Abuse of dominant position in a case concerning festival toilet hire

The Danish Competition Council’s decision of 29 April 2020: Godik's exlusivity terms

The case in brief

Godik ApS hires out portable toilets, mobile homes, portable showers, fencing, etc. for festivals and events. In the period 2014-2018, Godik's terms of hire of portable toilets contained exclusivity provisions implying that organisers of events (music festivals, sports events, etc.) hiring portable toilets from Godik took on a three-year obligation to hire toilets from Godik only.

In consideration for that obligation, the event organisers were granted a discount of 15-25% on the toilet hire. However, if the event organisers did venture to hire toilets from a third party, they would be required to return the received discount and, in addition, pay compensation and a penalty to Godik.

The Danish Competition Council's decision

In its decision, the Competition Council first defined the relevant market as the Danish portable toilet hire market. The Council then concluded that Godik's market share of at least 50-60 % gave Godik a dominant position in the market.

In the opinion of the Council, the exclusivity provisions in Godik's terms of hire, making customers commit themselves to hire all or a significant part of their requirements Godik, constituted an abuse of the company's dominant position. The exclusivity provisions were therefore in breach of section 11 of the Danish Competition Act and article 102 of the TFEU on abuse of a dominant position. The Council's decision was in line with its former case law, both in relation to the exclusivity agreements (see also the Teller case from 29 August 2018) and in relation to the return of discounts (see PostNord, 31 May 2017).

The case emphasizes that a dominant undertaking must be particularly cautious and that the use of exclusivity or similar terms requires extraordinary justification because it may be deemed abuse of a dominant position.

Read the Competition Council's decision.