Anti-competitive agreement on customer allocation between media agencies

30. August 2017

On August 30, 2017, the Danish Competition Council found that a horizontal cooperation agreement between two independent media agencies constitutes an infringement of Section 6 of the Danish Competition Act.

The two media agencies had entered into an arrangement on joint purchase and resale of distribution of unaddressed advertising material. The two media agencies operate as competitors on the market. They approach the same segment of customers in demand of distribution of their advertising material, i.e. in particular small and medium sized undertakings.

Such customers may obtain a better price for the distribution by using a media agency to negotiate the price with the distributor. The reason is that – as consolidators – such media agencies are in a position to obtain volume rebates from the distributor by grouping the mail from their customers.

Such arrangement does not necessarily give rise to competitive concerns. But documentation in this case showed that the two media agencies had also agreed to allocate the customers as part of the arrangement.

The arrangement had already come to an end. But horizontal agreements and concerted practices on customer allocation constitute a serious infringement of the prohibition against anti-competitive agreements in Section 6 of the Danish Competition Act.

The Competition Council found that the parties of the case had violated that prohibition and therefore ordered the parties to abstain from entering into similar anti-competitive arrangements in the future.

The Competition Council also decided to submit the case to the Danish State Prosecutor for Serious Economic and International Crime.

For more information please contact Michael Riis, phone +45 41 71 51 91, e-mail mhr@kfst.dk, or Julie Kragh Kruse, phone +45 41 71 51 37, e-mail jkk@kfst.dk.