DANISH COMPETITION AND CONSUMER AUTHORITY 2014

DANISH COMPETITION AND
CONSUMER AUTHORITY 2014
- WORKING FOR WELL-FUNCTIONING MARKETS
MISSION
WORKING FOR
WELL-FUNCTIONING
MARKETS
VISION
GROWTH AND
INCREASED
CONSUMER WELFARE
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Introduction
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Well-functioning markets, growth and
increased consumer welfare
The Danish Competition and Consumer Authority works for well-functioning markets.
Well-functioning markets support growth and increased consumer welfare.
In a well-functioning market, companies compete effectively on factors such as price, quality
and service standards. The companies raise the efficiency of their production, raise quality
standards and develop new and improved products and services. In a well-functioning
market, new companies find it easy to set up in business.
In a well-functioning market, consumers are active and able to act with ease and
confidence. Consumer benefits include market transparency, which makes it easy
for consumers to purchase the goods and services that best meet their needs.
Well-functioning markets support growth and increased consumer welfare. In a market where
consumer welfare is enforced consumers are able to obtain goods and services at a price,
quantity and standard that meet their expectations. Other factors such as the time cost of the
purchase, the level of services and the diversity of goods and services available also influence
consumer welfare. Consumer welfare reflects the perceived standard and utility value of the
goods and services purchased, and the consumer experience of the overall transaction.
In 2013, the Danish Competition and Consumer Authority launched a new strategy
called “clear effect on the markets”, which sets out a well-defined framework and
direction for the Authority’s work in the period up to 2016. The principal focus of the
strategy is to prioritise our efforts and resources according to where we expect to achieve
maximum effect on the markets.
It is my clear conviction that the new strategy will underpin our efforts to achieve more
well-functioning markets in Denmark, for the benefit of companies, consumers and society
as a whole.
Agnete Gersing
Director of The Danish Competition and Consumer Authority
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We are focused on productive interaction with
the world around us
In the Danish Competition and Consumer Authority, we focus on how our interaction with the
outside world generates value for both ourselves and others
We strive to establish and maintain good relationships with key partners within our areas of
focus.
We attach importance to understanding the parties to the cases we examine and to understanding our stakeholders. We also do our utmost to encourage them to understand our position.
In the nature of things, it is not always possible to reach agreement with parties and stakeholders, but we firmly believe that we create the most
value for everyone if we understand each other’s
positions and actions.
WE FIRMLY BELIEVE
THAT WE CREATE THE
MOST VALUE FOR EVERYONE IF WE UNDERSTAND
EACH OTHER’S POSITIONS
AND ACTIONS
We seek out and make use of relevant knowledge possessed by others, and which we stand to
benefit from in our work. This knowledge base is
wide-ranging, covering personal experience, inputs
from partners and experts and major studies and
small-scale surveys.
Finally, we attach importance to involving parties
and stakeholders at an early stage and continuously in our work processes. We do this, for example,
when we advise and inform consumers, companies
and public authorities on topics within our fields of
responsibility. Here, we select topics based on what
our stakeholders seek more information about.
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The Danish Competition and Consumer
Authority in 2014
The Danish Competition and Consumer Authority makes a determined effort to strengthen
competition and enhance consumer welfare. We enforce Danish competition legislation and
consumer protection rules, and we inform and advise companies and consumers.
In 2014, the Danish Competition and Consumer Authority will put extra focus on:
• detecting cartels and other serious of the Danish Competition Act and ensure that those
infringements are penalised. One instrument to that end is our investment in a new IT solution which increases our capacity for finding evidence due to its capacity of processing
large volumes of data. We will be focusing particularly on sectors in which strengthened
competition potentially holds great benefits for society. For example the pharmaceuticals
sector and the construction industry amongst others.
• conducting studies of competitive and consumer conditions in different market sectors.
Our studies typically form the basis for recommendations, the purpose of which is to
promote competition and enhance consumer welfare. In 2014, planned sectoral studies
will cover the retail trade, broadband market, centralised public procurements and direct
debit services.
• heading up the drafting of the first Danish Public Procurement Act. The Authority is chairing and providing secretariat services to the Public Procurement Act Committee. Composed of widely representative members, the Committee will be drafting a bill for the Danish
Public Procurement Act based on the new EU Public Procurement Directive of February
2014. The bill is expected to be introduced in the 2014/2015 Parliamentary Session.
• preparing Denmark’s implementation of a new EU Consumer Rights Directive by summer
2015. The Directive extends the right of complaint, permitting complaints to be filed concerning a wider range of goods and services. At present, consumer complaints are processed in Denmark by the Consumer Complaints Board and 19 state-authorised independent
complaints boards.
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• preventing disputes between business enterprises and consumers from escalating into
formal complaints. In cooperation with relevant organisations, we will be strengthening
information for the retail trade and consumers on instruments such as the Danish Sale
of Goods Act, and will be working strategically to mediate formal complaints at an early
stage.
• strengthening youth consumer protection. Director of the Danish Competition and Consumer Authority Agnete Gersing is chair of the Government’s expert committee on children,
adolescents and marketing. Children and adolescents are major consumers of new technologies, and in the light of this, the committee will be analysing the means and necessity of
strengthening youth consumer protection. The committee will be submitting its concluding report before the summer break.
• advising on competition rules. We are planning a guideon consortia for the purpose of bidding for public procurement contracts. A set of guidelines will cover information exchange
within trade and professional associations.
• strengthening our consumer information service by raising the profile of the public consumer portal, “forbrug.dk”, on diverse social media platforms. Consumer information must
be made available via the channels where consumer issues are raised.
• supporting competition for public-sector contracts and promoting public-private partnerships. The Danish Competition and Consumer Authority provides secretariat services
to the Danish Council for Public-Private Partnerships, which will be focusing on good
procurement practices and PPPs in the social and healthcare sectors.
• evaluating the national storm surge compensation scheme in the wake of the Northern
European storm that affected Denmark in December 2013. The scheme was amended in
2012, and was put to its first test with the December 2013 storm. The insurance companies process individual claims, while Stormrådet, the Danish Storm Council, to which the
Danish Competition and Consumer Authority provides secretariat services, supervises the
scheme and processes complaints against insurers.
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The Danish Competition and Consumer
Authority in 2013
In 2013, we achieved a great many results, all of which have served to achieve more well-functioning markets. The following is a selection of the main results.
We uncover infringements of the competition rules
Infringements of Danish competition law can have major financial consequences for consumers, companies, public authorities and for society as a whole. We are particularly focused on
detecting cartels because they are extremely detrimental to society.
In 2013, the Danish Competition and Consumer Authority carried out inspections in eight
potential cases at a total of 41 addresses.
SEVEN CASES LED TO
FINES IN 2013
Nine companies were fined for obstruction competition in seven cases. Six of these cases were
primarily about binding resale prices, which are
illegal price-fixing agreements between suppliers
and retailers. Unilever and BSH Hvidevarer were
fined DKK 1.5 million each, Miele was fined DKK 1.2
million, and Georg Jensen was fined DKK 1 million. –
In all the cases, companies were fined for restricting
their retailers options to compete on retail prices.
The seventh case was a small-scale cartel in which
the members had coordinated prices.
In 2013, the Danish Competition and Consumer
Authority reported 12 cases to the Danish State Prosecutor for Serious Economic and International Crime (SØIK) for criminal investigation. This was three
cases more than in 2012, and the highest number
on record. In all, SØIK is currently investigating 14
case-complexes reported by the Danish Competition
and Consumer Authority.
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The Danish Competition Act was amended in 2013. The level of fines that may be imposed
was greatly increased, and cartel members now risk custodial sentences. None of the fines in
the cases concluded in 2013 were imposed according to the scale in the amended Act, as the
breaches occurred before the amendment came into force on 1 March 2013.
We are taking action against harmful mergers.
The Danish Competition and Consumer Authority approves major mergers, and informs and
advises companies on the rules. The object is to prevent harmful mergers which distort competition in the markets.
In 2013, we considered and approved 41 merger notifications, three of which required
large-scale investigation. In one case, the merger was approved with the commitment that
entities of the company would be divested immediately upon merger completion.
We underpin competition in publicly-provided services
The Danish Competition and Consumer Authority works to underpin competition in publiclyprovided services through market analysis, guidance notes on legal matters and information.
In 2013, the Danish Competition and Consumer Authority published ten new guidance notes
addressing the legislation on public procurement and public-private collaboration.
Our work on Public Provide Partnerships (PPP) received much attention. In the spring of
2013, the standard model on PPP for refurbishment was publicised, and our study of barriers
to PPP in municipal and regional authorities’ construction projects followed by the end of the
year.
In late 2013, we launched ”Udbud.dk mobil app”, a procurement app for providers. Using
this app, providers can stay up to date on procurement notices from public authorities at any
place and at any time.
The Public Procurement Act Committee, for which the Danish Competition and Consumer
Authority is both chair and secretariat, hosted a conference in November 2013 for a large
circle of practitioners. Participants discussed the challenges posed by current legislation and
offered inputs to the forthcoming Danish Public Procurement Act. Subsequently, we produced
a booklet outlining contributions from the conference.
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As the secretariat for the Council for Public-Private Collaboration, in 2013, the Danish Competition and Consumer Authority published four analyses entitled:
•
•
•
•
Opportunities and potentials to create competition on prison operations.
Competition in municipal sick pay disbursement contracts.
Effects of competition in municipal salary administration
Public procurement functions – effects of upscaling and best practice examples
We provide secretariat services to the Danish Consumer Ombudsman
The Danish Competition and Consumer Agency is the secretariat for the Danish Consumer Ombudsman, who among other duties supervises the Danish Marketing Act, and a number of other
legal instruments for consumer protection.
The Danish Consumer Ombudsman considers complaints concerning misleading and deceptive
marketing, contractual terms, spam, e-commerce
etc., and seeks through negotiation with business
enterprises to achieve results for the benefit of
collective consumer interests.
In 2013, the Danish Consumer Ombudsman received 6,000 complaints.
IN 2013, THE CONSUMER
HOTLINE RECEIVED A
TOTAL OF 33,681
PERSONAL INQUIRIES
We assist consumers
The Danish Competition and Consumer Authority is the secretariat for the national Consumer
Complaints Board, which considers complaints
from consumers in areas where no independent
complaints board exists. The board is impartial and considers complaints concerning goods
and services priced between DKK 800 and DKK
100,000. For textiles and footwear, however, the
threshold is DKK 500.
The Consumer Complaints Board concluded 2,496
cases in 2013.
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A large proportion of complaints lodged with the Consumer Complaints Board are settled
amicably, meaning that the parties reach a compromise. In 2013, compromise was reached
in 1,021 cases, corresponding to 41 per cent of cases. This continues the trend from previous
years.
In 2013, the Danish Competition and Consumer Authority expanded its consumer hotline
services to provide live-chat and an online FAQ knowledge base.
In 2013, the consumer hotline received a total of 33,681 personal inquiries in the form of
19,106 phone calls, 12,875 chat calls and 1,700 FAQ lookups.
On the public consumer portal “forbrug.dk”, consumers can obtain information about their
rights. In 2013, “forbrug.dk” highlighted topics such as switching to a new electric utility, travel cards, loyalty programmes, mobile payments and alternative therapies. The “forbrug.dk”
website is also accessible on tablet and smartphone.
The Danish Competition and Consumer Authority is the secretariat for European Consumer
Centre Denmark, the Danish national centre in a European network of consumer centres.
European Consumer Centre Denmark advises on consumer rights in the EU, Iceland and
Norway and offers useful advice for consumers contemplating purchases in physical and
online shops. Consumers can complain to European Consumer Centre Denmark if they are
dissatisfied with products or services purchased across EU borders.
In 2013, European Consumer Centre Denmark received almost 4,000 complaints and inquiries.
We are ready to assist in flooding compensation claims
The Danish Competition and Consumer Authority is the secretariat for Stormrådet, the Danish Storm Council. The Danish Storm Council determines whether compensation is payable
for damage caused by flooding and storm winds. The Council is also the complaints body and
supervises the insurance companies’ processing of storm surge claims.
In 2013, Denmark was affected by two storms; the December storm in particular caused
widespread damages in the form of both flooded buildings and fallen trees. The many claims
spurred political reassessment of the storm surge compensation scheme implemented as
recently as in 2012. This scheme covers compensation for expenses for rehousing and damage
caused by mildew in the wake of flooding.
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We promote more efficient water utilities
The Danish Competition and Consumer Authority houses Forsyningssekretariatet, the Secretariat for Water Supplies. Denmark’s largest drinking and wastewater utilities are natural
monopolies, and the Secretariat for Water Supplies, determines price caps and efficiency-improvement requirements for the water utilities to ensure that Denmark has access to affordable water.
In 2013, the Secretariat for Water Supplies, issued requirements for 332 drinking and waste
water companies to improve the efficiency of their operations to the tune of DKK 160 million.
We lead the way in strengthened competition and enhanced consumer welfare
In 2013, the Danish Competition and Consumer Authority also published studies of competition and consumer conditions in Denmark. These studies form the basis for a large number of
recommendations, the aim of which is to strengthen
competition and enhance consumer welfare.
CONSUMERS STAND
TO GAIN DKK 319
MILLION A YEAR FROM
THELIBERALISATION OF
THE BOOK MARKET
Examples of studies in 2013:
• Competition in the Danish retail banking market
• Small and medium-sized enterprise participation in public procurement
• Parcel distribution to consumers
• The markets of private chiropractors and physio-
therapists
• Barriers to PPP in municipal and regional public works contracts
• The status of public-sector competition
• Liberalisation of the book market – an evaluation from the consumer perspective
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We perform legislative drafting services
In 2013, the Danish Competition and Consumer Authority drafted the following legal bills:
• the bill for an amendment to the Danish Competition Act concerning the fee for notification of mergers. This amendment requires enterprises to pay a fee for the processing of a
merger notification submitted to the Danish Competition and Consumer Authority.
The new rules came into effect on 1 August 2013.
• the bill for amendments to the Danish Enforcement Act. These amendments include a
reduction in the time limits for complaints against EU procurements. The new rules came
into effect on 1 June 2013.
• the bill for amendments to the Danish Marketing Act. The amendments entail reinforcement of the Danish Consumer Ombudsman’s procedural mandate and enforcement powers
in relation to financial undertakings etc. and
greater youth consumer protection in relations
to marketing of alcohol. The new rules came into
effect on 1 May 2013.
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About the Danish Competition and
Consumer Authority
• The Danish Competition and Consumer Authority enforces the Danish Competition Act
and endorses larger business mergers and instructs companies to revoke agreements that
limit competition.
• The Danish Competition and Consumer Authority is the secretariat for the Danish Consumer Ombudsman, who among other duties, supervises compliance with the Danish
Marketing Act and a number of other legal instruments for consumer protection.
• The Danish Competition and Consumer Authority supervises water and wastewater companies. In this capacity, the Authority sets out annual requirements concerning efficiency
improvements by the individual water utilities.
• The Danish Competition and Consumer Authority considers complaints from private consumers related to goods and services purchased from traders, and gives advice over the
phone and online about common consumer related questions.
• The Danish Competition and Consumer Authority is engaged in producing market analyses
and in advising relevant public authorities through the formulation of guidance notes on
legal and practical matters.
• The Danish Competition and Consumer Authority act as secretariat for the Competition
Council, the Council for Public-Private Cooperation, the Secretariat for Water Supplies,
the Consumer Ombudsman, the Consumer Complaints Board, European Consumer Centre
Denmark, the Danish Storm Council, the Energy Supplies Complaint Board, the Danish
Complaints Board for the Funeral Services Industry and the Danish Complaint Board for
Veterinarians.
• The Danish Competition and Consumer Authority contributes to the development of new
politics and regulation. The Authority analyses the markets based on both competition and
consumer aspects, puts forward recommendations and communicates to consumers and
companies.
• The Danish Competition and Consumer Authority is part of the Danish Ministry of Business
and Growth. We perform legislative drafting services and provide ministerial services. In
a number of domains, the Danish Competition and Consumer Authority is politically independent.
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Danish Competition and
Consumer Authority
employ approximately
275 people
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April 2014
Print run 1000 copies
Print: Rosendahls – Schultz Grafisk A/S
Brochure by The Danish Competitionand Consumer Authority
DANIS H CO M PET IT IO N AND CONSU MER AUTHORITY 2 0 1 4
Konkurrence- og Forbrugerstyrelsen
Carl Jacobsens Vej 35
2500 Valby
Tlf. +45 4171 5000
E-mail: kfst@kfst.dk
www.kfst.dk | www.forbrug.dk