At the end of 2021, the Danish Competition Council announced that it had imposed fines on 18 discos and their joint procurement company. Subsequently, the Competition Council has imposed fines on four additional discos. All the involved companies acknowledge having violated the Danish Competition Act. The violation concerns a cartel cooperation obligating them not to compete in each other’s areas.
The discos’ violation of the Danish Competition Act
A number of Danish discos and their joint procurement company, Nox Network ApS, had entered into a so-called gentleman’s agreement not to open branches in each other’s cities/municipalities or within a distance of 20 km from each other. The obligation was part of the terms a disco accepted as a member of Nox Network ApS.
On this basis, the Danish Competition Council found that the discos and Nox Network ApS have grossly violated the Danish competition rules by entering into anti-competitive agreements (a cartel). Nox Network ApS and the 22 discos have acknowledged the violation. The cartel cooperation existed for periods of one year and nine months and up to 15 years and 10 months.
The fines amount to DKK 28,000 – 278,000 and are therefore very low, but in this case for good reasons. The fines are set based on an assessment of the violation (how serious), the duration and the turnover of the companies. The violations were categorised as very serious or as a minimum as serious, which generally result in a fine of minimum DKK 4 million.
However, the fines can maximum amount to 10 % of the company’s group turnover for the preceding financial year – in this case the baseline was 2020. Due to the discos’ very limited turnover during Covid-19 in 2020, the fines are very low.
The Danish Competition Council’s first fine
On 9 February 2021, the Danish Parliament adopted a bill concerning an amendment of the Danish Competition Act and the Danish Criminal Code. This introduced a new civil fine system in competition law infringement cases. Since 4 March 2021, when the amendment of the Competition Act came into force, the Competition Council has therefore been able to impose fines on companies and bring cases regarding sanctions before the courts.
This case-complex was the first cases, where the Competition Council imposed fines.