For at least 15 years, the consultancy company Ecit Account A/S has played a central role in establishing and maintaining an illegal cartel among a number of independent Danish discotheques. On January 27, 2025, the Maritime and Commercial Court imposed a civil fine of DKK 20 million on Ecit for this violation of Section 6 of the Competition Act.
The case concerning Ecit Account A/S (hereinafter "Ecit") stems from a larger complex of cases concerning a cartel collaboration between 22 independent discotheques, including Grazy Daizy, Buddy Holly, etc. and their joint purchasing company, NOX Network ApS (hereinafter "NOX"). The purpose of NOX was to secure the discos a number of advantages, including joint purchasing, staff training, courses and other joint initiatives.
When NOX was established, the members entered into a cooperation agreement that set out the terms of membership. The cooperation agreement contained a separate section entitled "Gentleman's Agreement", which prohibited the discos from opening branches in each other's cities or municipalities or within a radius of 20 kilometers of each other. The cooperation agreement also stated that violation of this provision would result in exclusion from NOX.
The case against the discos and NOX was concluded in 2021 by an out-of-court fine issued by the Competition Council. The Competition Council found that the cooperation violated section 6 of the Competition Act as an illegal market sharing agreement and thus a cartel. The discos were fined in the range of DKK 28,000-278,000, based on the gravity of the infringement, duration and the companies' turnover. It should be noted that the fines were relatively low compared to similar competition law infringements. This is because the fines can amount to a maximum of 10 percent of the company's total turnover in the previous financial year. Therefore, the turnover in 2020 - when the discos had to close for most of the year due to covid-19 - was the starting point for the fine level.
Ecit co-responsible as facilitator
In addition to the fines to the discos, the Competition Council found in its decision on October 25, 2023 that Ecit had independently contributed to restricting competition by establishing and maintaining the market sharing agreement between the discos and NOX as a facilitator. The Competition Council therefore brought the case against Ecit before the courts claiming that Ecit should be held liable for a civil fine for the infringement.
In its judgment of 27 January 2025, the Maritime and Commercial High Court found that the market sharing agreement in the agreement basis for NOX had the object of restricting competition and that the agreement and its enforcement constituted a violation of section 6 of the Competition Act. In this connection, the Maritime and Commercial High Court found that Ecit had played a central role in the cartel by having;
- assumed a leading position (chairman of the board) in NOX's board of directors,
- drafted the market sharing agreement and actively enforced its terms against the discos; and
- attended meetings where market sharing was discussed without distancing themselves from the agreement.
The Maritime and Commercial Court fined Ecit millions for facilitating disco cartel
When setting the fine, the Maritime and Commercial High Court has, among other things, taken into account the gravity and duration of the infringement, including that Ecit has intentionally facilitated an obvious and long-term unlawful geographical market sharing over a period of 15 years. In addition, the Ecit Group's worldwide turnover is included in the calculation of the fine. The Maritime and Commercial High Court also states that it cannot be assumed that Ecit has obtained financial gain by facilitating the discotec cartel and that Ecit was not the initiator of the cartel, which the court considers mitigating circumstances.
The case highlights the importance of advisory firms exercising due diligence when working with their clients, regardless of whether the advisory firm is not operating in the market in question. Liability can include both active and passive participation in cartel facilitation. As an advisor, you should therefore pay particular attention to behavior that may violate the rules of the Competition Act and always clearly and unequivocally distance yourself from anti-competitive behavior by your clients.
If you have any questions about the framework for horizontal cooperation or competition law in general, you are always welcome to contact CLEMENS' competition law experts.
