Denmark: Playing with prices is a dangerous game: Large Danish voluntary chain store of kids’ equipment breaches competition law
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The Danish Competition Council (“DCC”) has issued a decision finding that the Danish retail chain, Ønskebørn, has infringed the Danish competition law by coordinating prices of children’s equipment.
Ønskebørn is a nationwide retailer of children toys, interior, carriages, etc. Ønskebørn is organized as a voluntary chain consisting of several individual members, which cooperate on several matters, including joint purchasing through the chain-company.
The DCC found that Ønskebørn is a voluntary chain in which each individual member is to be considered as an independent undertaking in relation to competition law. This entails that the members shall, without regard to the cooperation in the voluntary chain, act independently when deciding on essential parameters of competition, as in this case prices.
In a period from October 2016 to November 2018 Ønskebørn coordinated prices on products from the company’s own product category and exclusive products. In a shorter period during spring 2020 the coordination took form as a coordination of prices on products categorized as “other products”. The price coordination was conducted as a coordination set out from the chain-company to the individual members.
By coordinating prices, Ønskebørn has restricted competition amongst its members. The DCC assessed that the conduct might have negatively impacted the consumers of Ønskebørn.
The conduct was discovered in November 2020 when the Danish Competition and Consumer Authority (“DCCA”) carried out an unannounced inspection at Ønskebørn, during which the DCCA found evidence indicating that Ønskebørn had infringed Article 6 of the Danish Competition Act by coordinating prices.
Further, the DCC has decided to bring the case before the Danish Maritime and Commercial High Court seeking to impose a fine on Ønskebørn.
It will be interesting to see how the case turns out in court, as Ønskebørn must – in order for them to avoid the fine - prove that the agreement satisfied the criteria in the Danish equivalent to Article 101(3) TFEU, i.e., increased the efficiency on the market, was of advantage for the consumer, was essential to achieve the goals, and did not eliminate competition in the area.
For more information, please contact Morten Nissen, Alexander Brøchner or Nanna Sofie Krabbe.
