On 6 November 2019 the Competition Appeals Tribunal (CAT) upheld a decision by the Competition Council. The council's decision found that two outdoor advertising companies, Clear Channel Danmark A/S and AFA JCDecaux A/S, had coordinated discount rates through an agreement. The council found that this anti-competitive behaviour had continued as a concerted practice several years after the agreement had expired.
'Outdoor media' is an advertising medium that covers a wide variety of products, including:
- 'city equipment' (eg, information boards, telephone poles and signs at bus stops);
- media on transport services (eg, information boards on buses, trains, metros and in airports);
- media in and around supermarkets; and
- freestanding billboards.
The physical placement of outdoor media is called the 'media spot'. Media spot owners put out tenders for their spots, and winning bidders can use the media spot to place ads for a given period. Media providers bid on such media spots. When a bid is successful, media providers sell the right to advertise on the media spot for shorter periods to media or advertising agencies.
Clear Channel and AFA JCDecaux both sell outdoor advertising spots. Clear Channels' business consists mainly of billboards, city equipment and ads in the Copenhagen metro. AFA JCDecaux's business consists mainly of billboards, city equipment and ads in and around supermarkets, train stations and airports.
The Competition Council found that Clear Channel and AFA JCDecaux had entered into written agreements between 5 September 2008 and 31 December 2010 regarding the rates on media commission, security payment, information commission and a cash rebate. In the case before the CAT, the CAT had to decide whether:
- the agreements were anti-competitive or necessary considering the market; and
- the alleged anti-competitive infringement had ended when the written agreements did.
The CAT found that the agreements between 5 September 2008 and 31 December 2010 were anti-competative, in violation of Danish competition law. The CAT attached no importance to the fact that the parties had neither upheld nor necessarily adhered to the agreements; in fact, the parties often derogated from the rates.
The CAT then considered whether the agreement had ended on 31 December 2010, noting that the last agreement concerned the 'Provision of Outdoor media 2010'.
The CAT concluded that the agreement had ended after 31 December 2010. However, the CAT found that the practice had continued as a concerted practice, despite the fact that the agreement had expired in 2010. The CAT based this assessment on the contact between the companies in 2009.
The CAT concluded that:
- Channel Clear and JCDecaux had engaged in anti-competitive coordination; and
- the coordination did not cease with the end of the agreement on 31 December 2010.
On the above grounds, the CAT upheld the Competition Council's decision.
This decision provides an interesting takeaway, in that the CAT emphasised that the parties must have had contact for there to be a concerted practice, and thus a competition law infringement after 2010. Hereafter, the CAT refers to contact from 2009, and concluded that the parties had no incitement to change, which led to the conclusion that the concerted practice existed.
The case has been referred to the state prosecutor for serious economic and international crime with a view to press criminal charges.
This article was first published by the International Law Office, a premium online legal update service for major companies and law firms worldwide. Register for a free subscription.
