Denmark: Put on your Wellingtons, fishing expeditions allowed
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The Maritime and Commercial Court has ruled in favour of the Danish Competition and Consumer Authority (“DCCA”) in a judgment, where it found that that evidence obtained in a dawn raid was not “out of scope”.
In March 2023, the Danish Competition Council (“DCC”) found that the Danish chain of independent retailers of baby and children's products – ØnskeBørn A/S (“ØnskeBørn”) – had infringed Article 6 of the Danish Competition Act and Article 101(1) TFEU.
The finding of an infringement was based on the evidence obtained in a dawn raid executed in November 2020, which demonstrated that ØnskeBørn had coordinated prices on certain baby and children’s products between its independent members.
However, according to ØnskeBørn, the DCCA did not have the right to use such material concerning horizontal coordination of prices from the aforementioned dawn raid. This claim was based on the fact that the background for the dawn raid was unquestionably that the DCCA had received a series of inquiries regarding possible retail price maintenance in the baby and children's products industry, i.e. vertical restrictions. ØnskeBørn therefore argued that the DCCA’s use of the material was "out of scope" in relation to the basis of the inspection. According to ØnskeBørn, the DCCA should therefore have carried out a separate investigation concerning the matter of the horizontal price coordination.
However, the Maritime and Commercial Court disagreed with ØnskeBørn. In its judgment, the court found that the purpose of the decision for the dawn raid was to confirm or disprove the DCCA’s presumption that there were anti-competitive activities taking place in the industry in the form of agreements, decisions, or coordinated practices that directly or indirectly had at its object or effect to restrict competition. While this was based on an indication of retail price maintenance, the court found that this did not entail that the materials gathered in the dawn rate was to be excluded from being used for other types of anticompetitive agreements.
It is debatable whether this judgment entails that the requirement of a certain level of suspicion before the DCCA can be allowed to conduct an investigation of a company (under Article 18 of the Danish Competition Act) becomes illusory. If it is generally allowed for the DCCA to use documents from an investigation that was originally based on other grounds, it may result in the authority going on "fishing expeditions" at companies, which the provision should protect against. Consequently, there is a risk that the provision loses its protective value.
ØnskeBørn has appealed the ruling.
For more information, please contact Morten Nissen, Alexander Brøchner or Nanna Sofie Krabbe.
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