Danish Competition Council: Ageras has infringed competition law
This decision concerns the actions of the digital platform Ageras A/S (Ageras).
Ageras offers a digital platform - www.ageras.dk – that allows users of professional services such as accounting, bookkeeping and legal services to connect with accountants, bookkeepers and lawyers (“partners”). Ageras is also present via website in: Norway, Sweden, Germany, the Netherlands, the UK and the US. The present case is delimited to Ageras’ business involving accountant and bookkeeping partners.
The user submits a particular task (“leads”) to Ageras, which Ageras subsequently publishes online on Ageras’ partner website. In turn, Ageras makes it possible for partners to submit offers on the user’s listed tasks. The leads are limited to three partners in a tender-like process. Subsequently, partners submit offers, which the user may choose or abstain from choosing. Ageras fee for this process was based on a percentage of the fee, which the partners extracts from users in a so-called “revenue share model” and a flat subscription fee.
In March 2018, Ageras began systematically informing the partners on the platform of a so-called “estimated market price” via a pop-up prompt when partners would submit bids deemed by Ageras to be too low. An example of the wording of the pop-up prompt is pictured below (translated from Danish).
A partner would only receive this pop-up, if the partner submitted an offer lower than an “estimated market price” threshold calculated by Ageras for the specific lead. If the partner chose to adjust his bid, but remained below the “estimated market price” threshold, the partner would receive the same prompt until either: choosing to abstain from the bid, choosing to adjust the price to a higher price than the estimated market price or choosing to submit the original bid.
Furthermore, Ageras published a number of leads, which contained a “minimum quote” for the individual customer. All partners with access to these leads were able to see the “minimum quote” regardless of their individual bids or participation in the bidding round.
This decision establishes that Ageras’ practices of using a pop-up to inform partners of “estimated market prices” and disseminating “minimum quotes” in task descriptions, and the subsequent acquiescence from the partners to these practices constitutes an infringement of the Danish Competition Act section 6(1), cf. (2) no. 1 and TFEU Article 101(1)(a).
The DCCA found that by creating a pop-up informing the individual partners of an “estimated market price”´, and by distributing leads containing “minimum quotes”, Ageras invited the partners on the platform to enter into an illegal accord with the intent of raising prices on the platform. The partners subsequently acquiesced to the arrangement by failing to publicly distance from the practice or by explicitly consenting directly to Ageras.
The DCCA found that Ageras - with "estimated market price" in the pup-up and “minimum quotes” in task descriptions - seeks to influence one of the most important competitive factor (price) of the services provided through Ageras' platform. Ageras' information is capable of aligning the partners' prices in the bidding process.
At the same time, the DCCA assessed that Ageras' information about "estimated market price" acts as a price signal and focal point that reduces the uncertainty of the partners when bidding on the platform. The result is that the partners do not decide independently on their own pricing policy. Thus, Ageras' and the partners' practices are capable of resulting in an alignment of prices. This price aligning mechanism is expected to cause prices to rise and in isolation, it will result in increased profit for Ageras.
The DCCA assessed that, when assessing these practices in the light of their economic and legal context, the practices amount to a by object restriction among the parties to the practices.
Consequently, the DCCA adopted the decision that Ageras has infringed upon the Danish Competition Act Section 6(1) cf. (2) no. 1 and Article 101 TFEU (1)(a).
The DCCA has elected to delimit this decision to a single participant: Ageras. This is because Ageras initiated the practices, Ageras implemented the algorithm and pop-up prompt and Ageras disseminated the “minimum quotes” in the leads. Furthermore, Ageras had communications with individual partners concerning the initiative.