Changes To The Danish Competition Act Submitted For Consultation

• Published date: 12 January 2024
• Subject Matter: orporate/Commercial Law, Antitrust/Competition Law, M&A/Private Equity, Antitrust, EU Competition
• Law Firm: Kromann Reumert
• Author: Mr Jens Munk Plum, Carina Czerwinski Dall and Simon Emborg Kristensen

The Danish Government has presented a draft Bill proposing changes to the Danish Competition Act, which is now out for consultation. If passed, the Bill will have a significant impact on businesses, especially because it includes the possibility of requiring notification of mergers that are not normally subject to a notification requirement. Furthermore, it will allow authorities to investigate - and regulate - markets without concrete suspicion of infringements, and it will increase the levels of fines.

Strengthening of market surveillance and regulation

As announced in its legislative agenda for 2023/2024, the Government has now tabled a Bill proposing changes to the Danish Competition Act. The Bill introduces significant changes aimed at strengthening competition in the Danish markets, which according to the draft have deteriorated over the past 20 years resulting in increased market concentrations and margins. The Bill has now been submitted for consultation and will, if passed, enter into effect on 1 July 2024.

If the Bill is passed without amendments, it will potentially reduce the legal rights of businesses and involve an increase in the general powers of the regulatory authorities. The Bill includes the following proposals:

Merger control below the thresholds

The Bill proposes the introduction of a national "call-in rule", which the Government first gave notice of a couple of years ago. According to the draft Bill, the Danish Competition and Consumer Authority may, under penalty of the law, require notification of a merger - even if it does not meet the applicable thresholds - if the participants have a combined annual revenue in Denmark as low as DKK 50 million. Such requirement may be imposed if the Competition and Consumer Authority cannot exclude a risk that the merger may impede effective competition, in particular by creating or strengthening a dominant position. According to the legislative history behind the Bill, it seems obvious that the Bill targets the so-called "killer acquisitions" in the financial, tech and pharma sectors, but it may include all sectors, for example in case of acquisition of new businesses that sell important inputs or components to other industries. Based on the wording of the draft Bill, the threshold can be met solely by means of the buyer's revenue. It is expected, however, that the call-in option will only be utilised once or twice a year.

The draft Bill does not contain an absolute deadline for the Competition...