When does an agreement have as its purpose to restrict competition?

The parties had entered into two agreements, by which the parties had (1) agreed to raise the end-user price of HMN’s servicing of heaters, which would allow the subcontractors to raise their subscription prices, and (2) agreed to lower the prices charged to HMN’s customers by the sub-contractors for spare parts.

In the High Court case, the parties asserted that the previous decision by the National Competition Council was wrong, as the National Competition Council did not consider the effect of the two agreements, but instead focused solely on the anti-competitive intent of the agreement to fix the price of subscriptions.

The parties therefore argued that as the agreement did not just contain such a price-fixing agreement, but also contained an agreement to lower other prices, i.e. the prices of spare parts, meaning that the total price paid by the customers was lowered, the agreements should be considered as one agreement which would not have an anti-competitive effect.

The High Court, however, found that the agreements should be considered as two distinct agreements. As a result of this, it was further found that the agreement between HMN and its sub-contractors to fix the price of subscriptions had an anti-competitive intent, and therefore constituted an infringement of Article 6(1) of the Danish Competition Act irrespective of the agreement to lower other prices.

In finding this, the High Court held that the recent decisional practice from the ECJ concerning the intent of anti-competitive agreements, namely in Budapest Bank and Generics, did not mean that a full analysis of the anticompetitive effects of an agreement should be carried out if anticompetitive intent could be clearly established.

In addition, the court rejected that the agreement could be exempted under Article 8 of the Danish Competition Act (corresponding to Article 101(3) TFEU), as HMN had not proved that the agreement concerning subscription services was necessary to provide the savings that would arise from the other agreement.

For further information, please refer to the decision by the High Court in Danish here.

For more information please contact Morten Nissen or Alexander Brøchner.