Panic at the disco! Danish nightclubs fined for horizontal agreements to not open competing nightclubs
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Several Danish nightclubs have agreed to pay fines for entering into agreements to not open nightclubs in the same cities or within 20 kilometres of each other. Despite the agreements having been ongoing for more than 15 years, the fines imposed on the nightclubs were very low because of low turnovers in 2020 due to the COVID-19 restrictions.
At the end of 2021, the Danish Competition and Consumer Authority (“DCCA”) initiated investigations into nightclubs that had allegedly entered into anti-competitive agreements by members of a joint purchasing network operated by several Danish nightclubs. The members of the network agreed to not establish competing nightclubs in each other’s cities or within 20 kilometers of each other, leading to a horizontal market allocation scheme.
Remarkably, the infringements have had a duration of up to up to 15 years and 10 months.
At present, a total of 22 nightclubs have admitted to participating in the anti-competitive agreements. The fines range between DKK 28,000 and DKK 278,000 (approximately € 3,750-37,500).
Generally, the fines are relatively low compared to fines for similar violations. A large part of the reason for this is that the fines may only account for a maximum of 10 percent of the company's total revenue in the previous year (i.e. 2020). In this specific year, the turnover of the companies in question was very low as nightclubs were closed for most of the year due to COVID-19 restrictions. Thus, in relation to the calculation of the level of fines, the nightclubs benefitted from the restrictions.
It is also worth noting that this is the first time that the Danish Competition Council itself has imposed fines as a part of a settlement procedure following the amendment of the Danish Competition Act. Up until this change, the Competition Council and the DCCA were not able to impose fines, as this power was reserved for the Public Prosecutor for Special Economic and International Crime (“SØIK”).
The press release by the DCCA can be found here (in English).
For more information please contact Morten Nissen or Alexander Brøchner.
