When the gloves come off: Member of chain of independent clothes stores to be fined directly by the Danish competition authority under new powers

Botex is a nationwide, voluntary chain of textile resellers, consisting of 24 independent members, each of which owns shares in Botex as well as one or more Botex stores. 

In the rules governing trade within Botex, it was agreed that each member was assigned a “marketing area” defined by postal codes and that members were not allowed to distribute advertisements to households in the areas assigned to other members. This agreement was in place for more than 12 years between May 2009 and August 2021. 

The DCC considered that the ban on advertising constituted a horizontal market-sharing agreement between competitors. Moreover, the DCC found that this constituted a ‘by object’ restriction of competition. 

The DCC consequently instructed Botex to immediately cease its unlawful conduct and to refrain from similar conduct in the future. 

Additionally, the DCC decided to bring proceedings in front of the Maritime and Commercial High Court seeking to impose a fine upon Botex. 

Interestingly, this will be the first time following the amendment of the Danish Competition Act that the DCC will make use of its newly granted powers to bring cases before the courts to impose fines on companies. 

For an overview of the recent changes to the Danish Competition Act, where the ECN+ directive was implemented, please refer to Bird & Bird’s previous article on this.  

The decision by the DCC can be found here, and the press release concerning the decision can be seen here (In Danish).

For more information please contact Morten Nissen or Alexander Brøchner.