The Competition Council rules that the association of Peugeot dealers has violated competition law – Commentary

Facts
Decision
Comment

On February 23, 2022, the Danish Competition Council (DCC) issued a decision on a case in which the association of Peugeot car dealers, Peugeot Forhandler Foreningen (PFF), collectively boycotted bilbasen.dk, a digital marketplace platform who advertises cars. In its judgment, the DCC said the boycott violated Article 6 of the Danish Competition Act and Article 101(1) of the Treaty on the Functioning of the European Union (TFEU).

Facts

Between 2012 and 2014, board members and other members of PFF had collectively decided via email to boycott the digital marketplace platform bilbasen.dk. The emails exchanged indicated that Peugeot dealers should stop advertising on the platform in order to promote the competing platform biltorvet.dk. The boycott aimed to limit competition in the Danish market of digital marketplaces that advertise cars.

PFF invoked a defense on the grounds of pro-competitive effects pursuant to Article 8(1) of the Danish Competition Act and Article 101(3) of the TFEU. PFF felt that the reason for promoting biltorvet.dk was to ensure that there was a viable competitor to bilbasen.dk, which is the largest platform in the Danish digital marketplace market for the car advertising. PFF claimed that bilbasen.dk subsequently lowered its prices and that the boycott prompted the platform to improve its services for the benefit of its consumers.

Decision

The DCC found that there was a decision within PFF to boycott bilbasen.dk and that the association had coordinated the actions of its members in this regard. The purpose of the decision was to restrict competition in the Danish market for digital car advertising marketplaces. The agreement was therefore an agreement to limit competition “by object”.

Furthermore, the DCC concluded that the collective boycott could have had adverse effects both on potential car buyers on bilbasen.dk and on car sellers advertising on bilbasen.dk. The decision to collectively boycott bilbasen.dk to promote biltorvet.dk constituted a significant restriction of competition in violation of Danish competition law. Network effects within the relevant market may have increased the harmful effects of the collective boycott.

The DCC found that PFF had not sufficiently demonstrated that the decision had had pro-competitive effects – for example, it had not demonstrated that prices on bilbasen.dk had been lowered or, if they had, that the collective boycott was the cause. PFF had also not demonstrated improvements on bilbasen.dk during the relevant period, nor that the collective boycott was the cause. Furthermore, PFF did not explain why the boycott was necessary to make biltorvet.dk, which had existed since 2001, a viable competitor to bilbasen.dk. The conditions for a derogation from the prohibition of anti-competitive agreements pursuant to Article 8(1) of the Danish Competition Act and Article 101(3) TFEU were therefore not met.

On these grounds, the DCC found that PFF violated Article 6 of the Danish Competition Act and Article 101(1) TFEU.

The DCC ordered PFF to immediately cease the violation and to refrain from such behavior in the future. In addition, PFF was ordered to inform its members of the DCC’s decision. The matter was also reported to the police.

Comment

This case is an example of a situation where the potential pro-competitive effects were not sufficient to constitute a waiver of the prohibition on anti-competitive agreements. It also shows the limits imposed by competition law on what business associations can do to large digital platforms in a market with network effects. This builds on previous decisions the DCC has made in two similar cases.

In Boliga.dk, the DCC found a breach of Danish competition law because the real estate agents behind housing portal Boligsiden.dk had agreed to boycott competing housing portal Boliga.dk. In The Association of Automotive Repair Shops in Denmark, the DCC also found an infringement, because the organization had called on its members to boycott the Autobutler.dk portal. A sin Boliga.dk, the DCC pointed out that the competitive risk had been removed. Associations of undertakings need to know when their behavior amounts to decisions of associations of undertakings and when concerted practices between members constitute an infringement of competition law.

For more information on this subject, please contact Martin André Dittmer or Rebecca Fink Joensen at Gorrissen Federspiel ​by phone (+45 33 41 41 41​) or by e-mail ([email protected] or [email protected]). The Gorrissen Federspiel​ website can be accessed at www.gorrissenfederspiel.com.