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Illegal ethical rules in Danish Funeral Directors’ Trade Association

22. december 2010

On December 22nd the Danish Competition Council adopted a decision finding that the Danish Funeral Directors’ Trade Association has violated the Danish Competition Act. The Danish Funeral Directors’ Trade Association has entered into an illegal agreement with its members by adopting three provisions in the association’s ethical rules restricting the members’ use of certain marketing methods in the marketing of their shops and by making general announcements to the members on the basis of these provisions.

The restriction of the members’ marketing consisted in the following:

  • a provision stating that radio and TV may only be used in the context of the association, either at the national level or through the local branches;
  • a provision requesting members not to use prices in their advertising as according to the association this can have a misleading effect; and
  • a provision stating that it is not permitted to advertise with services free of charge.

The case was initiated in March 2010 when the Danish Competition Authority carried out a dawn raid at the Danish Funeral Directors’ Trade Association.

On the basis of the material collected at the dawn raid and publicly available information, the Competition Council ruled that the provisions in the Danish Funeral Directors’ Trade Association’s ethical rules were illegal according to section 6 in the Danish Competition Act. The infringement consists of three parts.

Firstly, the Danish Competition Council ruled that the provision stating that Radio and TV may only be used in the context of the association, either at the national level or through the local branches, has restriction of the competition between the members of the association as its object and consequence.

Secondly, the Danish Competition Council ruled that the provision requesting members not to use prices in their advertising has restriction of the competition between the members of the association as its object and consequence.

Thirdly, the Danish Competition Council ruled that the provision stating that it is not permitted to advertise with services free of charge has restriction of the competition between the members of the association as its object.

The relevant market is defined as the Danish market for funeral services. The members of the association have a collective market share of 55-60 percent in Denmark. The Competition Council found that the competition restriction was appreciable.

Since the three restrictions constitute hard-core restrictions of competition they all fall outside the scope of any block exemption. The Danish Competition Council also found that the conditions for an exemption according to section 8 in the Danish Competition Act were not fulfilled.

The Danish Competition Council has judged the Danish Funeral Directors’ Trade Association’s anticompetitive behavior up until December 22nd 2010. The association has to revoke the three provisions, abstain from making announcements to the members about the three marketing methods being in conflict with the ethical rules and inform the members about the decision within 4 weeks from the Danish Competition Council’s decision.