31. august 2005
Journal nr. 3/1120-0100-1129/FI/LPML
The Council meeting 31 August 2005
On 31 August 2005 the Danish Competition Council adopted a decision concluding that Skandinavisk Motor Co. (SMC), formerly Pradan Auto Import, had abused its dominant position under section 11 of The Danish Competition Act on the markets for distribution of original Skoda spare parts. The case came about after a complaint from an independent importer of original Skoda spare parts.
The complainant claimed, that Pradan Auto Import operated an illegal discount system, which prevented competing suppliers of original Skoda spare part from selling to the authorised Skoda-repairers.
SMC have previously been the subject of a decision adopted by the Danish Competition Council, concluding that SMC had to cease the operation of such a discount-system. That system concerned original VW-spare parts.
Pradan operated a discount system, where each repairer had to achieve an individual purchase-target every quarter, in order to have three different categories of discounts paid out. The purchase-target was fixed on the basis of the individual repairers purchase in the previous year and Pradans overall aggregated spare part sales. The discount system was fit to secure Pradans dominant market share and keep possible new competitors out of the market. The discount system made it unrealistic for independent spare parts providers to compete with the authorised repairers.
After the merger with Skandinavisk Motor Co. a new discount system has entered in to force, which is used for all of the four brands of cars, that the company deals with (VW, Audi, Skoda og Seat). Skandinavisk Motor Co. has throughout the proceedings of the case disputed that the discount system was illegal. It was therefore of importance to clarify the legal position.
The Danish Competition Counsel decided, that the discount system operated by Pradan Auto Import constituted an abuse of a dominant position under section 11 of The Danish Competition Act, as the purpose of the system was to close the market for the entrance of new competitors.