Personal liability for infringements of competition law in Denmark

1. Personal liability for infringements of competition law in Denmark Martin André Dittmer | 31 October 2014

2. The 2013 sanction & enforcement reform – Context • Longstanding efforts to bolster antitrust enforcement – in particular cartel detection. • Fines for executive management and board of directors since parent Act of 1997. • Limited level of fines; usually DKK 25,000 (approx. EUR 3,500). • Leniency program introduced in 2007: • DCCA expected wave of whistleblowers. • Limited effect – not many ‘proper cartels’ detected. • Horizontal price cases mostly trade associations • For exampleDanish Christmas tree cartel.

3. The 2013 sanction & enforcement reform – Context • 2009: Government formed a committee with a mandate to assess if introducing prison sentence would contribute to a stronger enforcement in cartel cases. • March 2012: Committee finalized report recommending • a number of initiatives including prison sentence. • December 2012: Parliament passes amendment Act including prison sentence provision. • March 2013: Provisions on new sanctions including prison sentence in higher fines enter into force.

4. DCCA on marketing campaign following new rules

5. Overview Prison sentence for antitrust infringements – FAQ • What is the sentence? • Up to 1½ years. • Up to 6 years if severely aggravating circumstances. • Who can go to prison? • Act says ”the offender”. • In practice, generally members of executive management/members of board. • Preparatory works: Lower tier management and other employees may also constitute offenders depending on circumstances. • No guidance on when lower tier management/other employees are relevant subject in stead of or in addition to management.

6. Prison sentence for antitrust infringements – FAQ • Which type of infringements? • Imprisonment is reserved for ‘cartel agreements’. • A ‘cartel agreement’ means an agreement, concerted practice or decision between undertakings, operating at the same level of trade, on: • Prices, profits etc. for the sale or resale of goods or services, • Restrictions on production or sales, • Sharing of markets or customers, or • Coordination of bids

7. Prison sentence for antitrust infringements – FAQ • Which type of infringements? • Blurred lines. Many boarder line situations. • For example lawfulness of bidding consortia? • Enforcers do not see any blurred lines: • DCCA executive: ”We’ve had competition law for decades. Everyone knows when something is a cartel.” • Cartel public prosecutor official: ”We intend to test the boundaries of the new legal framework.” • Cartes Bancairesruling hopefully gives some restraint  strict interpretation of ‘by object’. • Mensrea:Intent is requried for prison sentence (gross negligence sufficient for fines) • Still waiting for the first prison case. DCCA says something is in the pipeline.

8. National campaign by competition authority Also new fine guidelines for individuals

9. National campaign by competition authority Leniency • Individuals can apply for leniency. • Whistleblower can avoid fines and imprisonment if first to blow the whistle. • If the individual is not the first to ”blow the whistle” it is possible to get a reduced fine or a reduced sentence. • Lawyers ethics issue for discussion: Should the company’s advisor also be advising the CEO?

10. Thank you

11. Contact information GorrissenFederspiel H.C. Andersens Boulevard 121553 Copenhagen VDenmark T +45 33 41 41 41F +45 33 41 41 33 www.gorrissenfederspiel.com Martin André Dittmer mad@gorrissenfederspiel.comD +45 33 41 41 43 M+45 24 28 68 27