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The Danish Competition Appeals Tribunal: Exchange of information on prices, discounts and quantities in relation to future sales between retailers of clothing items was illegal
The Danish Competition Appeals Tribunal has upheld two separate decisions of the Danish Competition Council concerning HUGO BOSS NORDIC ApS (HUGO BOSS) and Axel Kaufmann ApS (Kaufmann) and HUGO BOSS, Ginsborg ApS and Ginsborg Frederiksberg Centret ApS (Ginsborg) respectively. The Danish Competition Appeals Tribunal agreed that the parties’ exchange of information on prices, discounts and quantities in relation to future sales constituted a violation of Section 6 of the Danish Competition Act and TFEU article 101.
In June 2020, the Danish Competition Council decided that the parties’ exchange of information on prices, discounts and quantities in relation to future sales constituted a violation of Section 6 of the Danish Competition Act and TFEU article 101.
HUGO BOSS is an international manufacturer, supplier and retailer of clothing items of the brand Hugo Boss. Kaufmann and Ginsborg are Danish retailers of clothing items from different brands, including the brand Hugo Boss. HUGO BOSS has a vertical relation with Kaufmann and Ginsborg respectively as a supplier as well as a horizontal relation as a competitor.
Often, there are no competitive concerns associated with the exchange of information in a vertical relationship. However, when the manufacturer/supplier is also a retailer of clothing items competing with its downstream customers, exchange of information on prices, discounts and quantities may restrict competition between them at the horizontal level. In these two cases, the exchange of information on prices, discounts and quantities gave HUGO BOSS, Kaufmann and Ginsborg the ability to coordinate their future sales in accordance with the information exchanged which may have led to a more uniform and reduced range of products on sale as well as lower discounts, equal to higher prices for the consumers.
In the Danish Competition Appeals Tribunals decisions, the majority of the Danish Competition Appeals Tribunal states that in a dual distribution set-up, communication of a strategic character can take place between the supplier and a retailer, and this is both natural and necessary to maintain the vertical co-operation. However, this does not change the fact that the exchange of information on the manufacturer’s retail prices, discounts and quantities is horizontal.
Therefore, the Danish Competition Appeals Tribunal decided that HUGO BOSS/Kaufmann and HUGO BOSS/Ginsborg infringed Section 6 of the Danish Competition Act and TFEU article 101. Thus, the decisions of the Danish Competition Appeals Tribunal upholds the decisions of the Danish Competition Council.
The Danish Competition Council decided to report the case to the State Prosecutor for Serious Economic and International Crime for criminal prosecution. This has awaited the decision of the Danish Competition Appeals Tribunal.
For further information please contact Head of Communications, Hanne Arentoft, phone +45 41 71 50 98, e-mail har@kfst.dk.
Please find the Danish Competition Appeals Tribunals decisions in Danish: