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Court: Agreement between media agencies constituted anti-competitive customer allocation

21. October 2019

Danish Maritime and Commercial Court confirms Competition Council decision: Agreement between media agencies constituted anti-competitive customer allocation.

In August 2017, the Danish Competition Council found that a horizontal cooperation agreement and concerted practice between two independent media agencies constituted an infringement of Section 6 of the Danish Competition Act.

The decision was first upheld by the Danish Competition Appeal Tribunal in 2018. And the Danish Maritime and Commercial Court have now confirmed that the agreement in question was indeed an infringement of the prohibition in Section 6 of the Danish Competition Act regarding agreements which have as their object to restrict competition.  

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

Such customers could in the relevant time period possibly 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 were 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 by the time that the Danish Competition Council ruled on the case in 2017. 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.