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Dansk Reklame Film (Danish Advertisement Film)

22. juni 2005

Journal nr. 3/1120-0301-0342SEK/VIS/MM The Council meeting 22 June 2005

On 22th June 2005, the Danish Competition Council (DCC)adopted a decision concluding that the commitment made by Dansk Reklame Film (DRF) meets the Competition Council’s concerns regarding DRF’s standard agreements compatibility with ECT Art. 81 and 82 and section 6 and 11 in the Danish Competition Act.

DAF act as an intermediary between cinemas and advertisers/agencies. DAF enter into 1) agreements with advertisers/agencies concerning display of screen advertising in cinemas and 2) agreements with the cinemas on hire of the screen in order to show advertisements. The Advertisers pay DAF for the advertisements, while DAF pay the cinemas for the hire of the screen. In this way DAF procure advertising for display on cinema screens.

In December 2002 the Danish Competition Authority granted an individual exemption to DAF covering its standard agreements. This exemption is valid until 31 of December, 2007. The DCC is therefore limited to the provisions which have been altered compared with the agreement which has been given an individual exemption.

Two of the provisions which have been altered compared with the agreement, which was given an individual exemption are the following:

  • The invoicing system
  • Term of notice has been prolonged

The DCC found that there was a risk that the altered provisions constitutes an infringement of ECT Art 81 and 82 and section 6 and 11 in the Danish Competition Act.

In continuation of this conclusion DAF offered a commitment to an invoicing system which meets the DCC’s concerns.

In the new invoicing system the different cinemas are paid the same price per ticket sold in the three intervals (0-100.000, 101.000-200.000 and 201.000 and above). As a result, the cinemas will only receive a higher payment per ticket for sold tickets above a total annual sale of a 100.000 tickets. According to the previous invoicing system cinemas with a large annual sale of tickets were paid a higher price for all tickets sold. Furthermore, the differentiation between the small and the big cinemas is 26 % compared to 60 % in the invoicing system which was originally represented to the Danish Competition Council.

Further DAF offered a commitment to a term of notice which is covered by the individual exemption which is granted DAF.

The Danish Competition Council found that the offered commitment meets the concerns regarding the agreements compatible with art. 81 and 82 and section 6 and 11 in the Danish Competition Act. The Competition Council therefore made the offered commitment binding according to section 16a in the Danish Competition Act.