Competition lawDownload PDF version
In all material aspects, Danish competition law is similar to EU competition law. However, the Danish regime operates with its own defined de minimis exemptions in relation to both anti-competitive agreements and merger control. The Danish system contains four core subject matters regulated by the Danish Competition Act:
prohibition on anti-competitive agreements;
prohibition on the abuse of a dominant position;
merger control regime; and
Prohibition on Anti-Competitive Agreements
It is prohibited to enter into agreements, regardless of the form, which to some notable extent, directly or indirectly, have as their object or effect to prevent, restrict or distort competition. Although the rule is of a restrictive character, it is interpreted very broadly. The Danish Competition Act prohibits agreements and arrangements such as price fixing and the dividing of markets etc.
The prohibition applies to both horizontal and vertical agreements, but not agreements between companies of the same corporate group.
Price Coordination is prohibited regardless of the companies’ size/market as are agreements on coordination of prices and other “hardcore” measures. Other agreements are subject to certain de minimis requirements.
In addition to the specific de minimis exemptions, the prohibition against anti-competitive agreements does not apply to agreements or any other behaviour that have beneficial impact on the society and consumers as long as it does not inflict any unnecessary restrictions and it does not give the undertakings the possibility of barring competition.
Prohibition of Abuse of a Dominant Market Position
A dominant position alone is not prohibited, only the abuse of a dominant position is prohibited. When determining whether an undertaking has a dominant position, an important criterion is the undertaking’s market share of the relevant market as distinguished by differentiation of products and geography.
Mergers, acquisitions or joint ventures with a permanent function of an independent undertaking must be notified to the Danish Competition Council (in Danish “Konkurrencerådet”) when certain thresholds are met. The notifying parties must await the Competition Council’s decision before completing the transaction.
Uncomplicated transactions may be approved quickly, but when it comes to more complex transactions, the Council have up to 25 (or even 90 days if detailed investigations are required) to render their decision.
As of 1 August 2013, fees based on the participating companies’ annual overall turnover in Denmark will be introduced for a simplified merger application.
Any aid granted by an EU member state or through state resources in any form which distorts or threatens to distort competition by favouring certain undertakings, or the production of certain goods is incompatible with the common market. Where any private undertakings have received illegal state aid, they must return it.
The Danish Competition Council may issue decisions that require private undertakings to pay back state aid or make the state aid desist. It is a requirement that the effect of the state aid is given for the advantage of an undertaking, meaning that the aid would not have been given by a private investor acting in accordance with common market economics.
The Danish Competition Council and the Danish Competition Authority are the relevant competent authorities in Denmark.
Decisions from the Danish Competition Council may be appealed to the Danish Competition Appeals Tribunal (in Danish: “Konkurrenceankenævnet”). A prerequisite for litigating a decision made by the Competition Council in a Danish civil court is that the Competition Appeals Tribunal has reviewed the decision.
The Danish Competition Council may at their own initiative issue orders directing undertakings to refrain from any prohibited behaviour, dissolving agreements and so forth.
Also, undertakings may ask the Competition Council for a binding order (“negative clearance”). Such an order ensures that a particular agreement or commercial behaviour is in compliance with the Act.
Any gross negligent or intentional infringement of the Danish Competition Act is a criminal offense and will result in significant fines.
In the spring of 2013, a supplement to fines was introduced. Cartels are now punishable by imprisonment of up to a year and a half. In particularly serious cases, and under aggravating circumstances, the penalty may increase to six years.
A special plea bargaining exemption applies to “whistleblowers” entering into a cartel agreement in violation of the Act, provided that the whistleblower discloses new and not already known information to the authorities. The first violating undertaking in a cartel that contacts the relevant competition authorities, discloses information about the cartel and fulfils certain additional, specific conditions, may avoid penalties or have its fines reduced.
The above does not constitute legal counselling and Moalem Weitemeyer Bendtsen does not warrant the accuracy of the information. With the above text, Moalem Weitemeyer Bendtsen has not assumed responsibility of any kind as a consequence of a reader’s use of the above as a basis of decisions or considerations.