Enforcement proceedings

Enforcement authorities

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

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, public and private enterprise, 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). 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 of 1 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.

As opposed to the European Commission, the Competition and Consumer Authority is, however, not allowed to conduct dawn raids in private homes.

The Danish State Prosecutor for Serious Economic and International Crime (the police) may conduct inspections in private homes under certain conditions.

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 a contract 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, commitments made by an undertaking can be made binding.

Structural remedies have not been used in cases concerning abuse of a dominant position, and orders issuing structural remedies will most likely fall outside the scope of section 16 of the Competition Act.

According to 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. 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 to 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.

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.

There is no leniency programme concerning abuse of dominance.

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 a case from 2006, Arla Foods was issued a fine of 5 million kroner for having paid one of its customers - a supermarket - a ‘marketing contribution’ to a campaign in exchange for the supermarket removing the products of one of Arla Foods’ competitors from its selection. Up to the time of writing, the case is the only instance in which a fine for abuse of dominance has been imposed under Danish law.

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 to 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 Danish State Prosecutor for Serious Economic and International Crime in order for a fine to be imposed.

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 commitments 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.

The Post Danmark I case (see also C-209/10) from 2013 and Post Danmark II case (see also C-23/14) have undoubtedly been the most high-profile abuse cases in Denmark in recent years.

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 Tribunal may take between six and 12 months.

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.

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.