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21 February 2019
On 30 January 2019 the Competition Council handed down a highly publicised decision finding that the ambulance and assistance company Falck Danmark A/S had abused its dominant position on the Danish market for ambulance and pre-hospital support services by establishing and carrying out a general strategy to exclude its competitor, BIOS Ambulance Services Danmark A/S (the Danish subsidiary of the Dutch company BIOS-groep), from the market.
In 2014 the Region of Southern Denmark conducted a tender for ambulance and pre-hospital support services for contracts due to start on 1 September 2015 and last 10 years. The tender was divided into four partial agreements, three of which were won by BIOS and the fourth was won by a consortium, which was later bought by Falck on 8 April 2015.
BIOS went into bankruptcy on 27 July 2016, and the Region of Southern Denmark took over the responsibility of the ambulance services in the areas originally won by BIOS.
Falck is the world's biggest ambulance service company and enjoys a strong market position, being the only company offering nationwide ambulance services in Denmark.
The Competition Council found that after losing the tender, Falck had established a general strategy capable of restricting competition with the aim of excluding BIOS from the Danish market. The strategy was both internal and external; Falck had attempted to influence the general public, including politicians and news media as well as specifically targeting ambulance paramedics employed by Falck to prevent BIOS from employing the necessary personnel. Given that paramedics were a scarce resource, BIOS would have to recruit some of the paramedics employed by Falck in order to fulfil the contract with the region.
According to the Competition Council, the strategy comprised a multitude of exclusionary practices, which were not in accordance with the principle of competition on the merits. According to the Competition Council, Falck had:
These practices supplemented and strengthened each other and contributed to the exclusion of BIOS from the market. Further, a large part of the exclusionary practices were carried out at arm's length and even double arm's length by using, among other things, communication agencies, so that the activities could not be traced back to Falck.
Given that the Competition Council also found that Falck enjoyed a dominant position in the Danish market for ambulance services and that there was no objective justification for the practices, it concluded that Falck had abused its dominant position through the employment of the abovementioned strategy.
The decision sheds further light on the wide array of practices that can be deemed exclusionary. Interestingly, the Competition Council found that even if some of the stories about BIOS were not factually incorrect, the fact that Falck's communication strategy had been conducted at arm's length and double arm's length was in itself misleading and manipulative and thus not competition on the merits.
The ripple effects of this decision are potentially extensive. Falck has, contrary to initial indications, announced that the decision will not be appealed.
The Competition Council has announced its plan to hand the case over to the state prosecutor for serious economic and international crime, who reserves the right to press charges. BIOS-groep has announced its intention to pursue a damage claim against Falck and report individuals connected to the abuse to the police. Further, the bankruptcy trustee overseeing BIOS's bankruptcy estate has announced its intention to pursue a damage claim. Finally, the Region of Southern Denmark has announced that it is evaluating the council's decision and whether there is a basis for a damage claim.
In an interview regarding the decision, Danish Minister for Public Sector Innovation Sophie Løhde stated that she will look at the possibility of increasing the potential exclusion period (currently two years) during which private undertakings that are convicted of law infringements cannot partake in public tenders.
For further information on this topic please contact Martin André Dittmer or Christian Liborius at Gorrissen Federspiel by telephone (+45 33 41 41 41) or email (email@example.com or firstname.lastname@example.org). The Gorrissen Federspiel website can be accessed at www.gorrissenfederspiel.com.
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