In order to increase enforcement efficiency with regard to digital companies, the Danish Competition and Consumer Authority (DCCA) has established a department with a focus on digital platforms. The department has since released an article on competition law concerning digital platforms and the digital economy and found several cases of competition law infringements.
As digital platforms become increasingly popular, new competition law concerns are arising both nationally and globally. Denmark has seen several recent cases in which the competition authorities have found that digital platforms infringed competition law.
Abuse of dominance in digital era
In its article, the DCCA emphasises how vital it is to secure contestable markets in relation to digital platforms and highlights the importance of penalising exclusionary practices. The DCCA cites the 2018 Teller case as an example of digital abuse of dominance (rebates).
On 29 August 2018 the Danish Competition Council (DCC) found that Teller abused its dominant position by using contractual terms with loyalty-inducing effects and excluding competitors from the market, typically through rebates. The Competition Appeals Tribunal upheld the decision, which has subsequently been brought before the Commercial and Maritime Court.
Following the release of the article, on 30 June 2020 the DCC found that FK Distribution abused its dominant position by tying a physical service with a digital service. In 2017 FK introduced a contractual condition after which customers could acquire physical distribution of print circulars only if they also purchased a digital display of the circulars. In Denmark, some advertising material in the form of print circulars is distributed to consumers nationwide. Danish supermarkets in particular make use of this advertising option.
FK is the only national distributor of printed circulars, and the DCC found that FK abused its market power to obtain an advantage on the relatively new market for digital platforms for circulars, as the two services were separate and different.
Anti-competitive agreements on digital platforms
In Summer 2020 the competition authorities found that three digital platforms infringed competition law by engaging in anti-competitive agreements or behaviour.
On 30 June 2020 the DCC ruled that Ageras had engaged in price-fixing conduct. Ageras offers a digital platform, which allows users of professional services (eg, accounting) to connect with the providers of such services. The platform works as a tender process. The user of the service put an assignment out for tender, providers of such service would bid for the assignment and Ageras would present the best bids to the user.
Ageras systematically informed the service providers of an estimated market price via a pop-up. The pop-up showed whenever a provider submitted a bid deemed too low by Ageras (ie, under the estimated market price). The provider then had the option of revising its bid. Further, some of the assignments that Ageras published contained a minimum quote.
On 26 August 2020 the DCCA accepted commitments offered by digital platforms Happy Helper and Hilfr. The two platforms match providers of cleaning services with buyers and advertised minimum hourly fees directly on their platform.
Happy Helper and Hilfr offered commitments in order to meet the concerns expressed by the DCCA: removing the minimum hourly fee from their platform. The DCCA found that the offered commitments met its competition concerns.
Interestingly, the DCCA found that the platforms and service providers in all three cases were separate undertakings from a competition law perspective. However, the DCCA chose to limit the proceedings to the platforms, as they had initiated the agreement or concerted practice by implementing the minimum fees.
Obviously, the digital economy and digital platforms are here to stay. The competition authorities are increasingly placing digital businesses under scrutiny. However, it is interesting that providers of services acquired via digital platforms (eg, cleaning or accounting) risk infringing competition law if they are not wary of the general terms and conditions used by the platform. Further, digital platforms must be aware of what information can be shared with service providers that use the platform.
