Commitment decision on the use of a minimum hourly fee

The Danish Competition Council (“DCC”) has on the 26 august 2020 accepted to make the commitments offered by Hilfr binding. The commitment decision has been, prior to the DCC’s decision, submitted for consultation before the European Commission.

Hilfr is an intermediary digital platform that matches providers of regular cleaning services with buyers of this service. There are two types of providers on Hilfr’s platform. One type is called a “Freelancehilfr” and the other type is called a ”Superhilfr”. The latter is covered by a collective agreement with the labour union “3F”.

On the digital platform, a minimum hourly fee was fixed regarding the services of the two types of providers of cleaning services. The minimum hourly fee for the Freelancehilfrs has been advertised directly on Hilfrs platform. As for the Superhilfrs, the minimum hourly fee is stated in the collective agreement with 3F. Furthermore, Hilfr has set up a technical restriction, which limits the two types of providers to set lower fees than the minimum set fees.

It is the DCCA’s assessment that both Hilfr and Freelancehilfrs/Superhilfrs are undertakings, and that Freelancehilfrs/Superhilfrs, most likely, are not employees of Hilfr from a competition law point of view. Just like it is the DCCA’s assessment that Freelancehilfrs/Superhilfrs cannot be characterized as subcontractors or agents to Hilfr. This is primarily because Hilfr does not carry the financial risk for the Freelancehilfrs/Superhilfrs work.

Furthermore, it is the DCCA’s assessment that the minimum hourly fee may create a “price floor”, which may limit the competition between the Freelancehilfrs. It has been assessed, that Hilfr and the Freelancehilfrs have entered into a concerted practice for the sale of the Freelancehilfr’s services on the platform.

The DCCA has chosen to delimit the proceedings to a single party: the digital platform Hilfr. This is due to the fact, that Hilfr initiated the concerted practice by implementing the minimum hourly fee on the platform and implementing a technical limitation on its platform.

However, Hilfr has offered commitments in order to meet the concerns expressed by the DCCA: Hilfr has offered to remove the minimum hourly fee for Freelancehilfrs from the platform. At the same time, Hilfr commits to continue to ensure and support that no terms nor conditions regarding the minimum hourly fee are stated or that they are otherwise used in regards to Freelancehilfrs on the platform or in Hilfr’s communication.

The DCCA finds that the offered commitments will fully meet the concerns of the DCCA. Thus, the Freelancehilfrs will be free to set their own prices.

Furthermore, Hilfr commits to ensure that the Superhilfrs are employees in relation to competition law, which according to Hilfr, had been its intention when entering into a collective agreement with 3F. In this connection, Hilfr will ensure that there is legal subordination between Hilfr and Superhilfrs, and that Hilfr will bear the financial risk for Superhilfr’s cleaning work through the platform.

Accordingly, the DCCA has settled the case by making the commitments binding on the involved parties of the case for an indefinite period of time.