Enforcement proceedings

Enforcement authorities

Which authorities are responsible for enforcement of the dominance rules and what powers of investigation do they have?

The Danish Competition and Consumer Authority (the DCCA) is, as secretariat for the Council, responsible for the day-to-day case administration of the Competition Act and prepares and presents cases for the Council to decide. The DCCA is entitled to make decisions on behalf of the Council in minor cases and cases based on existing case law, whereas the Council decides all cases of general public and fundamental importance, including cases in which a precedent has not yet been set.

The Council is composed of seven members appointed by the Minister of Business. The Council represents versatile knowledge within competition matters and public and private enterprises, including legal, economic, financial and consumer-oriented affairs.

Decisions rendered by the DCCA and the Council are subject to appeal before the Tribunal, which is the highest administrative body. The Tribunal consists of five members, of which the chairperson is a Supreme Court judge and the four other members generally are legal and economic experts.

Under section 18 of the Competition Act, the DCCA may conduct unannounced inspections at the premises of an undertaking or a public authority – ‘dawn raids’ – in order to gather information about suspected competition violations. The DCCA is authorised to make copies of any information or documents found on the business premises regardless of the information medium (ie, digital and physical documents, computers, phones). The DCCA is also authorised to request oral statements and to demand that persons within the scope of the investigation show the contents of their pockets, bags etc so that the DCCA may obtain knowledge of the contents and, if necessary, make copies thereof.

Prior to carrying out a dawn raid, the DCCA must obtain a court order, which establishes the boundaries for the scope of the dawn raid and prevents the DCCA from gathering any information outside of the stated scope.

As a consequence of the adoption of EU Directive 2019/1 of 11 December 2018 (ECN+ Directive), the DCCA will, going forward, also be authorised to conduct dawn raids on other premises, for example private homes, if there is reasonable suspicion that proof of the undertaking´s suspected competition violation are kept in such premises. The power to inspect other premises will apply under Danish competition law no later than 4 February 2021 as a result of the implementation of the ECN+ Directive, cf section 18 a of the (currently proposed) amended Danish Competition Act.  Up until now, the DCCA has, as opposed to the European Commission, not been allowed to search other premises than those of the undertaking in question.

If there is reasonable suspicion that an individual has contributed to an undertaking’s violation of the competition rules and proof thereof are being kept in premises accessible to this individual, for example, his or her private home, the Danish State Prosecutor for Serious Economic and International Crime (the police) will conduct the inspection provided certain conditions are met. The DCCA may be present during such inspections, but only the police are authorised to carry on investigations with the purpose of criminal prosecution of individuals, cf Section 18 a (3) of the (currently proposed) amended Danish Competition Act.

As another consequence of the implementation of the ECN+ Directive, the DCCA will be authorised to request information, carry out inspections and interviews on behalf of and for the account of other national competition authorities within the European Union. The duty to actively assist other national competition authorities within the union will as well be implemented in Danish law no later than 4 February 2021, cf section 18 b of the (currently proposed) amended Danish Competition Act.

According to a Nordic agreement on cooperation in competition matters from January 2018, the DCCA is also authorised to render dawn raids to assist the competition authorities in Sweden, Norway, Finland, Iceland, Greenland and the Faroe Islands in connection with the application of national (ie, non-Danish) competition rules by these authorities.

Sanctions and remedies

What sanctions and remedies may the authorities impose? May individuals be fined or sanctioned?

Pursuant to section 11(4) of the Competition Act, the DCCA may issue a range of orders to terminate an existing infringement of section 11. Examples of such orders follow from the non-exhaustive list in section 16(4), and include, for instance, an order for termination of an agreement or amendment of trading terms, granting access to certain infrastructure facilities and pricing below a certain level. Acting upon any concerns the authorities may have in relation to section 11, the DCCA can make commitments made by an undertaking binding.

Structural remedies have not been used in cases concerning abuse of a dominant position and generally, the issuance of structural remedies have been considered to fall outside the scope of section 16 of the Competition Act. However, due to the implementation of the ECN+ Directive, section 16 will explicitly allow for structural remedies as per 4 February 2021.

According to the current section 23 of the Competition Act, a person or an undertaking may be fined if, intentionally or by gross negligence, that person or undertaking abuses its dominant position. Due to the adoption of EU directive 2019/1 of 11 December 2018 (ECN+ Directive), the Danish government has put forward a legislative proposal, which entails considerable amendments to the imposition of fines compared to the Danish Competition Act now in force. Under the current regime, fines are imposed solely in criminal proceedings, where a court imposes the fine based on the competition authorities’ material decision. The criminal case is led by the State Prosecutor and not the competition authorities. However, as of 4 February 2021, the DCCA may request the court to impose fines in civil proceedings if  an undertaking intentionally or negligently infringes the competition rules, cf (currently proposed) amended section 23-24 of the Danish Competition Act. Individuals who participate or contribute to infringements will nevertheless still be subject to criminal prosecution, cf also (currently proposed) amended section 23 (6) of the Danish Competition Act.

Abuse of a dominant position is not punishable by imprisonment under Danish legislation. In meting out a fine, section 23(5) of the Competition Act and the preparatory works for the provision state that consideration must be given to the gravity of the infringement, the duration of the abusive conduct, and the turnover of the undertaking in question. ‘Turnover’ is understood as group turnover and not the turnover solely related to the infringing firm. 

There is no leniency programme concerning abuse of dominance.

In assessing the gravity of the infringement, an abuse will fall within one of three categories with the following basic fine levels:

  • minor infringement: up to 4 million kroner;
  • serious infringement: between 4 million and 20 million kroner; and
  • very grave infringement: more than 20 million kroner.

 

In addition, individual fines may be issued to members of management or other employees in key positions who have either participated in the infringement or have failed to act against anticompetitive conduct of which they had knowledge. An individual fine may span from 50,000 to 200,000 kroner depending on the severity of the infringement. In very grave circumstances, a fine may exceed 200,000 kroner.

In December 2019, the City Court of Copenhagen fined Falck 30 million kroner for abuse of Falck’s dominant position on the Danish market for ambulance services. This is the largest fine ever imposed in Denmark for abuse of dominance and for violation of the Competition Act in general. The fine may be seen as an important new benchmark for upcoming cases.

Enforcement process

Can the competition enforcers impose sanctions directly or must they petition a court or other authority?

The DCCA and Council decide whether there are sufficient grounds to investigate a case and may issue orders for dominant undertakings to end an existing violation of section 11 or to prevent future violation.

The Council decides whether a case should be forwarded to the State Prosecutor, who decides whether criminal proceedings should be initiated. The court decides if a fine should be imposed in accordance with criminal procedure under Danish law.  

Under the current regime, administrative fines may only be imposed directly by the DCCA in cases, where the alleged undertaking pleads guilty. If the undertaking accepts the notice and pleads guilty, the case will be closed without court proceedings.

As of 4 February 2021, the DCCA may request the court to impose fines in civil proceedings if an undertaking intentionally or negligently infringes the competition rules, cf (currently proposed) amended section 23-24 of the Danish Competition Act. The new civil fine regime is a consequence of the adoption of EU Directive 2019/1 of 11 December 2018 (ECN+ Directive).

For criminal prosecution of physical persons, the case must be forwarded to the State Prosecutor. The State Prosecutor then decides whether criminal proceedings should be initiated, and the potential imposition of a sanction is decided by the courts in accordance with criminal procedure under Danish law.

Enforcement record

What is the recent enforcement record in your jurisdiction?

The DCCA receives numerous complaints regarding alleged abuse of a dominant position on a yearly basis. Of these complaints, only a limited number of cases are pursued, and many cases are closed by way of commitments made by the undertaking. Thus, the Danish competition authorities rule on abuse in no more than one or two cases a year (recently even fewer than that).

The Danish competition authorities generally strive to follow the Guidance Paper on the European Commission’s enforcement priorities in applying article 102 of the TFEU to abusive exclusionary conduct. So far, however, the competition authorities have not based any decisions exclusively on the Guidance Paper and have only referred to it to the extent that is has been found compliant with existing law.

It is not possible to give certainty as to the expected duration of a case before the competition authorities. However, as a rough estimate, a case before the DCCA or the Council typically takes between two and three years, whereas a case before the Danish Competition Appeals Tribunal (the Tribunal) may take approximately 10-12 months.

The Post Danmark I case (see also C-209/10) from 2013 and the Post Danmark II case (see also C-23/14) have undoubtedly been the most high-profile abuse cases in Denmark in recent years. The most interesting recent case is the large fine of 30 million kroner, which was imposed on Falck in December 2019 for abuse of Falck’s dominant position on the Danish market for ambulance services.

Contractual consequences

Where a clause in a contract involving a dominant company is inconsistent with the legislation, is the clause (or the entire contract) invalidated?

The Competition Act does not regulate the (whole or partial) validity of a contract or a certain provision in the contract found to be in breach of section 11 of the Act.

However, a provision expressly breaching the prohibition against abuse of a dominant position will generally not be enforceable under Danish contract law, while the invalidity of a provision will usually not cause the whole contract to become invalid.

Private enforcement

To what extent is private enforcement possible? Does the legislation provide a basis for a court or other authority to order a dominant firm to grant access, supply goods or services, conclude a contract or invalidate a provision or contract?

The Competition Act allows for private parties to enforce section 11. Nonetheless, private enforcement has not played a significant role in cases concerning abuse of dominance in the past.

Firstly, it is free to file a complaint with the competition authorities, whereas court proceedings are costly. Secondly, competition authorities will have easier access to information from third parties regarding the relevant market, as well as information from the dominant undertaking subject to the complaint. The DCCA and the Council may demand all the information, including accounting records, business documents and electronic data that it deems necessary for deciding whether section 11 applies to certain conduct. Failure of a party to comply with such requirements may lead to a fine.

Damages

Do companies harmed by abusive practices have a claim for damages? Who adjudicates claims and how are damages calculated or assessed?

The right to damages for loss owing to a violation of Danish or EU competition rules is governed by the Danish Act on Damage Claims for Infringements of Competition Law (implementing EU Directive 2014/104), which entered into force in December 2016.

The Damage Claims Act implements several requirements that EU member states are obliged to fulfil with the aim of ensuring effective exercise of the right to compensation for competition law infringements throughout the EU. According to section 3 of the Act, any natural or legal person who has suffered harm caused by an infringement of Danish or EU competition law has the right to obtain full compensation for that harm in accordance with the Act on Damage Claims for Infringements of Competition Law.

It is expected that the new act will generate more damages claim cases in Denmark.

Appeals

To what court may authority decisions finding an abuse be appealed?

A decision made by the Council or the DCCA may, as a general rule, be appealed to the Tribunal within four weeks after the party in question has been notified of the decision. The Tribunal’s decision cannot be appealed to another administrative body but may be brought before the courts no later than eight weeks after the party in question has been notified of the decision. 

Law stated date

Correct as of

Give the date on which the information above is accurate.

13 January 2021