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Toyota Denmark - Abuse of dominant position

25. maj 2005

3/1120-0100-1128/LPML/FI The Council meeting 25th May 2005

On 25th May 2005, the Danish Competition Council adopted a decision concluding that Toyota Denmark A/S had abused its dominant position under section 11(1) of the Danish Competition Act and Article 82 of the Treaty, on the market for authorised servicing of Toyota-cars.

Toyota Denmark A/S is the Danish importer of Toyota-cars and spare parts through the Toyota International distribution network. It is also the entity to which the right to authorise Toyota-dealerships and Toyota-repairers has been granted by Toyota International.

Under Commission Regulation 1400/2002 the suppliers can decide on the number of distributors, but they can not quantitatively restrict the number of authorised re-pairers – any repairer who meets the basic quality criteria, has the right to become an authorised repairer under the relevant brand.

The Competition Council concluded, that the behaviour of Toyota Denmark potentially could result in forcing authorised repairers out of the market, in favour of authorised dealers who are also authorised repairers. Thus, the density of the authorised network would be depleted.

The Competition Council concluded that the plaintiff had been subject to unfair trading conditions and market discrimination, in violation of section 11 of the Dan-ish Competition Act, subsection 1, cf. subsection 3, no. 1 and 3. Under the threat of termination/annulment of the authorisation, Toyota Denmark had pressed the plain-tiff to change his marketing policy and use of trademarks without leaving the plain-tiff a fair opportunity to bring the case before a court or an arbitrator. In connection with this the plaintiff had been pressed into paying various amounts of money, which by Toyota Denmark was regarded as compensatory (on the grounds of viola-tion of marketing- and trademark-rights) – but was perceived as fines of a punitive nature, by the plaintiff.

Furthermore, Toyota Denmark has discriminated between authorised repairers, de-pendent on whether or not they where also authorised dealers. Authorised repairers who where not also dealers, were not allowed to lease cars from Toyota Denmarks own leasing company on favourable terms, and the newly adopted regulations on how much/how little the repairers are allowed to signpost their workshops, were only enforced consistently towards workshops not owned by an authorised dealer.

On the basis of these findings, the Competition Council ordered Toyota Denmark to discontinue threatening authorised repairers with termination/annulment of the contracts, when there are no justifiable grounds for such an action, and not to press the authorised repairers in to accepting blame, liability and the payment of com-pensation by the use of such threats. The Competition Council furthermore ordered Toyota Denmark not to give so short deadlines for the acceptance of such demands, that the possibility of referring the dispute to an independent expert or arbitrator is excluded. Finally the Competition Council ordered Toyota Denmark not to discriminate between authorised repairers – regardless of whether or not they are also authorised dealers.