After a year where a lot has happened within competition law, merger control and foreign direct investments (FDI), we take a look at what has happened and what is coming next. Here is an overview of five topics we expect to be on the agenda in 2025.
1. Merger control - call-in rules
Transactions below the turnover thresholds can be required to be notified by the Danish Competition and Consumer Authority from 1 July 2024 (also called "call-in"). Here, the Danish regulation follows a trend seen in several countries, of which seven other EU countries have introduced similar rules.
The purpose of the rules is, among other things, to prevent large companies from acquiring smaller companies to eliminate future competition ("killer acquisitions"). There have not yet been any cases under the call-in rules in Denmark. The Danish Competition and Consumer Authority expects that one to two transactions are required to be notified under the rules annually.
The European Court of Justice's landmark Illumina/GRAIL judgment in 2024 also meant that only countries with call-in rules can refer cases to the Commission if national turnover thresholds are not exceeded. This may lead to more countries introducing call-in rules.
2. FDI - Foreign Direct Investment
FDI is still a significant area of activity in 2024, especially at the European level. In Spain, the Spanish government blocked the takeover of the Spanish train factory Talgo by a Hungarian partly state-owned consortium. The reason was Spain's strategic interests and national security. Several media outlets cite Hungary's ties to Russia as the reason behind it. The case is the most high-profile since Germany took action in 2022 against the Chinese state-owned company COSCO's investment in a container terminal in Hamburg.
The European Commission has also presented a proposal to revise the FDI screening regulation. Among other things, the proposal includes mandatory national FDI screening. This could lead to FDI regulation in several countries.
3. Contracts: Information exchange in dual distribution
In 2024, the Hugo Boss case came to a final conclusion. The Maritime and Commercial High Court ruled that it was an illegal restriction of competition when Hugo Boss and two retailers exchanged information about prices, discounts and times of sales in Hugo Boss' own stores. In September 2024, Hugo Boss agreed to pay a fine of DKK 12 million.
The case highlights the importance of having the right framework for information exchange in dual distribution and provides an opportunity to review the internal framework for compliance in companies where both retailer and manufacturer sell in competition with each other.
4. Unfair trading practices in food supply
The UTP rules aim to combat unfair trading practices in the trade of agricultural and food products. In November 2024, the Danish Competition and Consumer Authority evaluated the first years of the Danish UTP rules. The agency's monitoring does not show signs of unfair trading practices on a large scale, but some highlight room for improvement.
This includes the requirement that payment for advertising and marketing must be agreed in clear and unambiguous terms. So far, no decisions have been made under the Danish UTP rules. However, there have been decisions in neighbouring countries where it is relevant to look for practical examples of how the rules are applied.
The Swedish Competition Authority has ruled that a grocery chain's unilateral ability to adjust the price of eggs every week was not a violation of the Swedish UTP rules, as the producer was free to choose not to deliver at that price. The Dutch competition authority found that a cheese manufacturer had acted in violation of the Dutch UTP rules. The infringement consisted in the fact that the cheese manufacturer had not agreed in advance on a transparent pricing system with its suppliers.
5. Refusal to supply and prevention of parallel trading
At the end of 2024, the Danish Supreme Court delivered its judgment in the case concerning the German engine manufacturer Deutz's refusal to supply spare parts for DSB's IC3 engines. The High Court had rejected the competition authorities' market definition and referred the case back for reconsideration. The Supreme Court upheld the Maritime and Commercial High Court's judgment in the case and found that there was no basis for setting aside the competition authorities' assessment and that Deutz' behaviour was a refusal to supply in violation of the prohibition against abuse of a dominant market position.
The judgment confirms that a market can be very narrowly defined if components and spare parts can only be purchased from the original manufacturer. This gives the rules on abuse of a dominant market position a broader application and thus more companies will have to comply with these obligations.