Contributed By Bruun & Hjejle
The Danish merger control regulation is primarily based on the principles of the EU merger control regulation. In general, Danish merger rules are interpreted in line with EU law and case law from the European Commission and the European Courts. Furthermore, the substantive test under Danish law is similar to that under EU law. The scope of the jurisdiction is based on turnover thresholds, which are largely calculated in accordance with EU principles.
The merger control rules are laid down in part 4 of the Danish Competition Act (the 'Competition Act') as well as two executive orders, which set out the detailed rules on the calculation of turnover thresholds and the notification of concentrations. Finally, the Danish Competition and Consumer Authority (DCCA) issues and regularly updates a guidance paper on merger filings on its website.
'Foreign-to-foreign' transactions are subject to Danish merger control insofar as the merging parties meet the Danish jurisdictional thresholds. No separate legislation applies to such transactions.
In terms of particular sectors, it should be noted that a merger between two or more commercial providers of electronic communications networks in Denmark may be referred to the DCCA by the Danish Business Authority, irrespective of whether or not the jurisdictional thresholds are met.
The Danish merger rules are enforced by the DCCA and the Danish Competition Council (the 'Council'). The DCCA prepares all cases and decides on less complex mergers on behalf of the Council, while the Council decides on the more complicated mergers.
The Council’s decisions may be appealed to the Danish Competition Appeals Tribunal (the 'Tribunal'), which is an independent administrative appeals body. The decisions of the Tribunal may, in turn, be appealed to the Danish courts.
Notification to the DCCA is compulsory if the jurisdictional thresholds are met, with no exceptions.
If the parties are unsure whether notification is required, they can choose to consult the DCCA about a specific transaction. If the parties wish to receive a legally binding reply from the DCCA regarding the obligation to notify, they must submit a notification. However, informal contact with the DCCA normally provides the necessary clarity on jurisdiction issues.
Fines may be imposed if the undertakings concerned fail to notify the DCCA of a merger, or if they implement a merger before approval (so-called 'gun-jumping'). The size of the fine imposed depends on factors such as the gravity of the infringement and its duration. In regard to legal persons, the turnover will also be taken into consideration.
The Danish EY/KPMG case from May 2014 was the first example of a gun-jumping case in Denmark. In the case, the Council approved the merger subject to remedies, but also found that the parties implemented the merger before approval. The decision was brought to court and, on 7 December 2016, the Danish Maritime and Commercial Court referred preliminary questions to the European Court of Justice (ECJ), seeking guidance on how to interpret the EU merger rules on the implementation of mergers (which are indicative of the interpretation of the Danish merger rules). On 31 May 2018, the ECJ delivered its preliminary ruling in case C-633/16, which de facto implied that EY and KPMG Denmark did not violate the prohibition on pre-implementation of a merger. Consequently, on 13 November 2018, the Danish Maritime and Commercial Court repealed the Council’s decision.
On 21 and 22 June 2018, the energy companies SEAS-NVE Holding A/S and Syd Energi Holding A/S each accepted fines of DKK4,000,000 (EUR537,000) for failure to notify a merger, when the undertakings jointly gained control over the company Clever A/S in 2012.
In general, penalties are made public.
Mergers resulting in a lasting change of control are caught by the Danish merger rules. In line with the EU Merger Regulation (EUMR), control can be obtained by agreements or other means that do not involve the transfer of shares or assets. Such operations are caught by the merger rules, too. As internal restructurings or reorganisations do not usually result in a change of control, they are most often not caught.
The Competition Act exempts certain types of transactions from the merger concept, as follows:
In line with the EUMR, ’control’ is defined in Section 12a of the Competition Act as the possibility of exercising decisive influence on an undertaking.
Control can be obtained through rights or agreements or in other ways that will, separately or in combination, make it possible to exert a decisive influence on the operations of the undertaking. The acquisition of a minority shareholding may amount to a merger insofar as the acquirer obtains a decisive influence on the undertaking – for example, through agreements concerning voting rights or veto rights.
The Danish merger rules apply to a merger if:
The concept of ‘undertakings concerned’ in the Competition Act – the direct participants in a merger – is identical to the EU concept, and the European Commission’s practice and the Consolidated Jurisdictional Notice provide guidance. Furthermore, the DCCA quite often consults the European Commission and obtains guidance on the interpretation of jurisdiction issues.
Except for the exceptions provided by the Danish Act on Electronic Communications Networks and Services and the EUMR, there are no deviations from the jurisdictional thresholds.
The aggregate turnover of the undertakings is the net turnover derived from the sale of products and the provision of services falling within the undertakings’ ordinary activities after the deduction of value-added tax and other taxes directly related to sales.
The calculation of turnover is based on audited accounts of the preceding financial year.
If the turnover is in a foreign currency, it must be converted into DKK on the basis of the average ECB rate of exchange of the preceding accounting year of the undertaking concerned.
The undertakings concerned are relevant for the purpose of calculating the jurisdictional thresholds.
The turnover of an undertaking concerned shall be calculated on a group-wide basis. The turnover of a group comprises the turnover of associated undertakings, which include subsidiaries, the parent company, subsidiaries of the parent company, joint ventures and other undertakings that are subject to joint management. Where a merger is the result of the acquisition of part of one undertaking, the calculation of the turnover shall only comprise the share of the turnover of the seller that relates to the acquired part (target).
If an undertaking has been divested or has acquired control of assets after the end of the preceding financial year, the turnover related to the divestiture or assets must be deducted or added to the turnover of the undertaking concerned.
Foreign-to-foreign transactions are subject to Danish merger control if the turnover thresholds are met, even if the merger has no actual effect on the Danish market. However, it is a prerequisite that the turnover is in Denmark and comprises products sold and services provided to customers who are residents of Denmark at the time when the agreement between the undertakings was made (corresponding to the EU merger rules). For credit institutions and other financial institutions, the turnover in Denmark comprises revenue earned by the institution’s departments or branches in Denmark.
Under Danish law, there is no market share jurisdictional threshold; the jurisdictional thresholds are based solely on turnover.
Joint ventures performing all the functions of an independent business entity on a permanent basis constitute a merger subject to merger control if the thresholds are met – just as under the EU merger rules.
The turnover from the joint venture includes the turnover of the undertakings concerned exercising control over the joint venture and their associated undertakings, but not turnover derived from the sale of products and the provision of services between the joint venture and the undertakings concerned.
The Danish merger rules do not apply to a transaction below the jurisdictional thresholds, except where a transaction is referred to the DCCA by the Danish Business Authority in accordance with the Danish Act on Electronic Communications Networks and Services or by the European Commission in accordance with the EUMR.
The DCCA does not have any power to investigate a transaction that is not covered by the rules.
A merger covered by the Competition Act must not be carried out until the parties have notified the DCCA, and the DCCA has approved the merger. However, pursuant to Section 12(c)(6) of the Competition Act, the DCCA may grant derogations from the suspensive effect, at its discretion.
If the parties infringe the prohibition against implementation of a merger prior to clearance, the DCCA may impose fines, which are made public.
On 21 and 22 June 2018, the energy companies SEAS-NVE Holding A/S and Syd Energi Holding A/S each accepted fines of DKK4,000,000 (EUR537,000) for failure to notify a merger, when the undertakings jointly gained control over the company Clever A/S in 2012 (see 2.2 Failure to Notify, above).
Section 12(c)(5) of the Competition Act holds a general exemption to the suspensive effect for public bids and a number of transactions regarding securities, ie, securities that can be traded on a market such as a stock exchange, whereby various sellers gain control. However, this applies only to the acquisition itself. The merger may not be implemented, and the buyer may not exercise voting rights attached to the securities in question, or may only do so to maintain the full value of its investment and after dispensation from the DCCA.
Pursuant to Section 12(c)(6) of the Competition Act, the DCCA may grant derogations from the suspensive effect, at its discretion.
Pursuant to Section 12(c)(7) of the Competition Act, the DCCA may, at its discretion, approve a merger following a simplified administrative procedure, if the DCCA considers that, on the basis of the available information, the merger does not give rise to objections.
There are no examples of Danish cases where global closing has been implemented following the carve-out of a business in Denmark, and it is not likely that such a procedure would be possible in Denmark.
Under Danish law, no deadlines for merger notifications are applicable. However, the merger may not be implemented before it has been approved by the authorities. If the parties implement the merger prior to approval, they may be subject to fines, which are made public.
A notification may be submitted to the DCCA if the parties have entered into a merger agreement (which may be subject to conditions), if a takeover bid has been made public, or if a controlling interest has been acquired. Generally, the DCCA will not accept a notification based on less formal agreements such as letters of intent, let alone based on good faith intentions to reach agreement. However, informal pre-notification discussions with the DCCA may be based on a letter of intent.
The filing fee for a simplified notification is DKK50,000. The fee for a full-form notification is 0.015% of the combined turnover in Denmark of the undertakings concerned, capped at DKK1.5 million. A merger notification will only be deemed complete once the merger filing fee has been paid. An already-paid fee is not reimbursable, unless:
It follows from the DCCA’s guidelines on the notification of mergers and merger fees from 2014 that the undertakings concerned are jointly responsible for filing the merger notification. However, the undertakings may choose to let one or more of the undertakings concerned submit the merger notification, or to authorise a representative to submit and receive documents on behalf of all of the undertakings concerned.
In a full-form notification, the DCCA requires detailed information about:
Further information is needed if the merger constitutes a joint venture.
In addition, the DCCA requires supporting documentation in the form of:
The notification is filed by means of the standard forms available on the DCCA’s website, www.kfst.dk. Notifications must be submitted in Danish, but notifications in English may be accepted upon prior agreement with the DCCA. Supporting documents may be submitted in Danish and English.
Less information is required under the simplified notification procedure.
When the parties have submitted a final notification, the DCCA will determine if the notification is complete, within ten working days. There are no penalties if a notification is deemed incomplete. However, Phase I – which is 25 working days – does not commence until the DCCA deems the notification complete.
If it emerges after clearance that the approval of a merger is, to a significant extent, based on inaccurate or misleading information attributable to the notifying parties, the DCCA may revoke the approval. The parties may also be subject to a fine, as exemplified in April 2017, where a district court fined Metro Cash & Carry Danmark DKK50,000 for failure to provide the DCCA with all relevant information for its review of the contemplated merger with Euro Cater.
The DCCA must declare the notification complete or specify any missing information no later than ten working days from submission of the notification. Phase I commences once the DCCA has declared the notification complete, and takes up to 25 working days (35 if the parties propose commitments). The DCCA will initiate Phase II if the merger is not approved in Phase I, including for reasons of time.
Phase II investigations are more comprehensive, and the DCCA will contact customers and other market participants if no such contact has already been made in Phase I. If commitments are involved, Phase II will usually be initiated, but it may be closed as soon as an agreement on commitments has been reached. Phase II investigations must be completed within 90 working days. However, the timeframe for a Phase II investigation will automatically be extended by up to 20 working days if the parties propose commitments during the last 20 working days of Phase II. Finally, the Council may – at any time – extend the deadline by up to 20 working days, provided the undertakings concerned have made a request for or consented to such an extension.
In a simplified merger without substantial horizontal overlap, a time frame of up to two months should be expected (from the first initial contact being taken to the DCCA). Complex merger cases can take up to – and sometimes exceed – a year before approval is granted. However, in general, the DCCA is becoming more efficient, especially when handling non-complicated mergers.
Pre-notification is not required by law, but the DCCA recommends that parties should contact the DCCA as soon as they have established that the merger is notifiable. During the pre-notification phase, the DCCA is willing to discuss the drafting of the notification. In practice, it will often take two to ten weeks for a full-form notification to be declared complete, and three to four weeks for a short-form notification. However, there are case law examples of longer pre-notification phases, such as the notification of JP/Politiken/Børsen, which was not declared complete until July 2016 even though the pre-notification process was initiated in January 2016.
Discussions prior to notification are confidential. The DCCA does not announce the merger or initiate market research, etc, before the parties have notified the merger, unless specifically agreed to by the parties, or if the merger is known to the public.
Information requests are common, and many questions can be received in simplified transactions without overlap. In complex transactions, information requests can be extremely burdensome, and often require the involvement of economic expertise. Until 2018, information requests did not stop the clock, but an amendment to the Competition Act introduced a 'stop the clock' provision as of 1 January 2018, which entitles the DCCA to suspend the deadline for a merger review if the undertakings concerned do not disclose requested information.
Since 2010, it has been possible to use a full-form procedure or a short-form (simplified) procedure, both of which have their origins in the EU merger regime. Under the simplified procedure, the parties are required to submit less market data, and the DCCA’s decision can be expected within 25 working days of the notification being declared complete.
The simplified notification may be submitted in the following cases:
Even if the conditions are met, the DCCA may still require a full-form notification. It is, therefore, recommended to engage in a pre-notification discussion with the DCCA about the type of notification procedure required. A decision that a merger does not qualify for a simplified procedure may be appealed to the Tribunal, but it is rarely overturned as the DCCA has a wide discretionary margin when deciding whether a simplified notification suffices. In Dansk Supermarked/Wupti in April 2016, the Tribunal upheld the DCCA’s decision ordering the parties to make a full-form notification of the merger, as the information set out in the parties’ draft notification did not convince the DCCA that the conditions for a simplified notification had been met. The decision was later appealed to the district court which on 10 December 2018 ruled that the DCCA acted correctly in connection with the notification. The district court’s judgment is currently pending before the High court.
Formally, the same deadlines (for example, 25 working days in Phase I) apply to the simplified procedure but, in practice, a faster approval can be expected. It is understood that especially the internal procedures in the DCCA are less burdensome for simplified notifications.
Section 12c of the Competition Act provides that the authorities shall approve a merger that will “not significantly impede effective competition, in particular due to the creation or strengthening of a dominant position.” However, the authorities must approve the merger if the merging parties offer commitments that solve the problems identified by the authorities.
When assessing a merger, the authorities will apply the same tests as the European Commission (ie, the SIEC test under EUMR Article 2(2)), so the Commission’s merger practice and the relevant case law from the European Courts will be applied. The Commission’s guidelines on the assessment of horizontal and non-horizontal mergers will also provide an important contribution to the interpretation of the Competition Authorities’ merger assessments.
When the authorities assess whether a merger will significantly restrict effective competition, they will, inter alia, consider whether the merger will create or strengthen a dominant position. As part of the authorities’ assessment of the creation or strengthening of a dominant position, they will, inter alia, look at market shares and other aspects that may affect competition, such as the presence of actual or potential competitors, as well as buyer power.
A merger may restrict effective competition even if it does not create or strengthen a dominant position. A merger between undertakings that are connected vertically may, for example, restrict the competition from actual and potential competitors. Another way in which a merger may restrict competition without creating a dominant position is when the merger takes place in an oligopolistic market.
The DCCA also examines the ancillary restraints on the undertakings concerned. Impediments will only be allowed if they are necessary and proportionate to effectuate the merger.
According to Section 5a of the Competition Act, the relevant market is determined based on studies of demand and supply substitution.
The DCCA investigates demand substitution by identifying products that consumers consider to be substitutable for the products of the undertaking concerned – ie, products that consumers would likely choose over products from the undertaking concerned in the event of a small but significant and non-transitory increase in price. Furthermore, the DCCA tests whether other suppliers, in response to a small and non-transitory increase in the relative prices of the undertaking’s products, may in the short term reorganise their production to the relevant products and market them without significant additional costs or risks.
The DCCA will consider the relevant market to be affected by the transaction if:
If the market share is below 15% in cases of horizontal overlap and 25% in cases of vertical overlap, the merger is – on the face of it – considered unproblematic and can be notified following a simplified procedure.
The authorities often rely on case law from other jurisdictions and particularly the case law of the European Commission, but they may also include case law from the National Competition Authorities of other EU member states.
The DCCA will investigate the same competition concerns as the European Commission, including unilateral effects, co-ordinated effects, conglomerate or portfolio effects, vertical concerns, and elimination of potential competition.
The DCCA notes in its guidance paper that a merger may reduce effective competition, even if no dominant position is created or strengthened. For instance, this may be the case in relation to vertical mergers, or in relation to mergers in oligopolistic markets (see 4.1 Substantive Test, above).
While the DCCA may take economic efficiencies into account, it does not ex officio consider economic efficiencies when it receives a merger notification. On the contrary, it is up to the parties to identify economic efficiencies; the DCCA will require the parties to substantiate such claims with, inter alia, economic expertise – and the burden of proof is in general high. In practice, economic efficiencies mainly play a role in complex mergers, and they will often be discussed in Phase II of the merger procedure.
The DCCA generally only takes competition concerns into account in the review process, and the Competition Act does not expressly permit the DCCA to take non-competition factors into account. Thus, it could be suggested that non-competition concerns have not played a significant role to date in Danish merger control, if any.
The creation of a joint venture performing all the functions of an autonomous economic entity on a lasting basis is considered a concentration under Danish law. In practice, the DCCA takes guidance from case law and guidelines from the Commission when assessing aspects of a joint venture.
In accordance with the rules on anti-competitive agreements, the DCCA will examine whether a joint venture has the co-ordination of behaviour between parent companies as its object or effect.
In practice, if the DCCA finds that a merger may significantly impede effective competition, it is up to the parties to propose structural or behavioural remedies to mitigate the DCCA’s concerns. If the DCCA does not find that the remedies solve the competition concerns, the merger will be prohibited.
Since the introduction of merger control in Denmark in 2000, only one merger has been prohibited: the 2008 Lemvigh Müller/A&O Johansen merger. However, some merger notifications have been withdrawn by the parties themselves before the Council has made a decision, such as the contemplated merger between the Danish abattoirs Danish Crown and Tican, which was notified to the European Commission in July 2015. Upon request from the DCCA, the Commission referred the part of the merger affecting the Danish markets to Denmark. The notification was withdrawn in December 2015, almost five months after the referral, indicating that the Council would otherwise have prohibited the transaction.
Similarly, in Phase II of the JP/Politiken/Børsen merger (a merger between two news companies), a notification submitted in July 2016 was withdrawn in January 2017. In November 2016, the DCCA sent a draft decision, according to which the merger was found capable of impeding effective competition in eight different markets. Subsequently, the parties proposed various remedies, but withdrew the notification shortly after, as a result of the serious concerns raised by the DCCA about the negative effects of the merger on competition.
Further, Metro Cash & Carry Danmark and Euro Cater submitted a merger notification in October 2014 but withdrew it in November 2014, in consequence of the DCCA’s initial assessment of the proposed merger, which showed that it would significantly reduce effective competition. The merger included Euro Cater’s acquisition of two of Metro Cash & Carry Danmark’s stores in Denmark. The case is also of interest because, in April 2017, a district court fined Metro Cash & Carry Danmark DKK50,000 for failing to provide the DCCA with all information relevant for its review of the contemplated merger. The case exemplifies the importance of complying with the duty of disclosure at any stage of the notification proceedings before the DCCA.
If a merger gives rise to concerns, the parties may propose remedies in order to obtain the DCCA’s approval. Usually, such commitments will be discussed and agreed upon in Phase II.
According to the Competition Act, remedies may include:
However, this list is non-exhaustive.
Remedies proposed by the parties must eliminate competition concerns and be complete and effective in every respect. The parties must explain in detail how to implement the proposed remedies, and how the proposed remedies will solve the competition concerns. The proposed remedies must be binding and commit the parties to act or omit to act in a particular way. If the parties fail to comply with the remedies, the DCCA may revoke its approval or impose fines on the parties.
In June 2018 the DCCA published two new commitment templates, including model texts for divestiture commitments and trustee mandates.
Since the introduction of the Danish merger control regime in 2000, the Council has, historically, relied quite heavily on behavioural remedies – even where the merged entity had a market share of almost 90% in major markets. The focus now seems to be on structural remedies.
The broader EU law influence apart, this development is probably due to the fact that it has been difficult and required considerable resources from the DCCA to control the merged entity’s compliance with behavioural remedies. The decisional practice shows that behavioural remedies often result in more case handling – either due to the merged entity’s violation of the remedies or to its attempt to have the remedies changed or removed based on reduced market shares or a new market situation. One example is the case of Nykredit Realkredit A/S, a Danish mortgage company. In 2003, Nykredit agreed to a remedy that limited its fees on mortgage loans to consumers to 0.5% of the mortgage loan value. In light of declining interest and increased capital requirements, Nykredit tried to have the remedy amended or cancelled. However, in June 2014 the Supreme Court found that the remedy was not limited in time, and hence did not cancel the remedy. The case shows that forcing the cancellation of a remedy through the courts may be difficult.
The recent Tryg/Alka merger approval from November 2018 involved behavioural remedies and may be seen as a shift away from structural remedies (see 5.8 Prohibitions and Remedies for Foreign-to-Foreign Transactions, below).
In Denmark, remedies are not used to address non-competition issues.
The DCCA’s guidance paper on merger filings encourages parties to consider remedies as early as possible if there is a risk that the concentration may give rise to competition concerns.
Remedies may be proposed in both Phase I and Phase II. If remedies are proposed later than 20 working days before the expiry of Phase II, Phase II will automatically be prolonged by 20 working days.
It is the responsibility of the parties to propose remedies, but it may be possible – during the merger process – to arrange meetings with the DCCA and receive input on what types of remedies may be deemed suitable. In practice, remedies will often be proposed in writing by the parties and then discussed at a meeting between the parties and the DCCA.
In June 2018 the DCCA introduced two new commitment templates, including model texts for divestiture commitments and trustee mandates. It is not mandatory for the parties to use the templates when proposing remedies to the DCCA, but may be a good idea to do so.
The DCCA may condition the approval upon the agreed remedies in order to ensure that the remedies are complied with. The Competition Act does not regulate when remedies should be complied with. In practice, the question will depend on the type of remedy (structural or behavioural) and the concrete decision of the DCCA in the individual case.
According to the Competition Act, the DCCA may issue orders and fines to ensure that remedies are complied with.
Once a merger is approved or prohibited, a formal decision is issued to the parties. Furthermore, the decision is made public on the DCCA’s webpage. Usually, it is possible for the parties to read the public version and provide comments regarding confidentiality before it is made public.
There are no recent examples of remedies in foreign-to-foreign transactions.
The most recent example of a merger requiring remedies is the Tryg/Alka case, in which the DCCA approved the contemplated merger conditioned upon Tryg’s behavioural commitments. Both Tryg and Alka are providers of products and services within the field of property and casualty insurance (non-life insurance) for private consumers. In March 2018, the DCCA received a notification of Tryg’s acquisition of sole control of Alka, which would make Tryg become the largest provider of insurance products in Denmark based on both volume and turnover. During the process, Tryg offered several behavioural commitments in order to address the concerns of the DCCA. For instance, Tryg committed to:
On this basis, the Council approved the merger on 5 November 2018.
Another recent example is the GlobalConnect/Nianet merger between two companies on the housing services market in the Aarhus area. On 30 May 2018, the Council approved the merger subject to structural remedies to address the Council’s concerns regarding competition impediments. The remedies imply that GlobalConnect divests Nianet’s housing-service activities in the Aarhus area. Further, GlobalConnect has agreed to let the sale be monitored by a trustee, who is approved by the Council. If the parties fail to sell within a predetermined period, the trustee will be authorised to sell on behalf of GlobalConnect.
Further, in September 2017, the DCCA approved Another recent example is the Boxer/SE merger between two companies in the retail provision of TV services to end users and the retail supply of fixed internet access services to end users. The Council was concerned that the merger would cause unilateral effects. In the market for the retail provision of TV services to end users, unilateral effects would involve the reduction of supply and/or higher prices of à la carte products. In the market for the retail supply of fixed internet access services to end users, unilateral effects would consist of tying the supply of fixed internet access services with the supply of TV services provided through the DTT network. The parties proposed commitments for SE to continue to supply the à la carte products, which Boxer supplied at the time of the notification, and a commitment not to increase prices, so as to prevent SE from tying the supply of fixed internet access to end users with the supply of TV services provided through the DTT network. Subject to the proposed remedies, the Council approved the merger on 27 September 2017. The commitments are set to expire in April 2020 when Boxer’s DTT licence expires, which is less than three years after the approval of the merger.
As with EU notifications, ancillary restraints are automatically covered by Danish merger approvals. The DCCA does not, of its own accord, deal with ancillary restraints to mergers. The parties must determine whether there are any ancillary restraints requiring evaluation by the DCCA. The Commission’s guidelines and practice apply.
The DCCA decides whether it is necessary to conduct a market hearing. In transactions notified according to the simplified procedure, the DCCA often grants an approval without conducting a market hearing. However, most full-form notifications involve some kind of market hearing.
If a market hearing is conducted, the DCCA will hear suppliers, competitors, customers and trade organisations. Any comments that indicate competition concerns will typically be presented to the parties (in anonymised form), who will need to address these issues.
No third party has a right to appeal merger decisions to the Tribunal. However, if sufficient legal interest is proved, a third party may bring a Council decision directly before the Danish courts.
The DCCA regularly conducts public hearings on its website, and also in simplified notifications with only small overlaps between the parties. In some instances, input from third parties has led the DCCA to request a full-form notification. This was the case in Arbejdsmarkedets Tillægspension/Danica Ejendomsselskab ApS, where the parties originally submitted a simplified notification. The DCCA informed competitors and customers of the merger and, based on their comments, required the parties to submit a full-form notification, resulting in a filing fee of DKK1.5 million instead of DKK50,000. Eventually, the DCCA approved the merger following a simplified procedure. Furthermore, in some cases, complaints from competitors or customers have caused the DCCA to request remedies.
The DCCA will typically market test remedies proposed by the parties, and will normally contact third parties directly with a request to provide comments.
The DCCA usually makes public a short note memo, explaining that it has received a notification and that comments may be submitted to the DCCA. The decision will be made public once the transaction is approved/prohibited.
Commercial information may be kept confidential. In order to ensure this, the DCCA will normally provide the parties with a draft for review before the document is made public.
The DCCA co-operates with competition authorities in other EU and EEA jurisdictions – in relation to both general policy matters and specific, cross-border transactions. The Competition Act regulates the sharing of information with other national competition authorities. Furthermore, national competition authorities may share information with each other, according to the EU rules on co-operation.
The notifying parties have a right to appeal the Council’s merger decisions to the Tribunal, and the Tribunal’s decisions may, in turn, be appealed to the ordinary courts.
An appeal to the Tribunal must be filed no later than four weeks after the Council has made its decision. No merger decisions have yet been appealed. However, an appeal will likely run for three to six months.
No third party has the right to appeal merger decisions to the Tribunal. However, if sufficient legal interest is proved, a third party may bring a Council decision directly before the Danish courts.
An amendment to the Competition Act entered into force on 1 January 2018 and includes two changes that are relevant to merger control – namely, merger remedies and procedural time limits.
Firstly, the amendment clarifies the effects of proposing remedies during the DCCA’s review. With this change, it is clear that only binding commitments affect the time limits for the review. The DCCA must receive binding commitments within 90 days of the decision entering into Phase II. After this date, the DCCA may consider changes to submitted commitments only under special circumstances. If binding commitments reach the DCCA more than 70 business days after entering into Phase II proceedings, the deadline for the merger review is prolonged by up to 20 business days.
Secondly, the amendment introduces a 'stop the clock' provision, which corresponds to the EU merger regime and permits the DCCA to suspend the time limits for a merger review if the undertakings concerned fail to satisfy a request for information by the DCCA within the deadline.
In general, the legislator and the competition authorities appear to strive for further convergence between EU and Danish merger control regulation. The amendment of the Competition Act confirms this development.
No amendments relevant to the Danish merger rules are expected in 2019.
In April 2017, a district court fined Metro Cash & Carry Danmark DKK50,000 for failing to provide the DCCA with all information relevant for its review of the contemplated merger with Euro Cater. The case exemplifies the importance of complying with the duty of disclosure at any stage of the notification proceedings before the DCCA.
In 2017 and 2018, the Council conditioned approval of mergers between Boxer/SE, GlobalConnect/Nianet and Tryg/Alka upon remedies proposed by the parties (see above).
In 2014, 2015 and 2017, it happened that parties repealed merger notifications in consequence of the authorities’ investigations and before the authorities rendered a decision.
In October 2016, the DCCA established a new merger control unit. Previously, mergers had been handled in the different sector units (construction and transport, media and telecommunications, etc), whereas the new merger unit will be a gateway for all mergers and will be responsible for handling the most complex mergers. This organisational change is in line with the recent trend where simplified notifications are handled more efficiently, while more resources are being used on investigating the more complex merger cases. This development is expected to continue.
Also, the DCCA is more frequently subjecting merger cases to econometric analysis (using, for example, UPP and conversion ratios), and it is becoming increasingly difficult to get approval for more complex mergers, even if the parties offer remedies. As a consequence, several merger notifications have been withdrawn in recent years because no agreement could be reached with the authorities.