On 23 February 2022, the Danish Competition Council (DCC) published a decision on a case in which the association of Peugeot car dealers, Peugeot Forhandler Foreningen (PFF), had collectively boycotted bilbasen.dk, a digital market platform that advertises cars. In its judgment, the DCC stated that the boycott constituted an infringement of section 6 of the Danish Competition Act and article 101(1) of the Treaty on the Functioning of the European Union (TFEU).
Between 2012 and 2014, board members and other members of PFF had collectively decided via email to boycott the digital market platform bilbasen.dk. The emails exchanged stated that the Peugeot dealers had to cease advertising on the platform in order to promote the competing platform biltorvet.dk. The boycott intended to limit competition on the Danish market for digital marketplaces that advertise cars.
PFF relied on a defence on the grounds of pro-competitive effects in accordance with section 8(1) of the Danish Competition Act and article 101(3) of the TFEU. PFF held that the reason for promoting biltorvet.dk had been to ensure that there was a viable competitor to bilbasen.dk, which is the largest platform on the Danish market for digital marketplaces for advertisement of cars. PFF claimed that bilbasen.dk had later lowered their prices and that the boycott had given the platform incentive to improve their services for the benefit of its consumers.
The DCC found that there was a decision within PFF to boycott bilbasen.dk and that association had coordinated its members' actions in this regard. The purpose of the decision had been to restrict competition on the Danish market for digital marketplaces for advertisement of cars. The agreement was, therefore, an agreement to limit competition "by object".
Further, the DCC found that the collective boycott might have had harmful effects on both potential buyers of cars on bilbasen.dk and car sellers advertising on bilbasen.dk. The decision to conduct a collective boycott of bilbasen.dk to promote biltorvet.dk constituted a noticeable restriction of competition in violation of the Danish Competition Act. Network effects within the relevant market may have increased the harmful effects of the collective boycott.
The DCC found that PFF had not sufficiently demonstrated that the decision had brought pro-competitive effects – for example, it had not shown that the prices on bilbasen.dk had been lowered or, if they had, that the collective boycott was the cause. PFF had also not demonstrated improvements on bilbasen.dk in the relevant period, or that the collective boycott was the cause. In addition, PFF did not explain why the boycott was necessary to make biltorvet.dk, which had existed since 2001, a viable competitor to bilbasen.dk. The conditions for an exemption to the ban on anti-competitive agreements according to section 8(1) in the Danish Competition Act and article 101(3) of the TFEU, therefore, had not been fulfilled.
On these grounds, the DCC ruled that PFF had infringed section 6 in the Danish Competition Act and article 101(1) of the TFEU.
The DCC has issued an order to PFF to immediately cease the infringement and to desist from such conduct in the future. In addition, PFF has been ordered to inform its members of the DCC's decision. The matter has also been reported to the police.
This case is an example of a situation where possible pro-competitive effects were not sufficient to constitute an exemption to the prohibition on anti-competitive agreements. It also shows the limitations competition law sets to what associations of undertakings can do to larger digital platforms on a market with network effects. This builds on previous decisions that the DCC has made in two similar cases.
In Boliga.dk, the DCC found an infringement of the Danish Competition Act, as the real estate agents behind the housing portal Boligsiden.dk had agreed to a boycott of the competing housing portal Boliga.dk. In The Association for Auto Repair Shops in Denmark, the DCC also found an infringement, as the organisation had called on their members to boycott the Autobutler.dk portal. As in Boliga.dk, the DCC emphasised that the competitive risk had been removed. Associations of undertakings must be aware of when their conduct amounts to decisions by associations of undertakings and when concerted practices between members constitutes an infringement of competition law.
For further information on this topic please contact Martin André Dittmer or Rebecca Fink Joensen at Gorrissen Federspiel by telephone (+45 33 41 41 41) or email ([email protected] or [email protected]). The Gorrissen Federspiel website can be accessed at www.gorrissenfederspiel.com.