Road marking consortium found guilty of infringing the Competition Act

The Court of Appeal of Eastern Denmark (the High Court) found that LKF Vejmarkering and Eurostar Denmark are guilty, in a criminal sense, of infringing the Competition Act in the so-called road marking case. Nevertheless, the High Court decided that the punishment should be waived.

The case pertains to the Danish Road Directorate's procurement of road marking services in 2013 and 2014. For both procurements, LKF Vejmarkering and Eurostar Denmark entered into consortium agreements and submitted joint bids for the tasks. The two undertakings were among the largest contractors in the road marking sector in Denmark.

The High Court described the road marking consortium as a cartel of a grave nature and determined that it involved a punishable offense. The court noted that the defendants were under the mistaken belief that the two consortium agreements did not constitute an infringement of the Competition Act. In this regard, the Court emphasized the legal counseling obtained and the fact that the Maritime and Commercial High Court in 2018 found that there was no infringement of the Competition Act.

The High Court's verdict stated that the nature of the delusion did not negate the conditions for imposing criminal liability. However, the Court found the misunderstanding to be excusable. Given this, along with other circumstances of the case, including a lengthy processing time, the Court ruled that the punishment should be waived.

Case Proceedings

The road marking case has gone through several judicial instances, involving both civil and criminal proceedings.

The civil proceedings concerned the Road Directorate's procurement in 2014, focusing on whether the undertakings had violated the Competition Act. In the civil track, the Supreme Court in November 2019 decided that the consortium between the two undertakings was illegal. Prior to this, the Competition Council in 2015 determined that the consortium infringed the Competition Act. This decision was appealed to the Competition Appeals Tribunal, which in 2016 upheld the Competition Council's decision. The case was then brought before the Maritime and Commercial High Court, which in August 2018 found the consortium to be legal. This verdict was appealed by the Competition and Consumer Authority (the Competition Council) to the Supreme Court, which ruled that the consortium cooperation infringed the Competition Act.

Following the Supreme Court's decision in 2019, which definitively established that the undertakings had infringed the Competition Act, the criminal proceedings commenced at the courts. In the criminal track, the issue was whether a criminal liability could be established against the undertakings and certain members of the management, including whether the undertakings and the members of the management should be criminally sanctioned. The case was expanded to also include the Road Directorate's procurement in 2013.

In the criminal proceedings, which the prosecution led, the Copenhagen City Court in 2022 acquitted the companies and the members of the management. At the same time, the City Court ruled that the consortium agreements were legal in a criminal sense. It is this verdict that the High Court has now overruled.

The case was conducted under the system in place before the Competition Act was amended in 2021. Today, the Competition and Consumer Authority handles cases against undertakings with a possible fine claim, and a case against an undertaking, including the possible imposition of fines, is thus finally decided in civil legal proceedings. Only the question of sanctions against individuals responsible for contributing to an undertaking’s infringement is to be decided criminally, and this criminal prosecution is handled by the National Unit for Special Crime.

For further details

Contact Hanne Arentoft, Head of Communication at the Danish Competition and Consumer Authority, phone 41 71 50 98.