The Danish Maritime and Commercial Court has fined Ecit Account A/S (Ecit) DKK 20 million (approximately EUR 2.7 million) for its involvement in an illegal nightclub cartel, thus finding that advisors participating in a cartel can infringe the prohibition on anti-competitive agreements, whether a company is active in the same market as the cartel participants or not.
Ecit, which provides administrative and IT services, played a central role for at least 15 years in formalising and sustaining an illegal agreement on market division among nightclubs in Denmark. The agreements prevented nightclubs from opening branches in each other’s cities or within a specified radius. The court emphasised that it is illegal to participate in forming and maintaining a cartel, even for companies not directly active in the affected market (the market for the provision of nightclub services).
According to the judgment, Ecit held an important position in the nightclubs’ joint purchasing company as Ecit crafted and enforced the market division agreement.
In its judgment, the Maritime and Commercial Court concluded that Ecit infringed Article 6 of the Danish Competition Act (the Danish equivalent to Article 101 TFEU) by assisting in maintaining a cartel among nightclubs in Denmark.
In setting the large fine (by Danish standards), the court took into consideration the severity and duration of the infringement, as well as the global turnover of the Ecit group. As to mitigating factors, the court noted that Ecit did not benefit financially from facilitating the cartel and was not the initiator of the cartel.
Background and competition law assessment
This case is part of a larger investigation into a nightclub cartel that the Danish Competition Council intervened in during 2021. Previously, 22 nightclubs and their joint purchasing company admitted to infringing the Danish Competition Act and were fined for this. The fines imposed on the nightclubs were very low due to low turnover during the COVID pandemic (and under the old fining guidelines).
Following this, in 2023, the Competition Council concluded that Ecit had participated in the market-sharing agreement, leading to the imposition of a fine in court.
This is the first time a civil fine has been imposed by the court for a competition law offence since the Danish Competition Act was amended in the spring of 2021. The ruling therefore serves as a deterring precedent against the facilitation of cartels, signaling that indirect involvement in anti-competitive practices is also subject to scrutiny and potential penalties.
The ruling will hopefully lead to greater awareness of anti-competitive practices when entering into agreements across the business landscape in Denmark.
The decision by the Danish Maritime and Commercial court is available here (in Danish).
https://www.lexology.com/library/detail.aspx?g=73016b37-fd1b-4bea-bcb8-94190f15bac1
