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18 October 2018
The so-called 'by object box' has been widely debated among legal professionals in Denmark and the rest of the European Union. On 12 September 2018 the Competition Appeals Tribunal (DCAT) rendered a decision in a case concerning the possible coordination of conduct regarding industry standards in the roofing felt business. DCAT remitted the case to the Competition Council (DCC) for renewed assessment because of an insufficient by object assessment. It is still undecided whether the DCC will reassess the case.
The Competition and Consumer Authority started the case in 2014 after receiving complaints from competitors (roofing felt manufacturers and importers) regarding standard-setting procedures and the objectivity of the industry standards (the TOR standards).
The TOR standards were voluntary, technical quality standards in the roofing felt business which had been widely used since 1981. The standards were developed by Tagpapbranchens Oplysningsråd (TOR), the trade council established by the Danish trade association for the roofing felt industry (DTB). The standards were drawn up to promote product credibility and regain the market's trust in using roofing felt following a number of construction scandals in the 1970s. In 2014 a labelling initiative was introduced by an entity under TOR that would grant any company the right to use the 'TOR Approved' label on products that complied with the TOR standards. Following the DCC's decision, the TOR standards no longer exist.
In May 2017 the DCC found that the two Danish roofing felt manufacturers, Icopal Danmark ApS and Nordic Waterproofing A/S (NWP), along with the DTB and TOR, had infringed Article 101 of the Treaty on the Functioning of the European Union and the equivalent Danish provision. According to the DCC, five different types of conduct constituted a "broader restrictive agreement" which aimed to restrict competition.
Relying on email correspondence in particular, the DCC concluded that the parties had engaged in a broader restrictive agreement in the context of the TOR standards. This concerted practice included, among other things, commercial influence by setting standards and coordination to foreclose competitors, including the alleged limitation of product supply.
The DCC compared the conduct to a market sharing agreement and therefore concluded that a brief analysis of the economic and legal context was sufficient to establish that the conduct had aimed to restrict competition. The DCC did not assess the potential anti-competitive effects, which would have required proof of effects in the market.
All four parties to the case appealed the DCC's decision to DCAT. DCAT remitted the case, as an anti-competitive object had not been proved. It emphasised the following:
This decision is significant in terms of industry and technical standards in general, as well as for the limits of cooperation in this respect. It also sheds light on the category of by object infringements, which has been used extensively by the competition authorities due to its lighter burden of proof.
The Competition and Consumer Authority has stated that it will now examine the decision and contemplate whether to reopen or close the case. If the case is reopened, there will be a heavier burden of proof for the authorities.
For further information on this topic please contact Martin André Dittmer or Sofie Kyllesbech Andersen at Gorrissen Federspiel by telephone (+45 33 41 41 41) or email (firstname.lastname@example.org or email@example.com). The Gorrissen Federspiel website can be accessed at www.gorrissenfederspiel.com.
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