Resale Price Maintenance (RPM) in Denmark
Danish competition law
Since 2004, the Danish Competition Act has included a provision (section 6(2)(7)) prohibiting undertakings from entering into agreements made to:
“[…] determine binding resale prices or in other ways seek to induce one or more trading partners not to deviate from recommended resale prices.”
Following the provision above, binding resale prices are illegal together with recommended resale prices if they directly or indirectly lead to a fixed price. Minimum price settings are also considered illegal. However, maximum price setting is not regarded as unlawful, if it does not induce the retailer to not deviate from it.
Danish case law on RPM
Before the 2004 revision of the Competition Act, the regulation of RPM was based on case law. Whether the change to being an explicit part of the Competition Act caused RPM to be a hot topic is hard to say, but the facts are that during the last decade (September 2012 to September 2022) approximately 25 Danish cases involved RPM, making it one of the “popular” themes in Danish competition law cases.
The fines issued in some of the cases concerning RPM illustrate how serious an infringement the Danish Competition and Consumer Authority (the DCCA) considers illegal RPM to be. For example, a case from 2022, which involved recommended resale prices:
- Decision by the DCCA of 23 February 2022, HTS Besafe: The case concerned an anticompetitive vertical agreement between HTS Besafe and its resellers to use the recommended retail prices. Specifically, the resellers were prevented from selling car seats and sleeping bags for babies and children with discounts. The DCCA found this to be a severe infringement of the Competition Act. Considering the duration and the gravity of the violation as well as the company’s turnover, the DCCA issued a fine of DKK 8 million to HTS Besafe. Agreements regarding resale price maintenance and limitation on online promotion are considered a serious infringement leading to fines between DKK 4 to 20 million according to the Danish Competition Act.
RPM may also lead to personal fines to managers as illustrated by the following case:
- Decision by the Special Crime Unit of 15 October 2021, Konges Sløjd: The Danish Special Crime Unit fined the Danish manufacturer of babies’ and children’s clothing, Konges Sløjd. The case concerned an anticompetitive vertical agreement between Konges Sløjd and a reseller to use the recommended retail prices. The Danish Special Crime Unit imposed a fine of DKK 1.8 million on Konges Sløjd as well as a fine of DKK 100,000 on a member of the management of Konges Sløjd.
Most of the cases that concern binding resale prices are cases where the defendant plead guilty and accept the fine issued by the DCCA and include minimal descriptions of the illegal conduct. Moreover, the majority of these cases also concern an agreement setting a fixed price or a minimum price, where there is little room for debate on the illegality of the practice.