21. december 2005
Journal nr. 3/1120-0289-0097/SEK/MEM
The Council meeting 21st December 2005
On the 21st of December 2005, the Danish Competition Council (DCC) made the decision that the voluntary association of inns and hotels, Danish Inns & Hotels (Danske Kroer & Hoteller) has in-fringed section 6 of the Danish Competition Act by laying down rules which significantly restrict competition.
The case was initiated June 2005 when the Danish Competition Authority (DCA) received anony-mous information saying that Danish Inns & Hotels fixed collective minimum prices.
The DCA approached Danish Inns & Hotels in order to obtain information. Danish Inns & Hotels responded on the 6th of December 2005 by notifying their rules with the purpose of obtaining a statement of non-intervention in accordance with section 9, alternatively an individual exemption in accordance with section 8 of the Danish Competition Act.
Danish Inns & Hotels is a voluntary association of 89 inns and hotels all over Denmark. It is a sales and marketing association for three co-ordinate product lines: 1) Danish Inn Holiday, 2) City Hotels and 3) Classic Hotels.
The Danish Inns & Hotels handles the members´ sales and marketing functions. These functions are handled through Danish Inns & Hotels´ homepage and through contacts through agents in Denmark and abroad.
The regulations of Danish Inns & hotels contain provisions according to which the members are obliged to follow certain collective minimum prices and are prohibited to advertise prices lower than the fixed collective minimum prices. Furthermore, the regulations contain provisions according to which a member of Danish Inns & Hotels can be excluded from the association if the member does not comply with the fixed collective minimum prices. Danish Inns & Hotels has employed fixed collective minimum prices since 1981.
The members of Danish Inns & Hotels only supply bed-nights in Denmark. Thus, the regulations only affect the Danish market. Consequently, it is the assessment that the rules do not significantly affect the intra-Community trade between EC-member states.
Based partly on the DCA´s competition review from 2003, the relevant market has been defined as the market for bed-nights on 3 and 4 star inns and hotels, 5 star hotels, bed-nights on holiday camps/centres and bed-nights on 4 and 5 star youth hostels in Denmark.
The DCC found that Danish Inns & Hotels´ regulations constitute an infringement of section 6 of the Danish Competition Act according to which horizontal price agreements are prohibited. The DCC found that the Danish Inns & Hotels´ rules have as their object to restrict competition by in-validating/suspending one of the most important competition parameter – price.