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Competition in the market for collection of household waste in Copenhagen

25. oktober 2006

4/0102-0400-0017/ISA/ULS - The Council Meeting on 25 October 2006

On 25 October 2006 the Danish Competition Council gave a negative clearance under national law to an agreement between the municipalities of Copenhagen and Frederiksberg and the Waste Disposal Company of 1898 (R98). The Council saw no grounds for action under section 6 of the Danish Competition Act which prohibits anti-competitive agreements.

The agreement establishes a framework for the early cancellation of R98’s concession on the collection of household waste from the citizens of the two municipalities. The concession was granted in 1970, i.e. before Denmark joined the Community, for a period of 50 years and, accordingly, was not supposed to expire until 2020. However, with their agreement the parties voluntarily decide to terminate the concession prematurely.

According to the agreement, the two municipalities will use 2007 and 2008 to prepare one of the most comprehensive procurements in the Danish public sector. From 2009, the first parts of R98’s responsibilities will be open to competition, and in 2011 all assignments concerning collection of household waste in the two municipalities will be subject to public procurement.

The termination of the concession will open a hitherto closed market of substantial proportions. There are approximately 600,000 inhabitants in the two municipalities with an annual production of household waste exceeding 300,000 tonnes, equivalent to almost 10 per cent of all household waste generated in Denmark. The Coun-cil found that the agreement does not restrict competition but, contrary, over a five year period the agreement opens a market to potential competitors.

The decision of the parties to terminate the concession comes after sustained efforts to find a practicable solution and after constant pressure from the Danish Competition Authority. The DCA welcomes an amicable solution but would not, ultimately, have refrained from further action to secure compliance with competition law.

The agreement was also examined pursuant to article 81 of the EC Treaty as the Council held that the agreement could have an effect on trade between EU member states. Patterns of trade could be affected since the agreement could lead to an increase in economic activities between members of the Community. The Council concluded that there was no basis to make a further examination of whether the agreement ran contrary to article 81.

For additional information, please contact head of division Niels Rytter (+45 7226 8097) or head of section Ulrik Lindow Sørensen (+45 7226 8160).