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Danish Competition Appeals Tribunal: Coloplast Danmark Has Abused Its Dominant position
The Danish Competition Appeals Tribunal has upheld the January 2025 decision by the Danish Competition Council stating that Coloplast Danmark A/S abused its dominant position on the market for ostomy care products. Coloplast Danmark has sought to exclude competitors at the wholesale level from the task of supplying Coloplast’s ostomy care products to municipalities
Director General of the Danish Competition and Consumer Authority, Jakob Hald, states:
As a result of the Danish Competition Council’s decision – and now also the Danish Competition Appeals Tribunal’s decision – we have managed to stop harmful behavior from Coloplast Danmark. In the long term, there was a risk that municipalities would have to pay significantly higher prices for ostomy care products.
This is a complex case, concerning a very special market of significance for the municipalities. The municipalities are obligated to offer a wide range of ostomy care products to users, and it could become costly if competition among wholesalers were to disappear.
Coloplast Danmark has sought to exclude competitors at the wholesale level from the task of supplying Coloplast’s ostomy care products to municipalities. The Danish Competition Appeals Tribunal has upheld the decision by the Danish Competition Council stating that Coloplast Danmark abused its dominant position.
The market for ostomy care products is very distinct. In hospitals, patients become accustomed to a specific ostomy care product. After being discharged, they typically continue using the same product. Municipalities are then required to offer all the products that patients may need, and wholesalers must therefore be able to supply a broad range of products, including those from Coloplast.
The case before the Danish Competition Appeals Tribunal has mainly concerned three issues: Whether the Competition Council has correctly defined the relevant markets. Whether Coloplast Denmark held a dominant position in the relevant market. And, if so, whether Coloplast Denmark has abused this position through a "margin squeeze."
The Danish Competition Appeals Tribunal concludes, among other things, that the relevant upstream market is correctly defined as a brand-specific upstream market for the sale of Coloplast ostomy care products to wholesalers. The Danish Competition Appeals Tribunal also concludes that Coloplast Danmark has held a dominant position in this market, and that Coloplast Danmark has abused this position in the form of a "margin squeeze."
Background:
In 2019, Coloplast entered the wholesale market by forming a consortium with the company Abena. Coloplast Danmark subsequently sold its products to municipalities through this consortium. The price municipalities paid to Coloplast Danmark was significantly lower than the price Coloplast Danmark charged the consortium’s competitors between 2020 and 2022. As a result, it put the competitors at a disadvantage, as they were dependent on access to Coloplast’s products. In practice it was impossible to win the municipal contracts without being able to offer Coloplast products.
With the Competition Appeals Tribunal’s upholding, the Competition Council’s decision from January 2025 to Coloplast Danmark remains in force. As part of its decision, the Danish Competition Council has ordered Coloplast to refrain from engaging in margin squeeze in connection with the sale of ostomy care products to wholesalers and the sale of ostomy care products and related services to municipalities in Denmark.
The Danish Competition and Consumer Authority will continue the case with a view to imposing fines.
For further information
Contact the Head of Communications at the Danish Competition and Consumer Authority, Hanne Arentoft, at the phone number +45 41 71 50 98.
Municipal Procurement of Ostomy Care Products
Patients with ostomies are introduced to their first ostomy care products in hospitals. For medical reasons, a single product from a specific manufacturer is typically considered optimal for the patient, taking into account factors such as body profile, skin condition, and activity level.
After being discharged, the vast majority of patients continue using the product they were introduced to in the hospital. At this stage, municipalities are responsible for procuring their ostomy care products.
Municipalities procure ostomy care products through public tenders or price inquiries, where they request a broad portfolio of products from different manufacturers along with various services, such as counseling and home visits.
It is absolutely necessary for wholesalers to stock Coloplast’s ostomy care products if they wish to compete for municipal supply contracts. This is partly because Coloplast’s ostomy care products account for more than half of the products used by patients in Denmark.
Wholesalers can either purchase Coloplast’s products directly from Coloplast or parallel import them from other EU countries. However, not all products are available for parallel import.
The Competition Act’s Prohibition on Abuse of Dominance
A company is allowed to hold a dominant position in the market and to compete aggressively with its rivals.
The prohibition on abuse of a dominant position is violated when a company holds a dominant market position and exploits that position in a way that harms competition.
A dominant company has a special obligation not to undermine effective competition.
Abusive conduct typically involves a dominant company seeking to:
- Harm competitors or exclude them from the market, for example, by offering particularly large discounts to competitors' customers (“exclusionary” or “foreclosure” abuse).
- Exploit its lack of competition by charging unfairly high prices to the detriment of consumers (“exploitative abuse”).
The Danish Competition Council may order companies to cease unlawful conduct. In urgent cases where there is a risk of serious harm to competition, the Council may impose interim measures.
Companies may also offer binding commitments to address the concerns raised by the Competition Council regarding their conduct as a dominant company.