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Co-operation agreements between real estate agents and a mortgage credit institution

26. maj 2004

3/1120-0301-0233/SKN/SEK The Council meeting 26 May 2004

The Competition Council has approved three agreements on co-operation between the real estate agents EDC and SAFE and the mortgage credit institution BRFkredit.

EDC is the largest chain of real estate agents in Denmark covering 20-25 % of the property market, whereas the SAFE chain only stands for 3-6 % of the same market.

BRFkredit is the fourth largest mortgage credit institution in Denmark with a market share of about 9 %.

EDC and BRFkredit each own half of the shares in Mægler-partner, a company founded to finance and secure the continuance of real estate agents within the EDC chain.

The three agreements have as their object:

  • to enhance the competitiveness of the two real estate chains
  • to give SAFE access to the liaisons of EDC e.g. BRFkredit
  • to widen and secure BRFkredit’s base of distributors
  • The first agreement concerns the relations between EDC and SAFE.

The agreement points out areas of future co-operation between the parties including education, IT and marketing. The agreement also establishes the framework for further agreements between EDC and its liaisons, including BRFkredit, and the individual members of the SAFE chain. The agree-ment was found to contain provisions in violation of Section 6 of the Danish Competition Act (cor-responding to Art. 81 (1) of the ECT). However, the Competition Council found that the positive effects of the agreement on efficiency would exceed its anti-competitive effects. Therefore, the agreement was granted an individual exemption according to Section 8 of the Act (corresponding to Art. 81 (3) of the ECT). The exemption is effective until 1 November 2007.

The second agreement deals with the co-operation between the chain EDC and its members.

The agreement lines out the conditions for using the EDC concept – the rights and obligations of the members. Also this agreement was found to contain provisions in violation of Section 6 of the Act. However, the Competition Council found that the positive effects of the agreement on efficiency would exceed its anti-competitive effects. Therefore, the agreement was granted an individual ex-emption according to Section 8 of the Act. The exemption is effective until 1 November 2007.

The third agreement is a standard agreement to be used between Mægler-partner and the members of the SAFE chain.

The agreement gives Mægler-partner the option to buy out the given member of the SAFE chain in case he plans to sell his business to a competing real estate chain. The member of SAFE is paid for this – optional – obligation. According to Section 9 of the Act and on the basis of the known facts of the case – among other things the limited market power of the SAFE members – the Competition Council found that the agreement would have no appreciable effect on competition and therefore fell outside the scope of the prohibition in Section 6 (1).