Sanctions

Criminal sanctions

What, if any, criminal sanctions are there for cartel activity?

Criminal sanctions may be imposed on individuals where an intentional or grossly negligent infringement of competition law is established. Sanctions on undertakings are civil.

When meting out a penalty, consideration must be given to the gravity and duration of the infringement. Under the amended sanction regime of 2013, the gravity of the infringement will be defined as either less grave, grave or very grave. The indicative level for fines imposed on individuals for cartel behaviour (very grave) is a minimum of 200,000 krone. It should be noted that the courts have considerable discretion when imposing fines.

As of 1 March 2013, imprisonment may be imposed on individuals in cartel cases if their participation in the cartel has been intentional and if the breach has been of a grave nature, especially owing to the extent of the infringement or its potentially damaging effects. The maximum term of imprisonment is usually one and a half years but may be increased up to six years in case of aggravating circumstances. The courts have yet to impose the first prison sentence for cartel participation, but prison sentences are, when relevant, expected to be imposed on members of the board or the management. The State Prosecutor for Serious Economic and International Crime (the State Prosecutor) has, unsuccessfully, asserted claims for unconditional imprisonment in cartel cases as seen in, inter alia, the Danish Eastern High Court judgment of 21 December 2018 and in two cases concerning bid rigging between demolition contractors (the District Court of Hilleroed judgment of 11 January 2019 and the District Court of Roskilde judgment of 4 April 2019).

Sections 81 and 82 of the Danish Criminal Code list a number of aggravating and mitigating circumstances to take into account when deciding on the level of a sanction.

Civil and administrative sanctions

What civil or administrative sanctions are there for cartel activity?

Following the amendment of the Danish Competition Act (the Act) of 4 March 2021, due to the implementation of Directive 2019/1EU of 11 December 2018 (the ECN+ Directive), the sanctions on undertakings for cartel activity are civil. In cases where undertakings intentionally or negligently infringe competition law, the competition authorities may request the courts to impose fines in accordance with civil procedure.

When meting out the level of a fine, the gravity of the infringement and its duration must be taken into account (cf section 23b(1) of the Act). Further, the undertaking's worldwide group turnover of the previous financial year must be considered. According to Section 23b(4) of the Act, fines should not exceed 10 per cent of the undertaking's worldwide group turnover. Section 23b further mentions a list of aggravating and mitigating circumstances to consider when deciding on the level of the fine.

Under the amended sanction regime of 2013, the gravity of the infringement will be defined as either less grave, grave or very grave. The indicative level for fines imposed on undertakings for cartel behaviour (very grave) is more than 20 million krone. It should be noted that the courts have considerable discretion when imposing fines.

Of administrative sanctions, the Danish competition authorities may offer undertakings a fine in lieu of prosecution. Further, the Director General of the Danish Competition and Consumer Authority (DCCA) may impose daily or weekly penalty payments in accordance with section 22 of the Act, if a party fails to submit information requested by the DCCA.

Guidelines for sanction levels

Do fining or sentencing principles or guidelines exist? If yes, are they binding on the adjudicator? If no, how are penalty levels normally established? What are the main aggravating and mitigating factors that are considered?

When meting out a criminal penalty, consideration must be given to the gravity and duration of the infringement. The gravity of the infringement will be defined as either less grave, grave or very grave. The indicative level for fines imposed on legal persons for cartel behaviour is more than 20 million krone, while the indicative level for individuals for cartel behaviour (very grave) is a minimum of 200,000 krone. It should be noted that the courts have considerable discretion when imposing fines. Sections 81 and 82 of the Danish Criminal Code list a number of aggravating and mitigating circumstances to take into account when deciding on the level of a sanction.

In civil cases, when meting out the level of a fine, the gravity of the infringement and its duration must be taken into account (cf section 23b(1) of the Act). Further, the undertaking's worldwide group turnover of the previous financial year must be considered. According to Section 23b(4) of the Act, fines should not exceed 10 per cent of the undertaking's worldwide group turnover. Section 23b further mentions a list of aggravating and mitigating circumstances to consider when deciding on the level of the fine.

Compliance programmes

Are sanctions reduced if the organisation had a compliance programme in place at the time of the infringement?

According to Section 23b(3)(iii) of the Act, when assessing the level of a fine, it is a mitigating factor if the undertaking has actively tried to ensure all relevant employees' compliance with the Act through compliance programmes or similar measures. The compliance programme must have been in place at the time of the offence and the undertaking or person must in fact have made efforts to ensure compliance with the competition rules.

Director disqualification

Are individuals involved in cartel activity subject to orders prohibiting them from serving as corporate directors or officers?

The Act does not warrant disqualification of individuals involved in cartel activity. 

Debarment

Is debarment from government procurement procedures automatic, available as a discretionary sanction, or not available in response to cartel infringements?

Under section 137(1)(4) of the Danish Act on Public Procurement (based on Directive No. 24 of 26 February 2014 of the European Parliament and of the Council on Public Procurement), it is possible for a contracting authority to exclude a company from participation in a procurement procedure if the contracting authority has sufficiently plausible indications to conclude that the company has entered into agreements aimed at distorting competition and if the contracting authority has stated in the contract notice that participation in such anticompetitive behaviour leads to exclusion.

The contracting authority has decision-making powers. The decision is usually a discretionary sanction but under certain circumstances debarment is mandatory. The usual duration of debarment is two years from the date when the relevant anticompetitive behaviour ended. The company has the right to take self-cleaning measures and demonstrate its reliability despite the existence of the said ground for exclusion. If the self-cleaning measures are considered sufficient, the company cannot be excluded from the procurement procedure.

Any questions in this regard can be brought before the Danish Complaints Board for Public Procurement.

Parallel proceedings

Where possible sanctions for cartel activity include criminal and civil or administrative penalties, can they be pursued in respect of the same conduct? If not, when and how is the choice of which sanction to pursue made?

Up until the implementation of the ECN+ Directive, civil and administrative fines did not exist under Danish competition law. As of 4 March 2021, sanctions for undertakings are civil fines imposed in accordance with civil procedure, while sanctions for individuals are criminal fines (or imprisonment) imposed in accordance with criminal procedure and led by the State Prosecutor. There can be no parallel proceedings on cartel activity for the same conduct by both the competition authorities and the State Prosecutor. The choice of sanction depends on whether the infringing party is an undertaking or an individual.