Post Danmark abused its dominant position - now the decision is final

Director General of the Competition and Consumer Authority Jakob Hald says:
 

"When, in 2009, the Competition Council ordered Post Danmark to stop giving rebates, which made it difficult for competitors to win customers, it was the right decision. When a company abuses its dominant position, it harms competition and, ultimately, consumers. And that is illegal."

"We chose an effects-based approach in the case, and we will do the same in the future."

"Generally, a company should be reluctant in granting retroactive rebates if it takes a dominant position on the market and if its competitors cannot compete for the entire market."

The case relates to Post Danmark's previous system of retroactive rebates on direct mail. A retroactive rebate means that a customer loses his rebate on all orders if part of the customer’s orders is switched to another supplier.

If a customer switched part of its mailings from Post Danmark to a competitor, the customer would not only lose the rebate granted by Post Danmark for the mailings that were switched. The customer would also lose the rebate on all other mailings still distributed by Post Danmark as an unavoidable trading partner. At the time in question, Post Danmark had a statutory exclusive right to deliver letters weighing up to 50 grams and was the only company that was capable of distributing letters outside Zealand. In practice, this meant that the rebate made it expensive for customers to place parts of their orders with suppliers other than Post Danmark.

In 2009, the Competition Council found that Post Danmark had abused its dominant position on the market for direct mail because the rebate system had a loyalty enhancing and foreclosing effectin the market. In 2010, the Competition Appeals Tribunal upheld the decision of the Competition Council.

Since then, the case has been pending a decision at the Maritime and Commercial Court. As part of the trial, the Court referred three prejudicial questions to the European Court of Justice (ECJ). Among other things, the questions concerned the necessity of applying an "as efficient competitor" test and the necessity of proving that the foreclosure effect is appreciable in order to establish an abuse of a dominant position.

In October 2015, the ECJ ruled in favour of the Competition and Consumer Authority's view that in a case like this, the "as efficient competitor" test was not relevant, and there is no legal requirement to show that the anticompetitive effect was appreciable.