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Customer sharing in re redistribution of unadressed mail between Mediecenter Danmark A/S, and each of Mediabroker, Carat, IUM, and OMD

25. maj 2011

On May 25, 2011, the Danish Competition Council (DCC) issued a decision concerning customer sharing agreements.

The case concerns four horizontal and separate, yet parallel, customer sharing agreements between Mediacenter Danmark A/S (MCD) and (1) Mediabroker A/S and GroupM (Mediabroker), (2) Carat Danmark A/S (Carat), (3) Initiative Universal Media A/S and MediaPrint ApS (IUM), and (4) OMD Danmark A/S (OMD) respectively, which were initiated in 2007. Mediabroker, Carat, IUM, and OMD are all media corporations and are all subsidiaries of international companies.

The three customer sharing agreements between MCD and each of Mediabroker, Carat and IUM involves inter alia, conditions setting out (1) a mutual ban on active sales to the parties’ exclusive customers, (2) that MCD may only contact the other undertakings’ customers subject to prior accept from the respective other media corporation, (3) surplus sharing in re conflicted customers (i.e. when a MCD or one of the media corporations obtains an order from the other party’s exclusive customers), and (4) cool off periods; i.e. covenants not to compete on exclusive customers for a duration of 12 months after the expiry of the customer sharing agreement.

The fourth customer sharing agreement between MCD and OMD involves inter alia, conditions setting out (1) a ban on MCD’s active sales to OMD’s exclusive customers, (2) that MCD may only contact OMD’s customers subject to prior accept from the respective other media corporation, and (3) cool off periods; i.e. covenants not to compete on OMD’s customers for a duration of 12 months after the expiry of the customer sharing agreement.

The DCC finds that it is likely that there is a relevant market for redistribution of the distribution of unaddressed mail for the end users. The DCC bases its findings on (1) the fact that the end users demand distribution of unaddressed mail, (2) the fact that the parties as well as the distributors offer the (re-)distribution of unaddressed mail, and (3) the fact that the DCC previously has found that there is a market for distribution of unaddressed mail. When the DCC defined a market for distribution of unaddressed mail it was only the distributors themselves which sold this service to the end users. The DCC finds that there is still a market for distribution of unaddressed mail. However, in this case the DCC leaves open the definition of the relevant market as the DCC finds that the market is not broader than the market for distribution of unaddressed mail for end users.

The DCC concludes that MCD, Mediabroker, Carat, IUM and OMD have engaged in customer sharing agreements which restrict competition by object and thereby infringe section 6 of the Danish Competition Act and TEUF Article 101 (1). The decision also states that the information sharing between MCD and Mediabroker, Carat, IUM, and OMD respectively supports the customer sharing agreements. Moreover, the DCC has found that the conditions for an exemption according to TFEU Article 101(3) and section 8 of the Danish Competition Act are not fulfilled.

The decision is in its entirety is only available in Danish. Please find the decision here.

A more elaborate English description of the case may be found here.