The Danish Competition and Consumer Authority finishes investigation into the roofing felt market
Following the Danish Competition Council’s meeting on 29 April 2020, the Danish Competition and Consumer Authority has elected to close its investigation into the roofing felt market. The decision was made on the basis of the Danish Competition Appeals Tribunal’s decision of 12 September 2018, which overturned the preceding decision by the Competition Council and remitted the case for renewed consideration. With this, the matter has now been closed, no infringement of competition law found.
The "roofing felt case"
The case began in 2014 with the Danish Competition and Consumer Authority's investigation into the TOR instructions and the associated approval scheme, TOR Approved, which was a widespread quality standard within the roofing felt industry. On 31 May 2017, the Competition Council ruled that Nordic Waterproofing A/S, Icopal Danmark ApS and two organisations, Danske Tagpapfabrikanters Brancheforening and Tagpapbranchens Oplysningsråd (“TOR”), had foreclosed competitors by introducing the TOR instructions as a market standard. In consequence, the Council ordered TOR to repeal the TOR instructions and the other parties to cease their TOR activities.
On 12 September 2018, however, the Council’s decision was overturned by the Competition Appeals Tribunal and remitted to the Council for renewed consideration. The Appeals Tribunal underlined in that connection that technical standards do not generally restrict competition - in fact, they will usually have beneficial economic effects. There were not - as noted by the Council - grounds for finding that the primary intent behind the standards and/or TOR Approved was to restrict competition. Therefore, there were not grounds for finding that the TOR instructions and/or TOR Approved in and of itself could be held to be so detrimental to competition as to render unnecessary a more detailed analysis of the legal and economic contexts. On the contrary, the Appeals Tribunal confirmed that the object of the TOR instructions was quality assurance.
The decision by the Appeals Tribunal offers an important contribution - and one of general public importance - to case law, shedding light on what constitutes an “infringement by object” and an “infringement by effect”. It follows from the decision that the limited category of agreements that are restrictive of competition “by object” cannot be broadened without adequately examining the economic and legal contexts of the particular agreement. The same point has been made by the European Court of Justice - most recently in its recent preliminary ruling in the VISA/Mastercard case.
Click here for our article on the Competition Appeals Tribunal’s decision
Click here for our article on the ECJ’s preliminary ruling in the VISA/Mastercard case
The Competition and Consumer Authority’s decision to close the case
The Danish Competition and Consumer Authority has now - more than 18 months later and after 5½ years of investigation - closed the case, no infringements found. After the remission of the case, the Authority performed additional legal analyses and additional market research. The Danish Competition Appeals Tribunal had already anticipated the requirements for a “by effect” analysis, i.e. the restrictive effects (if any) of the TOR instructions, and stated as follows:
"The Competition Appeals Tribunal
[finds] that it has not been sufficiently proved that the primary intent behind the standards and/or TOR Approved was to protect the market from competitors or to reduce the product range, or that the standards were per se suitable for noticeably having (much less have had) such effect.
" [Emphasis added]
The Authority’s subsequent review of evidence and its market research among importers of roofing felt to the Danish market have not caused the Authority to continue the case. The order to repeal the TOR instructions was made in 2017 and there is no practical way to reinstate them - whatever the outcome of the case.
Nordic Waterproofing A/S was represented in the case by Morten Kofmann from Kromann Reumert.
Read the Danish Competition and Consumer Authority's press release