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03 October 2019
Cartel cases closed with personal fines
Management accepts fine for price coordination
Non-notification of merger
Several fines were handed out during the Summer of 2019 for Competition Act infringements. This article highlights the most important cases.
A number of parties accepted fines over the summer for their part in cartel activity. A group of cases regarding bid rigging in the demolition and plumbing industries were settled with fines issued to companies and management.
The first group of cases concerned the demolition industry. In Autumn 2015 the Competition and Consumer Authority inspected a number of companies in the demolition industry. Based on the inspections and further investigation, in April 2016 the Competition Council decided to hand over the case to the state prosecutor for serious economic and international crime. The state prosecutor investigated the cases and initiated criminal proceedings.
Over the summer, G Tscherning A/S, Villy C Petersen Entreprise A/S and Brandis A/S accepted fines totalling Dkr6.4 million (€853,333) for exchanging prices with competitors. Further, three managers accepted fines totalling Dkr375,000 (€50,000). The cases against three other demolition companies and eight managers were settled through court fines, while cases against two companies and four managers are under appeal (for further details please see "First Danish cartel case with risk of imprisonment", "Recent decisions on excessive pricing, abuse of dominance, cartel penalties and gun jumping" and "Recent restrictive agreement decisions").
The second group of cases concerned the plumbing industry and was also settled with the acceptance of fines. The infringement concerned bid rigging in 2013. Fines totalling Dkr1.75 million (€233,333) were issued to three companies and their management. Fredensborg VVS Teknik A/S, Christoffersen & Knudsen A/S and Sanoterm Danmark A/S accepted fines of Dkr1.575 million (€210,000), while four managers accepted fines worth a total of Dkr175,000 (€23,333), including a fine of Dkr100,000 (€13,333) issued to a former manager of Sanoterm Denmark A/S, which closed this set of cases.
The 2013 preparatory works for the Competition Act states that less serious infringements by companies should be punished with fines of up to Dkr4 million (€533,333), whereas serious infringements should be punished with fines of Dkr4 million (€533,333) to Dkr20 million (€2,666,666). For personal fines, the preparatory works states that natural persons should be fined Dkr50,000 (€6,666) for less serious infringements and Dkr100,000 (€13,333) for serious infringements.
Prior to the increase in fine levels in 2013, fines were determined in accordance with the 2002 preparatory work for the Competition Act. Twelve fines were issued to persons between 2002 and 2012 (none above Dkr25,000), whereas 15 personal fines have been issued in 2019 to date. This shows that the amount and frequency of fines issued to management have increased noticeably since the amendment to the Competition Act came into force in 2013.
At the end of 2018, the Competition Appeals Board upheld a Competition Council decision which had found that the Danish association of camera distributors, Team DS amba (a cooperative purchasing society consisting of approximately 50 camera retailers), had coordinated prices and facilitated the exchange of sensitive information between its members (for further details please see "Recent restrictive agreement decisions").
On 6 August 2019 Team DS amba agreed to pay a fine of Dkr1.3 million (€174,300) for its infringement and a manager agreed to pay a fine of Dkr100,000 (€13,400). The size of Team DS's fine reflected the association's ability to pay.
The case emphasises that industry or purchasing associations and societies must be careful and keep competition law in mind when representing competitors, as the amount and frequency of fines issued to companies and personnel is steadily increasing.
On 29 May 2019 Circle K Denmark A/S agreed to pay a fine of Dkr6 million (€800,000) for infringing merger control rules. The infringement concerned the non-notification of a merger to the Competition and Consumer Authority.
In 2016 Circle K Denmark A/S acquired 72 service stations under the Shell trademark from 12 individual lessees. The acquisition was not included in the European Commission's approval of Circle K Denmark A/S's takeover of parts of Shell's Danish activities.
The size of the fine reflected the gravity and duration of the infringement, as well as the company's turnover. A mitigating factor was that Circle K had contacted the Competition and Consumer Authority regarding the matter. Circle K subsequently reported the merger to the Competition and Consumer Authority and the merger was approved in October 2018.
The case is notable because fines are seldom issued in merger cases. Fines relating to merger control infringement mostly concern a lack of or misleading information; however, in this case, the importance of considering jurisdiction is clear, as a structural remedy accepted by the European Commission was subject to national jurisdiction and should have been notified.
For further information on this topic please contact Martin André Dittmer or Thomas Skou at Gorrissen Federspiel by telephone (+45 33 41 41 41) or email (email@example.com or firstname.lastname@example.org). The Gorrissen Federspiel website can be accessed at www.gorrissenfederspiel.com.
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