and (2) the aid is not lawful according to public regulation.
Section 11(a) is similar to – and interpreted in accordance with – the corresponding provisions of the TFEU. However, section 11(a) is not applicable if the aid is lawful according to public regulation.
The Danish rules on state aid do not entail block exemptions similar to those issued by the Commission as regards the application of articles 107 and 108 of the TFEU to certain categories of state aid. Thus, the application of section 11(a) does not require the aid to exceed a certain de minimis ceiling, and even aid amounting to rather limited sums may be caught by the provision.
The Council may refrain from investigating a case under section 11(a) if the aid scheme at issue affects trade between EU member states. Typically, this will be the case if the aid scheme at issue is being, or has been, assessed by the Commission under articles 107 and 108 of the TFEU, or if the Commission intends to do so in the near future.
The Sønderborg Municipality case
In January 2016, the High Court of Western Denmark ruled that Sønderborg Municipality was entitled to commission for guarantees provided for two district heating companies. The two companies had received guarantees without any underwriter’s commission for credit facilities of 440 million kroner and 114.8 million kroner, which the two companies respectively obtained for the purpose of financing the municipality’s heating plans.
The guarantees provided without any underwriter’s commission placed the two district heating companies in a favourable position on the market compared to other companies and distorted the competition. Consequently, the Court ruled that the two guarantees were void of effect and that Sønderborg Municipality was justified in collecting commission for the guarantees in accordance with market conditions.
The two district heating companies applied for permission to appeal the judgment to the Supreme Court, but the Appeals Permission Board rejected the application by reference to the fact that the judgment did not concern fundamental questions of statutory interpretation.
In 2015, the DCCA found a basis for issuing informal injunctions in regard to section 11(a) of the Competition Act in two cases. The cases involved two anonymous municipalities, which allegedly had granted state aid to an association and a sports centre. Following these cases, the DCCA announced an open letter addressed to the Danish municipalities, stating that placing public premises at the disposal of local associations is likely to constitute a violation of section 11(a) if the activities at the premises are of a commercial nature.
Rules on sanctions
In December 2012, the Danish parliament passed an act on sanctions for competition law violations. The object of the act was to increase the fines for companies and individuals and to introduce custodial sentences in cartel cases. The amendment entered into force on 1 March 2013 and, consequently, the rules only apply to competition infringement after 1 March 2013.
Increases in fines from 1 March 2013
|Gravity||Examples||Previous indicative level||New indicative level||Indicative level of fines for individuals|
|Less grave||Exclusive purchase obligation lasting more than five years||Up to 400,000 kroner||Up to 4 million kroner||Minimum 50,000 kroner|
|Grave||Resale price maintenance; non-compete clauses in joint production agreement||400,000 to 15 million kroner||4 million to 20 million kroner||Minimum 100,000 kroner|
|Very grave||Coordination of prices, production, customers or bids; certain types of abuse of dominance||More than 15 million kroner||More than 20 million kroner||Minimum 200,000 kroner|
Custodial sentences in cartel cases were also introduced in the amendment from 2013. Cartel agreements are punishable by imprisonment if the participation in the cartel was deliberate and if the offence is grievous, judging by its scale and the adverse effects it is capable of causing. Under section 23(3) of the Competition Act, the punishment for participating in a cartel may be imprisonment for up to 18 months. However, under aggravating circumstances, the punishment may increase to imprisonment for up to six years.
The custodial sentence is primarily directed towards involved members of management, members of the board and responsible employees. SØIK has unofficially announced that it will request unconditional imprisonment in cartel cases, and that the imprisonment for up to 18 months applies if the estimated total value of the infringement (eg, a price-fixing cartel) is more than 10,000 kroner. Further, according to the unofficial announcement from SØIK, imprisonment for up to six years applies if the estimated value of the infringement is more than 500,000 kroner. It remains to be seen whether the courts will follow the view of SØIK. In the Demolition case, as mentioned above, SØIK for the first time under Danish competition law made a claim for imprisonment of the managing employees in the company. However, both the District Court of Holbæk and the High Court of Eastern Denmark dismissed the claim for imprisonment and instead imposed a fine of 100,000 kroner based on a concrete assessment.
Since 2007, it has been possible to apply for leniency in Denmark in cartel cases, and the Danish leniency regime is similar to that of the European Union. Thus, the first undertaking to satisfy the criteria will obtain withdrawal of charges, and the subsequent leniency applicants may obtain a reduction of the fine, provided they submit new, relevant information. Similarly, if an individual fulfils the criteria for leniency, he or she may avoid a custodial sentence or other type of punishment, and the subsequent leniency applicants may have their sentences reduced. In general, plea bargaining does not exist under Danish law and, consequently, any reduction in custodial sentences to those who report a cartel subsequent to the first reporter will be decided by the courts.
To benefit from the leniency scheme, the applicant must satisfy the following criteria:
- the authorities are presented with new evidence enabling the authorities to conduct an investigation or to establish a cartel offence;
- the undertaking in question cooperates with the authorities throughout the processing of the case;
- the undertaking ends its participation in the cartel no later than at the time of applying for leniency; and
- the undertaking has not forced others to participate in the cartel.
As of 1 January 2018, a preliminary application (a marker) for leniency can be submitted, which shall be finalised within the time limit determined by the competent authority, In that case, the application is deemed to have been submitted as at the date of submission of the preliminary application and, consequently, the preliminary application facilitates the possibility of reserving a place in the queue for leniency, while putting together a final application.
Damages for breach of competition rules
The right to damages for loss as a result of breach of either Danish or EU competition rules is governed by the Danish Act (the Act) on implementation of the Damages Directive (EU Directive 2014/104) and the general Danish rules on damages.
The Act ensures a right to full compensation for competition law infringements and provides an extended limitation period of five years for bringing actions for damages in competition cases compared to the general statute of limitation for damages in Denmark, which has a limitation period of three years.
The Act entered into force on 27 December 2016 and is not applicable to infringements initiated before this date. Damages for infringements before the commencement date may be obtained only if the plaintiff proves:
- negligence (culpa) or intent by the defendant;
- a causal and foreseeable loss; and
- absence of fault by the plaintiff.
To date, only a limited number of cases on damages for breach of competition law have been heard by the Danish courts, and most of these cases concern damages as a consequence of anticompetitive agreements. Moreover, all cases concern damages for infringements before the new Danish Act on implementation of the Damages Directive entered into force. Consequently, case law gives no guidance on how the new damages claim regime works. The following cases are, thus, all from before 2016.
The Electricity cartel case
A case from 2006 concerning an electricity cartel illustrates the difficulties of determining the loss in a case concerning damages for breach of competition rules. The municipality of Copenhagen claimed to have suffered a loss (320,000 kroner) caused by a bid rigging cartel for electricity works. The District Court of Gentofte found that the admitted participation in the Electricity cartel constituted a basis of liability on which the municipality could base its claim for damages. Although the District Court agreed with the municipality that the standard of proof should be mitigated regarding the loss, the Court found that the counterfactual situation without a cartel would most likely have resulted in a price, which was only 3 per cent lower, and the damages were therefore fixed at 50,000 kroner.
The Cheminova A/S case
In January 2015, the Maritime and Commercial High Court rendered a judgment regarding a damage claim caused by a price-fixing and market cartel. The case was about whether Cheminova A/S (Cheminova), a company primarily producing crop protection products, had suffered a loss for which Akzo Nobel Functional Chemicals BV and Akzo Nobel Base Chemicals AB (Akzo Nobel) were liable because of their participation in a price-fixing and market cartel on the market for MCAA (also called chloroacetic acid).
The damages case arose as a consequence of the Commission’s decision of 19 January 2005 in which six Akzo Nobel companies (including the two defendants) were issued with fines for participating in the price-fixing and market cartel during the period from 1986 to 2000.
In the case before the Maritime and Commercial High Court, Akzo Nobel acknowledged the basis of liability, including causation and foreseeability, but denied that Cheminova had suffered a loss. The case was subject to a court-appointed expert survey and valuation, in which the expert assessed, inter alia, which calculation model was most appropriate for calculating potential overprices of the product, the size of the potential overprices and the percentage of Cheminova’s costs, which could be deemed to have been passed on to customers. Cheminova had claimed damages in the amount of 47.2 million kroner. However, the Court found that Cheminova’s total losses amounted to 10.71 million kroner, without specifying any details of the calculation.