Proposed changes to the Danish Competition Act

By Morten Nissen, Alexander Brøchner

01-2021

As a part of the implementation of the ECN+ Directive, a new competition act has been proposed by the Danish Government. The proposed competition act entails several extensive and intrusive changes to the current competition act. Accordingly, companies should be aware that these amendments will be taken as an occasion to review internal policies and compliance programmes.

For Denmark, it is our expectation that the new competition act will increase the likelihood for the Danish Competition and Consumer Authority ("DCCA") to enforce competition legislation and to sanction violations, due to, inter alia, the increased powers of investigation afforded to the DCCA.

Furthermore, the harmonization that the directive entails will lead to a more uniform enforcement of competition law across all EU Member States.

The proposed competition act is expected to enter into force on 4 February 2021.

Content of the proposed act

The main changes in the proposed competition act are the following:

Evidence

  • Expanded possibilities for inspections for the competition authorities.
    The DCCA will not be limited to inspect the buildings and means of transport for the companies, but also the premises and private homes of employees, if there is a reasonable suspicion that information regarding infringements would be there.
  • Expanded possibilities for the competition authorities to interview employees and board members.
  • A provision which expressly states that documents, declarations, electronic messages, recordings and all other objects and media which contain relevant information can be used as evidence. This also encompasses secret recording carried out by others than the authorities, as long as the recordings are not the only evidence.

Fines

  • Matters concerning fines imposed on companies will be decided by the courts under the rules for civil procedure, whereas such matters have so far been handled under the rules for criminal procedure.
  • Parent companies can be fined for infringements committed by their subsidiaries, if the parent company has a decisive influence over the subsidiary.
    Under the current Danish rules, it is required that the parent company has participated in the infringement for the parent company to be jointly liable.
  • Members of professional trade associations can be jointly liable for fines imposed on the trade union, if the trade union cannot pay the fine.
  • Companies can be fined for infringements concerning simple negligence, whereas gross negligence is required under the current competition act.
  • Increased maximum for periodic penalty payments, which will be capped at 5% of the undertaking’s daily total global (consolidated) revenue.

Other elements

  • In addition to behavioural orders, the DCCA will be able to issue structural orders, such as forcing companies to sell off divisions of the company or intangible assets or dispose of shares held in other companies.
  • Increased possibility to interrupt the limitation period. The current 5-year limitation is interrupted with respect to all parties involved in an infringement, if the competition authorities initiates an investigation against just one of the parties involved.

There is, however, also an absolute limitation period of 10 years.

For more information please contact Morten Nissen or Alexander Brochner.

 
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