Cooperative purchasing society guilty of coordinating prices

At the end of 2018 the Competition Appeals Board upheld a decision by the Competition Council, which found that Team DS Amba, a cooperative purchasing society for around 50 camera retailers, had coordinated prices and facilitated the exchange of sensitive information between members.

The coordination and exchange of sensitive information took place:

  • via email;
  • at the annual general meeting; and
  • on an internal electronic bulletin board on which the prices of cameras and accessories were shared.

The prices for new products were announced on the bulletin board, which was customarily followed by a reminder to respect the prices quoted. Further messages urging members to raise prices on specific items and keep profit margins high were shared, as well as multiple messages threatening not to supply online retailers with specific products due to lower online prices.

The Competition Appeals Board found that although the messages were unilateral, they represented Team DS's opinion and as such were decisions by associations of undertakings in the meaning of Article 101 of the Treaty on the Functioning of the European Union. Further, the messages constituted horizontal price fixing – which is a restriction of competition by object – and therefore the Competition Council had not erred by not performing an extensive analysis of the economic and legal context.

The case has been handed over to the state prosecutor for serious economic and international crime with the intention of pressing criminal charges.

The case emphasises that even lawful industry or purchasing associations and societies must be careful and bear in mind that when representing competitors, they must always keep competition law in mind.

Sentencing pattern in demolition industry cartel infringements

During the first months of 2019, the district courts have handed down several judgments regarding cartel infringement in the form of bid rigging in the demolition industry (for further information please see "First Danish cartel case with risk of imprisonment" and "Recent decisions on excessive pricing, abuse of dominance, cartel penalties and gun jumping").

These cases are interesting as the infringements in question took place after the Competition Act had been amended, so that cartel offences of a serious nature are now punishable with prison sentences. At the same time, the fine thresholds for undertakings and individuals were also raised considerably.

Nonetheless, none of the cases led to a prison sentence; instead, fines ranging from Dkr100,000 to Dkr300,000 (approximately €13,400 to €40,200) were imposed.

The prosecutor's office appealed the first judgment in the case that imposed a fine of Dkr100,000, claiming instead that a prison sentence was warranted. The High Court rejected this argument and affirmed the district court's judgment. Subsequently, the High Court judgment has been cited in case law. Thus, it is unlikely that any of the remaining cases will result in prison sentences.

The fines imposed on the infringing companies have been more substantial, with the highest fine amounting to Dkr5 million (approximately €670,000). Thus far, no competition cases in Denmark have resulted in prison sentences.

Fines issued in case concerning minimum resale prices

On 15 February 2019 a district court imposed a fine of Dkr1 million (approximately €134,000) on ICON Hairspa A/S, which distributes and sells exclusive hair products to businesses in Denmark and Norway. The brand Kevin Murphy was among the products sold by ICON Hairspa A/S.

Based on surveillance tapes, text messages and a comparison of website screenshots containing prices before and after 1 March 2016, the district court found that ICON Hairspa A/S had imposed "suggested" resale prices on Kevin Murphy products as minimum resale prices. The court found that the imposition of the minimum resale price had been done either intentionally or as a result of gross negligence by a company executive, who was fined Dkr100,000 for the infringement.

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