News

Competition and Consumer Authority acted correctly in merger case

The Competition Appeals Tribunal has ruled that the Competition and Consumer Authority acted correctly in connection with the notification of the merger between Dansk Supermarked A/S and Wupti.com A/S in the summer of 2015.

Deputy Director of the Competition and Consumer Authority Bitten Thorsgaard Sørensen says:

"The Competition Appeals Tribunal has upheld that we acted correctly by asking for a full notification of the merger between Dansk Supermarked and Wupti.com. This allowed us to make a decision on the merger on a sufficiently informed basis."

"Comprehensive merger control is essential if we are to make the right decisions. It is crucial to both businesses and consumers. It is therefore important for us that we have access to the information necessary to determine whether or not a merger significantly impedes competition."

The Competition Appeals Tribunal stated the following in its ruling:

"The Competition Appeals Tribunal does not find that there are grounds for setting aside the Competition and Consumer Authority's assessment that the parties' information was not sufficient at the time of notification to establish whether the conditions for simplified notification were fulfilled."

The Competition Appeals Tribunal has ruled in favour of the Danish Competition and Consumer Authority in a case relating to proceedings regarding the merger between Dansk Supermarked A/S and distributor of consumer electronics and appliances Wupti.com A/S.

In July 2015, the Competition and Consumer Authority approved the takeover of Wupti.com by Dansk Supermarked.

Dansk Supermarked originally submitted a draft of a so-called “simplified notification” of the merger to the Competition and Consumer Authority. Simplified notifications are reserved for mergers which may, in advance, be characterised as unproblematic.

Subsequently, the Competition and Consumer Authority decided that the information provided in the draft of the simplified notification was insufficient to establish that this was a merger which could be notified in a simplified manner. The Competition and Consumer Authority therefore asked for a full notification. This is the decision which Dansk Supermarked appealed to the Competition Appeals Tribunal.

A merger will typically affect competition in a market. Effective merger control supports competition, which can result in lower prices, better choice and innovation for the benefit of both consumers and businesses.

Danish merger control

  • Under the Danish Competition Act, a merger which does not significantly impede effective competition should be approved. Conversely, mergers which impede effective competition should be prohibited.
  • Merger control can be very extensive. It should be clear which markets the merger may affect. And how precisely these markets are defined in terms of both products/services and geography. It may be necessary to conduct a market survey, and often major economic analyses of various scenarios have to be carried out.
  • The Competition and Consumer Authority has 25 days to process a merger if it is uncomplicated, and a further 90 days if it is complicated. The deadlines can be extended if, for example, the parties give certain commitments. The clock starts ticking from the moment the parties submit a complete notification.
  • If a merger cannot be immediately approved, it may be approved with certain commitments. A commitment is a proposal to amend the notified merger which the parties themselves draw up and undertake to fulfil. For example, they may commit to divesting a business area in connection with the merger.
  • The merging parties are obliged to wait to complete the merger until it has been approved. Non-compliance with rules can be punished with a fine.

Notification of mergers

• A merger must be notified in a simplified or regular manner.

• Whether a simplified or full notification should be submitted depends, among other things, on the companies’ market share.

• Even if a merger apparently falls within the simplified notification categories, there may be circumstances pertaining to the merger which mean that it may, however, not be appropriate for simplified notification and should therefore be notified in a regular manner.

• The fee for simplified notification is DKK 50,000, while the fee for regular notification comprises 0.015 percent of the participating companies' total annual turnover in Denmark, though no more than DKK 1.5 million.