Software supplier commitment in case concerning software delivery

The case in brief

Wolters Kluwer Danmark A/S provides, among other things, software for personal tax calculation. This type of software, which can be used for preparation of tax returns and preliminary income assessments, calculation of provisional and final tax, and processing and optimization of payment arrangements for personally run undertakings, is used in particular by accountants and tax advisers.

The case was opened following a complaint against Wolters Kluwer's delivery agreements. The Danish Competition and Consumer Authority reviewed a number of agreements effective within the period 2014-2023. The Authority found that Wolters Kluwer in most of the agreements had inserted clauses preventing termination for up to 3 years and 4 months. In addition, a discount was conditional on the customer signing a multi-year agreement.

Following its investigations, the Authority found that Wolters Kluwer's terms and conditions could constitute an infringement of the Competition Act's prohibition of abuse of a dominant position. The reason was that the terms and conditions could entail that customers would not be able to purchase personal tax calculation software from other providers in the non-terminable periods. Other providers were thereby prevented from competing for customer demand.

In a market characterised by most customers using only one supplier, the Authority found that the terms could function as excluding purchase obligations. In actual fact, they imposed on the customers an obligation to purchase all or most of their demand from Wolters Kluwer during a multi-year period. The adverse effect thereof could include restriction of competition and possible foreclosure of the market implying that existing or potential competitors would wholly or partially be prevented from providing software for personal tax calculation.

Wolters Kluwer's commitment

In order to respond to the Authority's concerns, Wolters Kluwer decided to make a commitment which the Competition Council has accepted. The case has therefore been closed without finally determining whether Wolters Kluwer's terms and conditions constitute an infringement of the competition rules.

The commitment implies that Wolters Kluwer must:

• remove from its agreements on delivery of software for personal tax calculation all clauses about non-terminability and about discounts being conditional upon a multi-year agreement;
• in the future, in such agreements, operate with a 3-month notice period to expire at the end of a product model year, and to support and maintain the specific models from the signing of an agreement and for a relevant period of typically 4-5 years, regardless of whether a customer after expiry of the model should choose a similar product from another operator;
• remove from its agreements on delivery of software for personal tax calculation all clauses about discounts being conditional upon a multi-year agreement;
• inform the customers concerned of the commitment.

The commitment enters into force on the date of the Competition Council's decision and will remain in force until 31 August 2027.

Read the Competition Council's decision (in Danish)