New Enforcement Tools for the Danish Competition and Consumer Authority

The new and far-reaching enforcement tools are justified by the Danish government as a catalyst for more robust competition that promotes growth and consumer welfare.

The new enforcement tools are:

In addition, amended principles for the calculation of fines have been introduced. They are not addressed further in this article.

Following the amendments, the DCCA’s powers to scrutinise mergers have been expanded.

Previously, a merger notification requirement in Denmark was solely dependent on the participating undertakings’ individual and combined annual turnover exceeding the turnover thresholds set out in Section 12(1) of the Danish Competition Act.

As a new additional feature, the DCCA may now require a merger to be notified if:

Consequently, the level of possible scrutiny of a merger in Denmark has been significantly lowered.

A decision to require a notification must be made by the DCCA no later than 15 business days after the DCCA has been “made aware” of the merger. The merging parties will need to consider whether the merger risks being subject to a notification requirement. It may be relevant to inform the DCCA of the merger to assure the DCCA that there is no reason to require a notification.

In September 2024, the DCCA published a set of guidelines providing more details on the new call-in option, including examples of scenarios where the call-in option may be used.

The DCCA cannot “call in” a merger later than three months after a merger agreement has been entered into, a takeover bid has been published or a controlling interest has been acquired. However, the DCCA may still require a merger to be notified up to six months after the completion of the merger if the merging parties have kept the merger agreement secret to prevent the DCCA from becoming aware of it, or if the DCCA has requested information from the parties to assess whether the merger should be notified, but where such information has not been submitted.

The pre-implementation prohibition also applies in situations where the DCCA exercises its call-in option, except for scenarios where the merger has already been completed and where the DCCA will instead encourage the parties to pause the implementation during the assessment phase.

Under the conventional enforcement regime, the DCCA may intervene after establishing an infringement of the prohibition against anti-competitive agreements or abuse of a dominant position.

With the new market investigation tool, the DCCA is allowed to investigate structures or conduct in business sectors where there are indications of circumstances clearly weakening effective competition. The establishment of competition law infringements is not a prerequisite for a market investigation.

Based on market investigations, the DCCA may impose behavioural (not structural) orders on undertakings. Alternatively, the DCCA may accept binding commitments – eg:

Since no decision is made as to an infringement of competition law, an undertaking cannot be sanctioned following a market investigation, except if behavioural orders or binding commitments are not complied with.

A market investigation must involve approval from the Danish Competition Council and a public hearing.

The call-in option is expected to be used when there is a real risk that competition will be significantly impeded. Even so, the call-in option is likely to result in increased transaction costs, since merging parties, far more often than under the conventional merger control regime, may need to take into account the risk of notification requirements when planning their transaction procedures.

The new market investigation tool marks a significant shift in the Danish competition law landscape by allowing the DCCA to proactively address market structures or conduct weakening competition without the need to first establish an infringement of competition law. The tool could lead to more effective interventions, but raises significant concerns about its scope and the potential for increased costs and regulatory burdens on undertakings.

While the new enforcement tools are intended to promote a more competitive market environment and protect consumer welfare, the practical implications will depend on how the DCCA exercises its new powers and how undertakings adapt to the increased regulatory scrutiny.