Decision on purchasing association’s anti-competitive behaviour affirmed

The Danish Competition Appeals Tribunal’s decision of 21 December 2018 – Team DS a.m.b.a.

By assistant attorney Simon Christensen and senior intern Jens-Christian Steffensen

Background

Team DS is a purchasing association with some 53 members, all independent camera shops. The association buys products in the form of cameras and camera accessories to keep in stock for its members to purchase. Internally, it operates an electronic notice board, which it uses to communicate with its members. Correspondence between the association and its members takes place i.a. on the notice board, via emails, and at general meetings of Team DS.

The Danish Competition Council found that Team DS had engaged in the unlawful coordination of prices. The coordination had consisted of Team DS having, among other things:

• announced fixed prices to its members;
• encouraged its members to maintain the prices then in force;
• called for a raising of the prices; 
• “threatened” to deprive online shops of products if they failed to adhere to announced pricing. 

The Danish Competition Council found that in so doing Team DS had – at least for a period of 5½ years – unlawfully coordinated prices for its members and that Team DS had exchanged information to the members about the prices and other competition parameters of other members.

Team DS was therefore ordered to immediately cease and desist and was also reported to the Danish State Prosecutor for Serious Economic and International Crime to face further prosecution.

Team DS appealed the order to the Danish Competition Appeals Tribunal, claiming annulment of the Council’s decision. 

The Competition Appeals Tribunal’s ruling

The Appeals Tribunal found first and foremost that Team DS is an association of undertakings, comprised by section 6 of the Danish Competition Act and Art. 101 TFEU. According to the Appeals Tribunal, the communications from Team DS to its members expressed the views of the association, in that many of them had been posted by Team DS’s managing director and purchasing manager. The chairman of the board of directors had also been briefed about some of them before they were posted.

On that basis the Appeals Tribunal found the announcements to be suitable to effectively coordinate the members’ behaviour in the market and that they were, consequently, intended to restrict competition, given that the announcements concerned a fixing of prices among competitors. It mattered not, in this regard, that the information was already fully or partially public, because the announcing of prices was accompanied by an encouragement to the members to align their prices.

The fact that the coordination concerned only a small part of the market and a small part of the dealers’ overall product assortment was also, in the Appeals Tribunal’s opinion, of no consequence, as the Danish Competition Council’s assessment was held to be sufficient in that regard.

The lesson from the decision?

The decision of the Danish Competition Appeals Tribunal emphasises the importance for purchasing associations of making sure they do not indirectly act in a way that may be construed as anti-competitive.