News

Right for the Competition and Consumer Authority to determine merger notification procedure

In a decision of 23 January 2020, the Western High Court agreed with the Danish Competition and Consumer Authority that the Authority was right in demanding a full-form notification of the merger between Dansk Supermarked, now Salling Group, and Wupti.com. The requirement for a full-form notification instead of a simplified notification, as initially submitted by the plaintiffs, resulted in a substantial increase in the filing fee.

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By assistant attorney Adrian Kielberg and senior intern Christoffer Mørkebjerg Kirkebække

Background

When Salling Group acquired Wupti.com in 2015, the parties notified the Competition and Consumer Authority of the merger, using the simplified procedure. This procedure may be applied where the merger, based on specific criteria, is expected to be unproblematic. Having considered the notification, the Authority found, however, that the information pro-vided in it was not sufficient to determine the nature of the merger, and that a market analysis was therefore required. A market analysis could not, however, be conducted under the simplified procedure, which only provides for notification of the market. The Competition and Consumer Authority therefore ordered Salling Group to submit a full-form merger notifi-cation, thus increasing the filing fee payable by the parties from DKK 50,000 to DKK 1.45 million.

The merger between Salling Group and Wupti.com was cleared on the basis of the full-form notification report, but Salling Group subsequently complained to the Authority, claiming that a short-form notification under the simplified procedure would have been sufficient. Salling Group argued, in particular, that it had not been necessary to submit a full-form notifi-cation report, since the Authority’s market analysis had been limited in scope and had not given rise to any subsequent competition concerns. 

By decision of 27 April 2016, the Competition Appeals Tribunal upheld the Authority’s finding. Salling Group brought the case before the Court of Aarhus, which also found for the Authority. Salling Group then appealed the decision to the High Court.

High Court judgment

The High Court agreed that there was no basis for setting aside the Competition and Consumer Authority’s finding that further information was needed, and that a market analysis was therefore required. This would not be possible under the simplified procedure. The fact that the market analysis had a limited scope and that the merger did not give rise to any competition concerns did not change this finding. In its reasoning, the High Court noted that, as a general rule, a full-form notification must be submitted in connection with a notifiable transaction, and that the simplified procedure should only be used by way of exception from that general rule. In practice, it allows the Authority a wide margin of discretion when mak-ing this assessment.

The High Court also noted that the level of the filing fee is based on the merging entities’ revenue - not on the amount of work the Competition Authority has to undertake in relation to the notification. Hence, the fact that a full-form notification triggers a higher fee did not change the finding either.

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Jens Munk Plum
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Dir. +45 38 77 44 11
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Sonny Gaarslev
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Dir. +45 38 77 43 62
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Erik Bertelsen
Partner (Aarhus)
Dir. +45 38 77 43 11
Mob. +45 20 19 74 12