Beyond the boiling point – Companies and employees fined for coordinating prices for servicing natural gas furnaces

Last year a natural gas company, Hovedstadsregionens og Midt-Nords Naturgasselskab I/S (“HMN”), a trade association and two subcontractors, were found to have infringed Article 6(1) of the Danish Competition Act (equivalent to Article 101(1) TFEU) (Please refer to our article on this case here).

In the case examined by the Danish High Court, the parties had entered into two agreements, by which the parties had agreed: (i) to raise the end-user price of HMN’s servicing of heaters, which would allow the subcontractors to raise their subscription prices, and (i) to lower the prices charged to HMN’s customers by the sub-contractors for spare parts.

The parties argued that the agreements should be regarded as one agreement which would not have an anti-competitive effect as the agreement did not solely contain a price-fixing agreement, but also contained an agreement to lower other prices, resulting in a lower total price paid by the customers. Nonetheless, the High Court found that the agreements should be considered as two distinct agreements, which, as a result of the anti-competitive intent, infringed Article 6(1) of the Danish Competition Act.

Following the High Court judgement, the Danish Competition Council reported the infringement to the State Prosecutor for Serious Economic and International Crime. The latter brought charges against HMN, one of the subcontractors/competitors, Gastech-Energi (“GE”), as well as four individuals employed by the involved companies. The remaining subcontractor/competitor involved in the High Court case had already gone bankrupt, and the trade association had been liquidated.

In the criminal case, the court established that, in addition to HMN and GE’s anticompetitive activities, all four employees involved in the matter had participated in entering into an anticompetitive agreement between the companies and the trade association.

However, the court did not consider that the anti-competitive agreement constituted an intentional or gross negligent infringement, even if it concerned price fixing. Consequently, there was no basis to punish the individuals with imprisonment, as the prosecution had demanded.

Instead, the anti-competitive agreement was considered as a serious breach of the Danish Competition Act. Accordingly, HMN and GE were each fined DKK 8,000,000 (approximately € 1,075,000), and the four employees were fined respectively DKK 100,000 (€ 13,000), DKK 100,000 (€ 13,000), DKK 75,000 (€ 10,000), and DKK 50,000 (€ 6,700).

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