Danish producer of kids-and baby gear fined 8.000.000 DKK for Resale Price Maintenance

Published

Apr 14 2022

Written By

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.

Morten Nissen

Partner
Denmark

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.

Practices

Competition Law

Regions

Western Europe

A Danish company that produces baby sleeping bags and car seats (Company) has admitted to infringing the prohibition against resale price maintenance for a period of 5 years to the Danish Competition and Consumer Agency. As a result, the Company was ordered to pay a fine of DKK 8.000.000 (EUR 1.067.000) by the Danish Competition Council.

The fine and penalty notice came after the Company imposed minimum resale prices on its distributors. In addition to enforcing a recommended retail price, the Company limited its distributors’ options to grant rebates and restricted the online sales for certain product categories from the distributors’ web shops.

Due to the cross-border character of the infringement, the Danish Competition Council considered the applicability of the “NAAT-rule” (No Appreciable Affectation of Trade) from the Commission’s Guidelines (2004/C 101/07). However, as the market shares of the parties exceeded 5 per cent, the agreement was not able to fulfil the cumulative conditions of not being capable of appreciably affecting trade between Member States. Consequently, the Company’s competition law infringement was subject to the Danish Competition Act as well as Article 101 under the TFEU.

According to the Danish Competition Council, the size of the fine was determined based on the seriousness and duration of the infringement as well as the size of the Company’s turnover. As a mitigating circumstance for the size of the fine, the Danish Competition Council attached importance to the fact that the Company expressed an intention to ensure that all of the Company's employees comply with the competition rules going forward. The Company’s cooperation in the investigation of the case was also considered.

The fine and penalty notice from the Danish Competition Council is only available in Danish and can be found here.

Please contact Morten Nissen or Frederik Haugsted for more information.