The Supreme Court judgment
Firstly, the Supreme Court states that the judicial review of the decisions of the competition authorities fully includes the factual basis and the application of the law, whereas the setting aside of determinations that are essentially based on a competition assessment requires a secure basis. It is generally for the party challenging the authorities' assessment to prove that there are deficiencies in the basis for the assessment and that the deficiencies have had an impact on the decision. The Supreme Court specifically states that the definition of the relevant market and the assessment of dominance is determined by a competition assessment. The same seems to be assumed for the assessment of whether the refusal to supply was likely to eliminate effective competition on the market.
Secondly, the Supreme Court states that when defining the relevant market, according to the administrative law principle of investigation and Article 2 of Council Regulation (EC) no. 1/2003 of 16 December 2002, it is for the competition authorities to obtain the information necessary to make these assessments, including ensuring that the information obtained is sufficient to make a decision and that there is such certainty about the reliability of the information that it is tenable to make a decision. The Supreme Court notes that it must be decided on a case-by-case basis what information must be obtained, as this depends, among other things, on the circumstances of the individual case, including the course of the case and the conduct of the parties involved. The Supreme Court specifically agrees that the investigations carried out were sufficient, and that a separate market was therefore rightly defined for unique spare parts for the Deutz engines that could only be obtained through Deutz and Deutz's dealer network.
Thirdly, the Supreme Court finds that the competition authorities had rightly taken into account that Deutz in 2010 initiated a refusal to supply and prevented parallel trade to Fleco in order to prevent Fleco from performing its contract with DSB. The Supreme Court emphasises that a senior employee of Deutz had decided that the "door" was to be closed and that his employees were to try to "push the business over to DMN", and the subsequent course of events, which shows that the decision was implemented consistently and systematically by Deutz, including deletion of spare parts in Deutz' ordering system, continuous monitoring of the effectiveness of the blocking and contact with DMN about the blocking.
Fourthly, the Supreme Court states that the competition authorities had rightly taken into account that Deutz and DMN on 20 July 2010 entered into an agreement that Deutz was to prevent parallel imports and passive sales of spare parts from Deutz' dealer network for use in the renovation and maintenance of the engines in DSB's IC3 trains. This agreement was intended to provide DMN with absolute territorial protection, and the agreement therefore, objectively assessed, by its nature in the given market context contained such a potential for anticompetitive effects that it is not necessary to prove actual adverse effects. The agreement was therefore aimed at restricting competition.
The question was then whether the agreement was covered by the vertical block exemption. On this point, the Commission had made a submission to the Supreme Court pursuant to Article 15 of Regulation 1/2003. The Commission only exercises this right very rarely. It is the first time that this has happened in a Danish case. In the judgment, the Supreme Court finds that the vertical block exemption does not apply for the mere reason that Deutz had a market share of 100% on the relevant market, see Article 3 of the Block Exemption Regulation. The Supreme Court also notes that the agreement - if it had not been excluded from block exemption already under Article 3 of the Block Exemption Regulation – it would be excluded by its nature, notwithstanding that the agreement is not designed to prohibit DMN itself, but other Deutz dealers, from making passive sales to DSB.
Finally, the Supreme Court rejects that errors have been made that can be assumed to have had an impact on the decisions of the competition authorities.
The case was handled on behalf of the competition authorities by Jacob Pinborg and Rachel Scheele, among others.
