Contributed By Bruun & Hjejle
The statutory basis for cartel regulation in Denmark is the Danish Competition Act ("the Act"), which came into force in 1998.
The Act is largely based on EU competition regulation, and the rules are interpreted in accordance with legal practice from the European Commission as well as the European Court of Justice.
As such, Section 6 of the Act lays down a general prohibition against anti-competitive agreements that is similar to Article 101(1) of the Treaty on the Functioning of the European Union (TFEU). Article 8 of the Act corresponds to Article 101(3) of the TFEU, providing an efficiency defence for agreements, decisions or concerted practices that are caught by Section 6.
An English version of the Act is available on the website of the Danish Competition and Consumer Authority (DCCA), at http://en.kfst.dk/Competition/Legislation.
The DCCA and the Danish Competition Council ("the Council") are the primary enforcement agencies in Denmark. The DCCA investigates cartel matters and other competition law infringements and works to ensure compliance with the competition rules in general. Some (non-principal) competition cases are decided by the DCCA acting on delegation from the Council, but cartel cases are usually initiated, investigated and prepared by the DCCA and, on the basis of the DCCA’s presentation and recommendation, decided by the Council.
The Council’s decisions are subject to appeal to the Danish Competition Appeals Tribunal (DCAT) and, subsequently, to the Danish courts. Appeals proceedings before the courts are civil. Further, potential damages are awarded in civil proceedings before the courts.
Where the Council finds an infringement of competition law to be intentional or grossly negligent, it may decide to refer the case to the State Prosecutor for Serious Economic and International Crime (the State Prosecutor) for further criminal investigation and prosecution. Moreover, in clear cases the DCCA may decide to refer the case directly to the State Prosecutor for criminal investigation and prosecution instead of investigating the case itself.
In cases where intentional or grossly negligent infringements of competition law are established, criminal sanctions may be imposed by the courts on both individuals and undertakings. Cases are brought by the State Prosecutor.
As of 1 March 2013, individuals may be sanctioned with imprisonment if they have intentionally participated in a cartel, and the breach was particularly grave, especially due to the extent of the infringement or its potentially damaging effects. The maximum prison sentence is generally up to 18 months, but the term may be extended to up to six years in cases involving aggravating circumstances (Section 299c of the Danish Criminal Code). The courts have yet to impose the first prison sentence for cartel participation, but the State Prosecutor has, in a number of cases, unsuccessfully asserted claims for unconditional imprisonment, inter alia in the Danish Eastern High Court judgment of 21 December 2018, the District Court of Hilleroed judgment of 11 January 2019 and the District Court of Roskilde judgment of 4 April 2019 concerning bid rigging between demolition contractors.
Imprisonment is expected to be imposed on board members and management.
In addition to the introduction of prison sanctions, the 2013 amendment to the Act substantially increased the level of fines imposed for participation in a cartel. When meting out a penalty (fines and/or imprisonment), consideration must be given to the gravity and duration of the infringement. As regards legal persons, consideration must further be given to the turnover (Section 23(5) of the Act). According to the preparatory works to the Act, fines imposed on legal persons should not exceed 10% of the legal person’s worldwide turnover, in line with EU competition law.
It should be noted that the courts are assigned considerable discretion when imposing penalties. However, the indicative level of fines on legal persons for cartel behaviour is more than DKK20 million, while the indicative level for individuals is DKK200,000.
While it is possible to challenge cartel behaviour before the Danish courts, claimants usually challenge such behaviour by complaining to the DCCA, as it is free to file a complaint, and the DCCA is in a better position to investigate alleged infringements of competition law.
However, if a case regarding anti-competitive agreements is pending before the courts, the DCCA will usually refrain from investigating and await the outcome of the proceedings.
Further, there is a private right of action for challenging cartel behaviour in Denmark in relation to claims for damages. Action for damages can be brought without relying on a prior decision from the competition authorities or a judgment from the courts determining an infringement of competition law. However, if such a decision or judgment exists, it will form the basis of the court's judgment on damages. The limitation period for action for damages is suspended if the DCCA initiates investigations against the alleged cartel.
The Danish Act on Actions for Damages for Infringements of Competition Law (“the Competition Damages Act”) implements the Antitrust Damages Directive (Directive 2014/104/EU).
The conduct covered by Section 6(1) and defined by Section 23(3) of the Act largely corresponds to the conduct prohibited by Article 101 of the TFEU. Accordingly, agreements, decisions or concerted practices between competing undertakings that have as their object or effect the restriction of competition can be classified as cartel conduct. More specifically, the prohibited conduct includes:
Any horizontal agreement contrary to Section 6(1) of the Act is punishable, and most – if not all – such horizontal agreements will be covered by the definition of a cartel offence under Section 23(3) of the Act.
Under Section 7 of the Act, the prohibition against anti-competitive agreements does not apply if the combined market share of the undertakings concerned is below 10% as regards horizontal agreements (and below 15% as regards vertical agreements). However, this "de minimis" exemption does not apply to hardcore restrictions and, as such, cartel activity is not covered by the exemption.
There are no industry-specific infringements and no industry-specific defences or antitrust exemptions under Danish competition law.
However, the Act does not apply to agreements, decisions or concerted practices within the same undertaking or group of undertakings; special rules apply to agreements within co-operative enterprises.
The Act does not apply to pay and working conditions either.
Furthermore, under Section 2(2) of the Act, the prohibition against anti-competitive agreements does not apply where the agreement is a direct or necessary consequence of public regulation; this exemption includes cartels. "Public regulation" comprises legislation, ministerial orders, general budget rules, ratified conventions and EU regulations, among others. Section 2(2) ensures that undertakings are shielded from all consequences of politically decided regulation that results in anti-competitive agreements or other infringements of competition law. Section 2(2) is, as such, similar to the state compulsion defence under EU competition law (see, eg, case C-280/08 P, Deutsche Telecom).
Section 137(4) of the Danish Public Procurement Act takes into account alleged cartel behaviour. According to Section 137(4), the contracting authority shall state in the contract notice if a candidate or tenderer will be excluded from participation in a procurement procedure if the contracting authority has sufficient plausible indications to conclude that the candidate or tenderer has concluded agreements with other economic operators for the purpose of distorting competition.
Section 137(4) covers not only agreements with the purpose of distorting competition specifically related to the specific procurement procedure, but also agreements entered into in connection with a previous procurement procedure. In principle, any infringement of Section 6(1) of the Danish Competition Act may lead to exclusion from participation in a procurement procedure.
Under Section 23(6) of the Act, a five-year limitation period applies to the imposition of fines.
As regards prison sanctions, the provisions of the Criminal Code apply. Section 93(1)(2) of the Criminal Code states that the limitation period is five years. However, if the case involves aggravating circumstances, meaning that the prison sentence may be prolonged for up to six years, the limitation period is ten years (Section 93 (1)(3)).
The limitation periods start when the cartel activity is stopped.
The Act applies to conduct in Denmark and to conduct resulting in anti-competitive effects in Denmark (the effects doctrine). Consequently, a cartel between undertakings situated outside Denmark may be covered by the Danish competition authorities’ jurisdiction.
The Act contains no explicit provisions on extraterritoriality, but Section 29 provides that the Act does not extend to the Faroe Islands or Greenland (which are part of the Kingdom of Denmark).
There are no formal principles of comity in Danish competition law, but under the general provisions of the Danish Criminal Code, sanctioning of the same conduct in other jurisdictions must be taken into account by the courts when setting the Danish sanction. This has not yet led to any problems, as the DCCA co-operates closely with the European Commission and the European national competition authorities (NCAs) through the European Competition Network (ECN), as required by Regulation 1/2003. The co-operation covers, for example, assistance for dawn raids and information sharing, as well as the allocation of jurisdiction over cartel cases.
Furthermore, the DCCA is a party to the Nordic co-operation agreement between the NCAs of Sweden, Norway, Finland, Iceland and Denmark. With the agreement, the Nordic NCAs undertake to minimise obstacles to effective enforcement, to co-ordinate investigations where practicable, to exchange relevant information, and to assist each other in dawn raids.
The DCCA’s power to perform dawn raids to assist the European Commission, the European NCAs and the Nordic NCAs is set out by Sections 18(9) and 18(10) of the Act.
The DCCA is not a party to any co-operation agreements with NCAs outside the EEA. However, under Section 18a of the Act, the DCCA can disclose information to foreign competition authorities if it is deemed necessary for the enforcement of their competition rules.
Cartel investigations are usually carried out by the DCCA. The State Prosecutor may also carry out investigations if there is reasonable cause to suspect an infringement that will lead to penalties.
The DCCA may initiate a cartel investigation on its own initiative; for example, following an analysis of the competitive environment in a specific sector. Cartel investigations may also be initiated on the basis of a leniency application, a complaint or a tip from a third party (including a foreign NCA). To facilitate the latter, it is possible for employees or others who may have knowledge of a cartel to inform the DCCA anonymously.
In connection with the investigation, the DCCA will generally carry out a dawn raid on the premises of the relevant undertaking in order to secure evidence. Before conducting the dawn raid, the DCCA is required to obtain a court order containing information on the subject matter and purpose of the inspection.
Following the dawn raid, the DCCA will conduct a review of the secured material. The search phase can last up to 40 days, in which electronic material copied from the undertaking’s IT system is reviewed by the DCCA. At the end of the search phase, the relevant undertaking will receive a report on all the documents tagged by the DCCA as being relevant for the investigation.
After the search phase follows the analysis phase, lasting at least two to three months. During the analysis, the DCCA reviews the tagged material and considers whether and how to proceed with the investigations. The review may result in a decision by the DCCA to:
Under Section 18 of the Act, the DCCA may carry out inspections of undertakings (dawn raids). It is almost inevitable that the DCCA will do so in Danish cartel investigations to secure evidence.
The undertaking faced with a dawn raid is obliged to allow the DCCA to carry out the investigation. Firstly, the DCCA must have access to review the premises of the undertaking and the information located on these premises. Secondly, the DCCA is allowed to make copies of physical documents and copies of the contents of electronic media. Thirdly, the members of management and employees are obliged to answer questions of a factual nature; eg, on the structure of the organisation, the location of specific documents and the meaning of initials or abbreviations used by the undertaking. The DCCA may also request oral statements from the employees, but no one is obliged to answer questions involving any acceptance of guilt.
The undertaking has the right to summon outside counsel. The DCCA is not obliged to delay the dawn raid until the counsel arrives, and generally only waits around 30 minutes for outside counsel to arrive.
In order to carry out a dawn raid, the DCCA must have made a formal decision to conduct an investigation, have obtained a court order, and be able to provide due identification of themselves. The DCCA must stay within the limits/scope of the court order and the DCCA’s decision when collecting and reviewing material.
The DCCA is entitled to gain access to the premises of the undertaking and to company vehicles. However, contrary to dawn raids conducted under EU law in accordance with Regulation 1/2003, under Danish law the DCCA has no access to private homes or private cars when conducting dawn raids. This means that the DCCA will have no access to, eg, a laptop belonging to the company if it is located in a private home or vehicle. In this case, the DCCA can only request an employee to hand over the laptop. Alternatively, the DCCA may be assisted by the police in performing a search under the rules on criminal procedure, provided the conditions for such a search are fulfilled.
Information found at the premises of the undertaking is presumed to belong to the undertaking. Thus, the DCCA will have access to the mailboxes of employees, including correspondence filed in folders labelled “private”. The burden of proof rests with the employee to document that such correspondence (eg, an email) on a medium (eg, a phone) is private. According to Section 18(1) of the Act, the DCCA may request employees to present the contents of pockets, bags, briefcases, etc. If the employee is not willing to comply with such a request, the DCCA may request the police representative present to carry out the frisking.
The DCCA is entitled to gain access to any information, regardless of the media. Consequently, it must be given access to rooms, cabinets, drawers, computers, smartphones, USB memory sticks, iPads, etc. The DCCA may view, read and make copies of any type of information, even if the undertaking considers such information to be confidential. Restrictions apply to information that does not belong to the undertaking, that falls outside the scope of the court order and the DCCA’s decision, or that falls within the legal professional privilege.
If it is not possible to make copies of the documents at the premises of the undertaking, the DCCA may seize material with the purpose of making copies at the DCCA’s premises, in which case the material must be returned to the undertaking within three days.
In general, undertakings shall and will co-operate with the DCCA. When an investigation lasts longer than one day, the DCCA has different options in order to avoid spoliation of potentially relevant information. In accordance with Section 18(5) of the Act, the DCCA can seal relevant rooms and offices of the premises or seal relevant information for up to three working days.
According to Section 18(1) of the Act, the DCCA can demand oral statements from representatives of the undertaking during a dawn raid. “Representatives of the undertaking” is interpreted broadly and includes any owner, co-owner or employee; guests or cleaning staff are not covered by the Act.
The interview/questions may only be of a factual nature and must concern the investigation. For example, the questions can relate to the structure of the organisation, the location of specific documents and the meaning of initials or abbreviations used by the undertaking. The DCCA may not ask questions of a self-incriminating nature, and the employee is not obliged to answer questions involving any acceptance of guilt.
Refusals to co-operate can result in penalties or administrative fines, in accordance with Sections 22 and 23 of the Act. There have not yet been any cases of non-cooperation in dawn raids under Danish law.
At the completion of a dawn raid carried out by the DCCA, the undertaking will receive a copy of all physical material of which the DCCA has made copies during the inspection.
The undertaking can request a report from the DCCA about the course of the investigation. In practice, the DCCA prepares the report in any case.
As a general rule, everyone who is subject to a coercive measure such as a dawn raid will have the right to representation (Section 8 of the Public Administration Act). There are no rules on who may provide representation or counselling to an officer or employee of a specific undertaking, but the DCCA may demand that the officer or employee participate personally if they are deemed to be of importance to the investigation.
Legal counsel may represent both the undertaking and the employees, unless such representation would create a conflict of interest. If so, a present or past employee may seek independent legal advice.
During the initial phase of an enforcement effort, the counsel should make sure that it obtains full access to the DCCA’s case. The counsel should further demand to be present during the questioning of employees, during the review of documents, etc, and should ensure that the DCCA acts within the scope of the warrant and does not violate the legal professional privilege, etc.
Documentary evidence is obtained through dawn raids, leniency applications and interviews with parties and third parties (including complainants).
Questioning/interviews are voluntary, as the DCCA only has a mandate to ask questions of a factual nature.
The DCCA gathers other types of information through meetings with the complainant and other market players. It also gathers and processes publicly available information from websites, reports, etc.
Under Section 17 of the Act, the DCCA may collect all types of information.
The DCCA is entitled to gain access to the premises of the undertaking and to company vehicles. This means that the DCCA will have no access to information located outside the undertaking’s premises; eg, in a private home or vehicle. The DCCA can request an employee to hand over media located outside the undertaking’s premises that contain relevant information – such a request will normally be adhered to by the undertaking/the employee.
Under Section 18(2) of the Act, the DCCA may obtain access to information that is stored by an external data processor if this can be done using passwords that are available at the premises of the undertaking subject to the search. According to the preparatory works for the Act, the undertaking’s cloud is covered by Section 18(4) of the Act and, thus, comes under the DCCA’s jurisdiction.
The DCCA has chosen to recognise the principle of legal professional privilege and to follow the EU rules and case law from the EU Courts on legal professional privilege. Legal professional privilege applies to all legal counsel admitted in an EU country.
Accordingly, the DCCA does not have the right to review correspondence with an undertaking’s external legal counsel regarding the undertaking’s compliance with competition rules. The same applies to documents that summarise or pass on such information. In correspondence with EU principles, legal professional privilege only applies to external counsel and, thus, not to communications to or from in-house counsel (unless the in-house counsel passes on information from an external counsel).
Although the exact delimitation of the legal professional privilege under Danish law may, in specific cases, give rise to discussions with the DCCA, the limits have not been tested on appeal yet, nor has it been tested whether the State Prosecutor will have access to correspondence considered to be covered by legal professional privilege – statements from the State Prosecutor indicate that he believes so.
During a dawn raid, the DCCA applies the principle of legal professional privilege in the following way: if the DCCA comes across a document that may be privileged, or if a representative of the undertaking points out that a document may be privileged, the DCCA will briefly view the document to the extent necessary to assess whether the document is privileged. If the document is clearly privileged, the DCCA will make sure that it will not appear in the DCCA’s searches even though it contains key words covered by the scope of the investigation. If the document is not clearly privileged, the DCCA will tag the document as “LPP”, which indicates that it may be covered by the legal professional privilege. Afterwards, the undertaking must provide documentation that the document should be excluded from the investigation, and the DCCA will make a formal decision on the matter on this basis.
Similar to the privilege against self-incrimination recognised by the European Court of Justice and the European Court of Human Rights, a prohibition against self-incrimination exists in Danish law and applies to cartel investigations.
Undertakings will usually comply with requests, as the DCCA will otherwise have the opportunity to perform a dawn raid in order to obtain the information. At present, there have been no cases under Danish law of non-cooperation with the DCCA during dawn raids.
According to Section 22 of the Act, the DCCA may impose penalties on undertakings and individuals who neglect to provide the DCCA with requested information.
According to Section 23 of the Act, administrative fines can be imposed on an undertaking or individual who – by intention or by gross negligence – omits to meet DCCA requests for information. Equally, fines can be imposed on an undertaking or individual who intentionally or by gross negligence provides the DCCA with incorrect or misleading information.
The DCCA is entitled to access any information, regardless of whether the undertaking considers the information to be confidential. This includes information on agreements entered into by the undertaking, activities in trade associations, accounting records, etc.
The DCCA is generally not allowed to pass on confidential information about a target undertaking or third parties. Furthermore, under Section 13 of the Act, the Danish Open Administration Act does not apply to competition cases, meaning that there is no general right for the public to access documents stemming from the DCCA’s processing of competition cases or investigations, including dawn raids.
The defence counsel for the target of a cartel investigation communicates with the DCCA continuously throughout the cartel investigation and is able to submit arguments at any time.
At some point in the investigation, the target undertaking will receive a preliminary statement of objections. The target undertaking may submit written comments and clarifications within two weeks of receiving the preliminary statement of objections and, subsequently, the DCCA will invite the target to a state-of-play meeting at the DCCA’s premises.
At a later stage of the investigation, the DCCA will issue a final statement of objections. The target undertaking will then have six weeks to submit comments and clarifications to the statement of objections. Following these comments, the DCCA will offer the target undertaking a second state-of-play meeting to discuss the target undertaking’s comments.
A leniency regime much like the EU leniency regime was introduced in Denmark in 2007 but has so far been used only to a limited extent. According to a government report in 2012, the Danish competition authorities and the State Prosecutor received only 11 leniency applications during the period from the introduction of the leniency regime in 2007 until the end of 2011. Of the 11 applications, five were summary applications in cases where the applicants had originally applied for leniency before the European Commission.
Applications for leniency must be submitted to the DCCA. There are no formal requirements as to the form but using the application form provided by the DCCA is recommended. An application for leniency generally covers only the applicant, so an application from an employee covers the employee and not the undertaking. For an application to cover an undertaking, a person with authorisation to sign on behalf of the undertaking must hand in the application, and it should be clearly stated that the undertaking is the applicant. An application on behalf of an undertaking will automatically cover every present and former member of the board, member of administration and other employees, unless otherwise specifically stated.
Under the Danish leniency regime, the first leniency applicant may obtain total immunity from fines and custodial sentences, while subsequent applicants may only have their fines reduced if they submit new, relevant information. Leniency is also available to a “ring-leader”, provided he or she has not coerced other members to participate.
A “marker” system was introduced on 1 January 2018. An undertaking can hand in a preliminary application for leniency and must subsequently deliver further documentation to the DCCA within a time limit fixed by the DCCA. If the application can be finalised within the time limit, the applicant will be given priority from the time of submission of the preliminary application.
As outlined in the DCCA’s guidance on the processes in competition cases, if the undertaking is represented by external counsel, the DCCA will generally correspond with the counsel and not with the employee directly.
Under Section 17(1) of the Act, the DCCA may demand all information it deems necessary. The DCCA may request information directly from the target undertaking or from third parties, such as customers, competitors or suppliers.
The information can include, eg, accounts, accounting records, transcripts of books, other business documents and electronic data. A company cannot be forced to submit information that is self-incriminating, but factual information is usually not regarded as self-incriminating.
The DCCA collects information via a variety of methods and sources. Information gathering can take the form of individual questions addressed to one particular undertaking or the form of questionnaires addressed to a larger number of market participants. The DCCA may also gather information from publicly available sources. The initial information gathering will generally take a non-formal form, and the subject matter of the questions will often be non-specific.
The DCCA will usually set a deadline for the undertaking’s reply. It can impose daily fines on undertakings that do not comply with a request for information.
If undertakings outside the jurisdiction hold information that is relevant to a cartel case in Denmark, the DCCA may seek that information from those undertakings.
The DCCA may seek assistance with the gathering of information from national competition authorities within the European Competition Network, or in the Nordic countries under the Nordic Agreement on Co-operation in Competition Cases.
The DCCA is usually assisted by the police when carrying out dawn raids.
The rules on the exchange of confidential information between authorities are set out in the Danish Public Administration Act, Section 28(2), which states that public authorities may exchange confidential information if the relevant person/undertaking consents to the exchange, or if the information is essential for the receiving authority in relation to a decision by the authority.
Non-confidential information can be exchanged freely between public authorities.
See 1.7 Principles of Comity.
The competition authorities may render their own decision before reporting a case to the State Prosecutor or may choose to report the case directly to the State Prosecutor for criminal investigations.
The State Prosecutor may propose a fine to be imposed on the target undertaking in lieu of initiating criminal procedures. If the undertaking does not accept the fine, the size of the fine will be determined by the courts under the rules on criminal procedure.
Once criminal charges are brought, the full rights of criminal defence apply. Accordingly, the undertaking is not obliged to assist in the investigation or to tell the truth. The undertaking’s defence counsel will have full access to the case at all times and, unless specific orders to the contrary are given, the undertaking may review all documents with the defence counsel at his or her premises.
Decisions of the DCCA and the Council are subject to appeal to the DCAT and, subsequently, to the courts.
Appeals in the first instance are made by submitting a complaint to the DCAT. Submission must be made within four weeks of a decision being communicated to the party concerned, although the DCAT may accept complaints submitted after the expiry of the four-week time limit under special circumstances. Each party may submit two written pleas and ask for oral proceedings. The assessment by the DCAT, whose chairman is a supreme court judge, is similar to an appeal process before the ordinary courts. However, no witnesses are allowed in the proceedings before the DCAT.
Decisions by the DCAT may be appealed to the courts by filing a writ against the Council within eight weeks of the DCAT’s decision being communicated to the party concerned.
Parties to a competition case (the addressees) have the right to access the file concerning documents related to the case. Under certain circumstances, the DCCA may choose to provide a more extensive right of access to documents by applying a principle of "extended openness". However, some information may be redacted; for example, due to confidentiality.
During court proceedings, the party concerned may apply for a disclosure order, meaning that the court can instruct the opposing party (the Council) to disclose documents on which the party concerned intends to rely during the trial. A disclosure order can further be imposed by the court on third parties if the documents in question are deemed important to the case.
In principle, the DCCA conducts separate proceedings in relation to each undertaking under investigation. Each undertaking is a party to its own separate case, and every party obtains a separate decision. However, typically, the decisions rendered are basically identical. In essence, the separate cases are thus one single proceeding against all participating undertakings. If all undertakings appeal their decision, the appeals will be processed collectively.
The Act does not include provisions regarding the burden of proof in competition cases. Thus, the general rules under Danish law on the burden of proof apply.
Generally, it is for the competition authorities to prove their case, including the existence of an anti-competitive agreement under Section 6 of the Act. If the authorities prove the existence of an anti-competitive agreement, it is for the parties to prove that the agreement fulfils the conditions of the efficiency defence in Section 8 (similar to Article 101(3) of the TFEU).
The DCCA acts as the finder of fact in enforcement proceedings. The DCCA gathers information that is relevant to its case and is obliged to assess information that speaks both for and against the existence of a cartel. The parties concerned may also gather information for their defence.
The law is applied to the facts of the case by the DCCA, the Council, the Appeals Tribunal and the courts.
In criminal cases, the DCCA and the police act as the finders of fact. The State Prosecutor and the courts apply the law to the facts in criminal cases.
All evidence can be submitted, including evidence obtained in other proceedings, evidence proffered by an applicant for leniency and evidence from other jurisdictions.
In civil proceedings, the competition authorities and the courts are generally free to assess evidence, and there is no hierarchy of evidence. Accordingly, the authorities and the courts determine when the burden of proof has been lifted.
In criminal proceedings, the principle of in dubio pro reo applies. Consequently, the burden of proof is not lifted if there is reasonable doubt as to the guilt of the defendant. In order for fines to be imposed, the authorities must prove that an infringement of the competition rules was intentional or grossly negligent, while imprisonment requires proof that the infringement was intentional and of a grave nature.
The general procedural rules apply as regards the possibility of including retained experts in competition cases. Expert opinions are often used as evidence in competition cases by both the claimant and the defendant, including argumentation from economists.
See 2.12 Attorney-Client Privilege.
Cases involving the same or related facts will often be processed together. The general procedural rules apply.
As a general rule, only the State Prosecutor or the courts can impose sanctions. Typically, the State Prosecutor will propose a fine, and this can be tried before the courts. However, if case law exists regarding an identical violation of competition rules, the DCCA may, subject to approval by the State Prosecutor, propose the level of the fine to be paid by the target undertaking, based on this case law. If the target undertaking does not accept a fine proposed by the State Prosecutor or the DCCA, the case will be tried by the courts.
A recent EU directive (Directive 2019/1 of 11 December 2018 to empower the competition authorities of the member states to be more effective enforcers and to ensure the proper functioning of the internal market) obliges EU member states to assign national competition authorities the power to impose fines or to request for a court to impose fines in cases regarding infringements of Articles 101 and 102 of the TFEU without involving the State Prosecutor. The Directive does not require the forthcoming, national rules on fining to cover cases regarding infringements of national competition laws only. It remains to be seen how the Directive will be implemented in Denmark and, as such, whether the fining powers assigned to the Danish competition authorities will cover cases regarding infringements of EU competition law and Danish competition law alike. The deadline for implementing the Directive is 21 February 2021.
Plea bargaining, as such, does not exist under Danish law. However, the DCCA and the State Prosecutor will often enter into negotiations or talks with the undertakings involved regarding the level of the fine to be imposed. Negotiations may include considerations regarding mitigating circumstances, as outlined in Sections 82-83 of the Criminal Code, including any inability to pay.
Undertakings and individuals may accept a ticket fine in lieu of prosecution before either the State Prosecutor or the DCCA, and in this way avoid criminal trial in open court (such fixed penalty notices issued by the DCCA are subject to approval by the State Prosecutor). Undertakings that contact the DCCA in order to settle the case will generally be granted a reduction in the fine.
If liability is established by the competition authorities or the courts, the decision will form the base of any follow-up action for damages, meaning that the claimant in such a case will not be required to prove the existence of a cartel (Section 7(1) of the Competition Damages Act).
In cases where intentional or grossly negligent infringements of competition law are established, criminal sanctions may be imposed on both individuals and undertakings.
As of 1 March 2013, prison sentences may be imposed on individuals if the individual has intentionally participated in a cartel, and if the breach was particularly grave, especially due to the extent of the infringement or its potentially damaging effects. The term of a prison sentence is usually up to one and a half years but may be extended to up to six years in cases involving aggravating circumstances (Section 299c of the Danish Criminal Code). In extraordinary circumstances, the punishment can result in nine years of imprisonment.
In addition to the introduction of prison sanctions, the 2013 amendment to the Act involved a significant increase in the level of fines imposed for participation in a cartel. When meting out a penalty (fines and/or imprisonment), consideration must be given to the gravity and duration of the infringement. As regards legal persons, consideration must further be given to the undertaking’s turnover (Section 23(5) of the Act).
Under the new sanctions regime, the indicative level of fines imposed on legal persons for cartel behaviour exceeds DKK20 million, while the indicative level for fines imposed on individuals is DKK200,000.
According to the preparatory works for the Act, and in line with EU competition law, fines imposed on legal persons should not exceed 10% of their worldwide turnover.
It should be noted that the courts have considerable discretion when imposing penalties. The courts have yet to impose the first prison sentence for cartel participation, but prison sentences are, when relevant, expected to be imposed on members of the board and the management. The State Prosecutor has, as stated under 1.2 Public Enforcement Agencies and Scope of Liabilities, Penalties and Awards, unsuccessfully asserted claims for unconditional imprisonment in cartel cases as seen in, inter alia, the Danish Eastern High Court judgment of 21 December 2018 and the District Court of Hilleroed judgment of 11 January 2019 and the District Court of Roskilde judgment of 4 April 2019 concerning bid rigging between demolition contractors.
If case law exists regarding an identical violation of competition rules, the DCCA may propose the level of fine to be paid by the target undertaking based on this case law (Section 23b of the Act).
Pursuant to the preparatory works of the Act, if the undertaking concerned has a compliance programme in place at the time of the offence and continues to follow such a programme, this may constitute mitigating circumstances that can lead to a reduction of the fine, provided that the undertaking does in fact seek to ensure compliance with the competition rules.
The Council’s decisions are subject to appeal to the DCAT and, subsequently, to the courts. Criminal cases are decided by the courts with the right of full appeal.
The Competition Damages Act that implements the Antitrust Damages Directive applies to infringements of the Danish Competition Act and Articles 101 and 102 of the TFEU.
Pursuant to the Competition Damages Act, any natural or legal person who has suffered harm caused by an infringement of competition law is able to claim and to obtain full compensation for that harm.
Damages claims related to cartel infringements may be brought before the Danish courts and do not necessitate a preceding decision by the competition authorities. In most cases, however, the claimant will file a complaint to the competition authorities before or concurrently with the court proceedings if the competition authorities have not already initiated investigations concerning the alleged cartel conduct.
Damages in the form of payments are most commonly sought.
There are no threshold requirements for bringing actions for damages before the Danish courts, but simpler rules of procedure can apply for smaller claims.
It is possible under Danish law to bring class actions for follow-on damage claims. Class actions are regulated by Chapter 23a of the Danish Administration of Justice Act and are generally subject to the same procedures as other court cases. However, a distinctive feature of claims connected to infringements of competition law is that the Danish Consumer Ombudsman may be appointed as a representative for the class action.
The right to bring a collective claim requires the following, inter alia:
The Danish rules on indirect purchasers and “passing-on” defences are similar to EU competition law.
The Competition Damages Act stipulates that full compensation for a breach of competition law shall place the claimant in the position they would have been in if the infringement had not been committed. Accordingly, compensation shall include actual losses as well as loss of profit and payment of interest.
According to the Competition Damages Act, it is presumed that cartel infringements cause harm.
A cartel participant who is met with a damages claim in court can invoke a passing-on defence. The burden of proving that an overcharge was passed on lies with the defendant, who may reasonably require disclosure from the claimant or third parties.
The burden of proving that the cartel infringement resulted in an overcharge lies with the indirect purchaser. If an indirect purchaser can prove that (i) the infringer has committed an infringement of competition law, (ii) the infringement of competition law has resulted in an overcharge for the direct purchaser of the infringer, and (iii) the indirect purchaser has purchased the goods or services that were the object of the infringement of competition law, the indirect purchaser shall be deemed to have proved that a passing-on of the overcharge to the indirect purchaser has occurred.
In damages cases before the Danish courts, the evidential burden of proof regarding the existence and amount of the alleged loss generally rests with the claimant. Important evidence may, in principle, be produced by the parties, and the courts are free to assess evidence. In more complex cases where expert evidence is needed to estimate the loss, the parties will often initiate an expert valuation/legal survey process controlled by the court.
Evidence from governmental investigations or proceedings is admissible in private civil litigation cases regarding alleged cartel infringements. However, a claimant can only adduce such evidence in a court case if they have access to the evidence.
The court can order third parties to disclose relevant evidence controlled by those third parties, upon the claimant’s request. However, if the requested evidence is included in a case file of the competition authorities, the court must consider the need to safeguard the effectiveness of the public enforcement of competition law when deciding whether to order disclosure. The court shall also consider whether the request is sufficiently narrow and specified.
Some categories of evidence may only be disclosed after the competition authorities have closed their proceedings, including information prepared specifically for the competition authority's proceedings, information that the competition authority has drawn up and sent to the parties in the course of its proceedings, and settlement submissions that have been withdrawn. Furthermore, the courts cannot order a party, a third party or the competition authorities to disclose leniency statements or settlement submissions that have not been withdrawn.
Settled cases are not published, so no accurate information on the proportion of cases that are settled is available. However, it is believed that the majority of cases on damages are settled.
Due to the complexity of the assessments in such cases, the typical timeframe from inception of the claim to resolution is at least 24 to 36 months. Depending on the specific circumstances of the case, the timeframe may be considerably longer. If the judgment is appealed, the timeframe will typically be extended by at least another 12 to 24 months, and often significantly longer.
Pursuant to general procedural rules in Danish court cases, the unsuccessful party to the proceedings must reimburse the successful party for its costs related to the case. The court determines the amount, which can include legal fees (counsel’s fees), court fees, costs related to obtaining and preserving evidence, witness fees, costs of translations, etc. In practice, the successful party’s costs are only partly reimbursed, as the legal fees are awarded discretionarily on the basis of the claim and not according to the actual costs incurred.
See 5.6 Compensation of Legal Representatives.
Judgments rendered by the Danish courts of first instance (the district courts or the Maritime and Commercial Court) may be appealed to the Danish High Courts within four weeks of the judgment. In principle, an appeals case entails a full judicial and factual review of the case presented in first instance.
In general, cartel cases are processed and decided in accordance with EU law and, thus, in a manner similar to the rest of the EU. The material competition case is handled in compliance with Article 101 of the TFEU, and damages cases are handled in line with the Damages Directive, as well as the general Danish rules on damages.
The DCCA has issued the following written guidelines, which are relevant for cartel cases (all in Danish).
The Council has issued a short notice addressing the competition issues that may arise in relation to COVID-19.
Initially, the notice emphasises that the competition rules apply in times of crisis. Specifically regarding cartels, the notice recognises that it may be necessary to collaborate with competitors in order to produce enough safety equipment, to ensure the supply of goods to all consumers or to prevent the virus from spreading. The DCCA will take the purpose of such agreements into careful consideration and usually deem these unproblematic under competition law.
However, the DCCA will keep a close eye on undertakings that seem to exploit this critical situation to co-ordinate prices, limit output, share markets, share information or the like. The notice underlines that the damage brought by a cartel may be even greater than usual in times of crisis, as undertakings and consumers may be more vulnerable.
The notice can be found here (in Danish): https://www.kfst.dk/nyheder/kfst/nyheder/fakta/2020/20200323-meddelelse-fra-konkurrenceraadet-om-konkurrencereglerne-og-covid-19/.