Sportswear producer fined for Resale Price Maintenance by Danish City Court

Published

Jun 14 2021

Written By

I'm a partner and co-head of our international Competition & EU group. I also lead the Competition & EU team in Denmark. I have a particular focus on applying competition & EU law as a tool to achieve specific and measurable business objectives for our clients.

Frederik Haugsted

Associate
Denmark

I am an Associate in the EU & Competition and International Projects and Procurement groups. I work with a strong commitment to achieve pragmatic and measurable commercial solutions for our clients.

Practices

Sectors

Retail and Consumer

Countries

Denmark

In 2017, a competitor to a Danish sportswear producer filed a complaint with the Danish Competition and Consumer Authority (“DCCA”) regarding resale price maintenance of said producer. The sportswear producer had put pressure on its distributors to respect the recommended price as a minimum price.

Following an investigation, the DCCA handed over the case to the Danish State Prosecutor for Serious Economic and International Crime in order for them to initiate criminal proceedings (as in Denmark fines for competition law infringements can be imposed only in the course of criminal proceedings).

The resale price maintenance was documented in court with reference to e-mail correspondence between the parties. In its judgement, the City Court of Aalborg attached significant importance to the following correspondence containing the anti-competitive resale price maintenance (courtesy translation by Bird & Bird):

“I am writing to you with the purpose of emphasizing that we find it very difficult to accept your low price setting on the products on the web-page. We will of course like to sell our goods to you and we are happy about all your efforts, but your low price setting is extremely destructive for us. The consequence may be that we will have to stop the cooperation… […]”

and furthermore,

“I see that you again have decided to sell our products at a heavily reduced price. According to my calculations, your profit of selling our products with a discount of 25 % must be minimal and not profitable. Consequently, I have decided to close your account to avoid any further unsustainable situations.”

On 7 May 2021, the City Court of Aalborg sentenced the sportwear producer to pay a fine of DKK 500.000 (approx. EUR 68.000). Furthermore, a member of management was individually sentenced to pay a fine of DKK 50.000 (approx. EUR 6.800).

The judgement of the City Court of Aalborg is available in Danish here.

Please contact Morten Nissen or Frederik Haugsted for more information.