• Professional News
  • 02 February 2011

The Danish Competition Appeals Tribunal confirms decision

Nykredit Realkredit A/S cannot increase its contribution rates since, in 2003, Nykredit, in connection with a merger with Totalkredit, accepted such obligation by way of a voluntary commitment.

In 2003, the Danish Competition Council approved a merger between Nykredit and Totalkredit. In that connection, Nykredit made several commitments in order to accommodate the doubts as to competition expressed by the Competition Council in respect of the merger. One of the said commitments was to reduce the administrative contribution in respect of loans to private customers, the so-called contribution rate. 

In the beginning of 2010, Nykredit wished to increase the said contribution rate due to the economic conditions as well as the fact that the costs of granting mortgage loans had increased. The Competition Council assessed that this increase would be contrary to the commitment made in 2003 since the commitment was not limited in time and consequently still applied. 

The Competition Appeals Tribunal has now upheld the decision made by the Competition Council. In that connection, the Appeals Tribunal states that, as a general rule, the commitments made in connection with the approval of a merger are not limited in time unless they are specifically and clearly stated to be limited in time. Against this background, the Competition Appeals Tribunal found that it had not been proved that the term had been agreed to be limited in time, and the Appeals Tribunal also found that, as part of the approval of the merger, Nykredit had accepted that there was no time limit. 

Since the commitment cannot be deemed to have lapsed, the Competition Council had been entitled to order Nykredit not to increase the contribution rate. Notwithstanding the aforesaid, the Competition Council intends to investigate whether Nykredit should still be bound by the commitment. The Danish Competition Act does not provide any basis for the parties of a merger being allowed to change the terms of the approval of a merger. Such duty, however, follows from the general principles of administrative law according to which a case may be reopened at the request of a party if for example material new facts exist.

(Konkurrenceankenævnets kendelse af 3. december 2010: Nykredit Realkredit A/S mod Konkurrencerådet)

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