The Danish Competition Council has adopted a decision concerning market sharing between members of an association of undertakings
On June 22 2022 the Danish Competition Council (DCC) adopted a decision concerning Boligtextilbranchens Indkøbsservice A.M.B.A. (Botex). In the decision, it is concluded that Botex (an association of undertakings) have adopted a decision on market sharing by assigning exclusive marketing areas to the members of the association. The DCC finds that this decision constitutes an infringement of Section 6, Subsection 1, of the Danish Competition Act and TFEU Article 101(1). The DCC has ordered Botex to cease the illegal behavior and to refrain from similar activities in the future.
Botex is a Danish association of undertakings, which on behalf of its member negotiates agreements with suppliers of home textiles. Botex also sells home textiles directly to retail customers via an online shop and distributes products under the Botex-label to its members. The members of Botex are individual Danish retailers of home textiles. The members own brick-and-mortar stores in Denmark. The members of Botex each own a share in Botex.
In Botex’ inter-trade covenant it was decided that the individual members were not allowed to distribute door-to-door campaigns/advertising material in another members’ marketing area. Marketing areas were defined by postal codes. Under competition law companies are required to act independently of each other and subject to the pressure exerted by competitors. The division of markets into geographical marketing areas reduces the competitive pressure to which the Botex stores are exposed and affects the members’ strategic choices, for example in relation to pricing. In addition, a restriction on the possibility to market oneself can hinder consumers' access to information and, thus, their ability to compare the individual Botex stores on parameters such as price and quality. Overall, this can lead to higher prices, poorer service, inferior quality and a more limited supply.
Based on the evidence in these cases, the DCC found that the assigning of exclusive marketing areas to the members of the association constituted an infringement of Section 6 of the Danish Competition Act and TFEU article 101.
For further information please contact Head of Unit, Louise Kastfelt, phone +45 71 51 80, e-mail firstname.lastname@example.org.