On 9 February 2021 Parliament voted to pass a bill amending the Competition Act. The new legislation has led to substantial changes to Danish procedural and criminal competition law, including an unprecedented right for administrative authorities to fine companies for competition law infringements.
The amendment of the Competition Act is a result of the implementation of EU Directive 2019/1/EU (ECN+ Directive). The ECN+ Directive aims to ensure that national competition authorities (NCAs) have sufficient independence, resources and enforcement tools. Under the directive, EU member states must ensure that NCAs are either able to fine companies (administrative fines) or request fines in non-criminal judicial proceedings (civil fines).
Prior to the amendment of the Competition Act, the Danish courts heard competition cases as either civil or criminal cases. In civil cases, the Danish Competition and Consumer Authority's (DCCA's) substantive decisions on the competition rules were tried, whereas criminal cases regarded the calculation of fines or potential imprisonment for established infringements. Criminal cases are prosecuted by the state prosecutor for serious economic and international crime (SEIC) instead of the competition authorities.
Administrative fines imposed by NCAs are a widely used tool in most EU member states, but not in Denmark. Until now, the Danish competition authorities have been able to fine only:
- in cases with admission of guilt; and
- if the SEIC agrees to the fine.
Cases may be forwarded to the SEIC if the company or natural person does not admit guilt. The SEIC then takes on the case with the purpose of pursuing the infringement under criminal law procedure. Criminal law procedure provides the defendant with essential procedural rights and protection. The burden of proof is on the prosecutor, who must demonstrate the infringement's existence and the indicted party's subjective intention to commit the infringement beyond any reasonable doubts, as follows from the in dubio pro reo principle. The prosecutor is bound by the objectivity principle and therefore obliged to include any facts and circumstances which suggest the indicted party's innocence.
Implementation of administrative fines
The amendments to the Competition Act allow the DCCA to request fines for competition law infringements committed by companies in civil cases before the courts. In civil cases, the burden of proof is on the party making the claim. Where the courts and the prosecutor in criminal cases are bound by the objectivity principle, in civil cases parties must each provide evidence supporting their own allegations. In combination with the exception to the privilege against self-incrimination found in Section 17(b) of the Competition Act, the burden of proof for the competition authorities will be eased when compared with the current burden of proof for the SEIC. Under Section 17(b) of the Competition Act, a company must give information, participate in interviews and give oral explanations, even if it can be used as evidence for competition law infringements.
Customary legal guarantees from criminal law will not be applied to competition law cases. However, the courts must still uphold the guarantees from the EU charter and EU case law, which mainly relate to the presumption of innocence. The European Convention on Human Rights (ECHR) will also apply, which may carry increased importance when the national privilege against self-crimination has been exempted.
The calculation of the fine will to a large degree follow traditional criminal law practice in relation to aggravating or mitigating circumstances. Notably, Section 23(b) of the Competition Act now explicitly states that internal compliance programmes will serve as a mitigating circumstance when it comes to calculating a fine.
The introduction of fines in civil cases will in certain key areas lead to a substantially weakened protection of several essential legal rights of companies. To a larger degree than previously, the courts and practitioners will have to look towards the ECHR and European Court of Justice case law in order to safeguard companies' right to due process in competition cases.
As the existence of an effective internal competition compliance programme will now carry added weight as a mitigating factor in sentencing, corporate management and counsel may consider utilising this by taking a more proactive role in preventing future infringements.
