Judgment delivered on 27 November 2019
The Danish Competition Council
Eurostar Danmark A/S
Consortium agreement concluded between competing companies to bid in a procurement procedure in contravention of the prohibition of anti-competitive agreements
In 2014, two of the largest Danish road-marking contractors concluded a consortium agreement to bid for a contract from the Danish Road Directorate for road marking projects in three of the Directorate’s five districts. The consortium was awarded the contract as the bidder with the lowest overall price for all three districts.
The Supreme Court was called on to review the Competition Appeals Tribunal’s decision that the companies by concluding the consortium agreement had acted in breach of the prohibition of anti-competitive agreements.
The Supreme Court agreed with the Tribunal’s decision that the two companies should be regarded as competitors in the context of the procurement procedure. The Supreme Court gave importance to the fact that the procedure was directed at all undertakings within this field that were able to participate in the competition and bid for one, two or three districts to ensure that the Directorate would achieve the lowest possible overall price. In the Supreme Court’s opinion, no evidence had been produced to substantiate that the Directorate in view of the special discount structure of the procurement procedure was inviting bids for the whole contract only. Also, the other bidders only bid for one or two districts.
The Supreme Court also held that the consortium agreement according to its terms in fact only covered the provision of the companies’ individual services through a joint bid and joint pricing based on a prior division made between them of the three districts concerned. In this way, the companies eliminated competition between them. No information on the road marking market had been produced to the Court to justify that the consortium agreement, regardless of the joint pricing and division of the districts, had not been concluded with the object of restricting competition.
Against this background, the Supreme Court – as the Competition Appeals Tribunal – was satisfied that the consortium agreement should be regarded as having been concluded with a view to restricting competition, as the agreement by its nature in the relevant market context, from an objective point of view, carried such potential for anti-competitive effects that it was not sufficient to prove the actual existence of such effects.
The consortium agreement was, thus, covered by the prohibition of anti-competitive agreements, and the companies were not found to have proven that the conditions for being granted an exemption were satisfied.
The claim against the Danish Competition Council was, thus, dismissed.
The Danish Maritime and Commercial Court had reached a different conclusion.