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Decision from the Danish Appeals Tribunal - DBC medier's exclusive contracts

08. maj 2007

On 8 May 2007 the Danish Appeals Tribunal annulled a decision from the Danish Competition Council and remitted the decision to the Council for reconsideration.

The subject matter of the case was DBC medier’s exclusive rights to the distribution of a number of films and computer programmes/games. DBC medier sells books, music, films, computer programmes/games to Danish libraries intended for public lending. According to The Danish Copyright Act films and computer programmes must not be used for public lending without the consent of the copyright possessor. A number of the agreements which DBC medier had entered into with copyright possessors contained a provision giving DBC medier exclusivity to the distribution to Danish libraries of a part of these films and computer programmes.

The case was initiated by a complaint from DBC medier’s competitor, Flex Medie. According to Flex Medie, DBC medier’s exclusive rights constituted an infringement of Section 6 and Section 11 of the Danish Competition Act because the exclusivity prevented Flex Medie from delivering films and computer programmes/games to public libraries.

The Competition Council stated that DBC medier had a dominant position on the Danish market for the distribution of films and computer programmes to public libraries intended for public lending. Concerning the abuse criteria The Competition Council concluded that DBC medier had not infringed Section 11 of the Danish Competition Act or Article 82. The conclusion was based on the assumption that DBC medier only had exclusivity to a minor part of the films and computer programmes which it sells to libraries. In a number of contracts it was the copyright possessors who had wanted exclusive contracts in favour of DBC medier. Furthermore, the competition problems in the market were to some extent due to the purchasing behaviour of the libraries.

The Danish Appeals Tribunal found that it was not important whether competition was restricted by reason of other factors or whether exclusivity was agreed on the request of the copyright possessors. Of importance was whether DBC medier’s use of exclusive contracts formed part of normal competition or whether its use actually impeded competition. Based on the facts in the case the Danish Appeals Tribunal concluded that DBC medier’s behaviour did not form part of normal competition. Furthermore, the Tribunal concluded that the effect of DBC medier’s exclusivity did not have such a “negligible” extent that it did not constitute an abuse. On the basis of these conclusions the Danish Appeals Tribunal remitted the decision to the Council for reconsideration.

Concerning Section 6 of the Danish Competition Act and Article 81, the Competition Council concluded referring to Section 14 that there was no basis for making a further examination of whether DBC medier’s exclusive contracts infringed those provisions. The Danish Appeals Tribunal upheld this on the grounds that according to previous decisions such decisions cannot be appealed.