When Partners Become Competitors ' Market Sharing In Storage Management And Barcodes

• Published date: 28 November 2022
• Subject Matter: Corporate/Commercial Law, Corporate and Company Law, Contracts and Commercial Law, Shareholders
• Law Firm: Bird & Bird
• Author: Mr Morten Nissen and Alexander Br'chner

The Danish Competition Council ("DCC") has in a recent decision found that the storage management companies Codeex ApS ("Codeex") and Barcode People ApS ("Barcode People") have infringed the Danish Competition Act by engaging in sharing of markets and customers between them in the market for storage management (i.e. data capture and barcode scanners).

Originally, two shareholders of a jointly owned company, QBS ApS ("QBS"), had agreed on an internal division of customers and sales into their respective "departments" of QBS. The shareholders shared the profits of QBS between them.

As a part of this internal division, the two shareholders had agreed that they would not directly or indirectly carry out work, employ, enter into business relations with or otherwise have business contacts with customers with whom the other shareholder had contact with within the previous three years.

Later the two shareholders each chose to establish new companies (Codeex and Barcode People, respectively), which would be active in the same markets as QBS. Shortly after these companies had been established, QBS went out of business and subsequently bankrupt, and each shareholder continued their respective commercial activities in their newly established, separate companies.

Nonetheless, the partnership contract of QBS, stipulating that the shareholders should not contact "each other's customers" continued to apply to the shareholders after each of them had set up new competing companies. In order to ensure that the agreement remained in force, the parties made a list of which customers belonged to each of the parties.

Later, following the bankruptcy of QBS, the parties entered into a settlement agreement...