Competition Law and Sector Inquiries by Danish Competition Authorities

1. Introduction

Sector inquiries are an important competition-policy and market-investigation mechanism in Denmark. They allow the Danish competition authorities to examine an entire sector, rather than limiting an investigation to a particular undertaking or suspected infringement.

The principal authority is the Danish Competition and Consumer Authority (Konkurrence- og Forbrugerstyrelsen — KFST), operating together with the Danish Competition Council (Konkurrencerådet). The authority conducts market analyses, investigates possible infringements, reviews mergers and, under the newer Danish framework, can conduct a formal market investigation (markedsefterforskning) where competitive conditions appear to be substantially weakened.

A particularly important development is that Denmark introduced the formal market-investigation instrument into the Competition Act with effect from 1 July 2024. It can potentially address conduct or market structures that weaken effective competition even where the conduct does not itself constitute a traditional infringement of the competition rules.

2. Meaning of a Sector Inquiry

A sector inquiry is a systematic investigation of competitive conditions within a particular industry or market.

It may examine:

• market concentration;
• barriers to entry;
• switching costs;
• customer mobility;
• pricing practices;
• margins and profitability;
• access to infrastructure;
• vertical relationships;
• regulatory barriers;
• information asymmetries;
• network effects;
• market power;
• technological advantages;
• supply-chain relationships;
• discriminatory or exclusionary practices; and
• possible coordination between competitors.

The objective is broader than simply establishing whether one company violated competition law.

The inquiry may instead ask:

Why is competition not functioning effectively in this sector, and what regulatory or competition-law response could improve competitive conditions?

3. Legal Framework in Denmark

The Danish Competition Act provides the institutional basis for competition enforcement and market analysis.

A significant recent provision is Section 15 f, concerning formal market investigations.

Under the mechanism, the KFST may, with approval from the Competition Council, investigate conduct or structures where there are indications that effective competition is weakened.

The process can involve:

1. preliminary market analysis;
2. identification of possible competitive problems;
3. preparation of a proposal to commence a market investigation;
4. public consultation;
5. approval by the Competition Council;
6. information gathering;
7. quantitative and qualitative economic analysis;
8. consultation with market participants;
9. assessment of competitive harm;
10. assessment of possible remedies;
11. proposed behavioural commitments or orders;
12. further consultation; and
13. final decision.

The ordinary statutory period for completing a formal market investigation is two years, subject to a possible extension in special circumstances.

4. Difference Between a Traditional Competition Investigation and a Sector Inquiry

A formal Danish market investigation can lead to a behavioural order or make commitments binding. It cannot result in a structural divestiture order under the market-investigation mechanism.

5. Information-Gathering Powers

Sector investigations depend heavily on economic and commercial information.

The KFST can obtain information necessary for the investigation, including through statutory information-gathering powers. The authority can analyse:

• prices;
• costs;
• margins;
• contracts;
• market shares;
• customer data;
• business strategies;
• switching behaviour;
• distribution arrangements;
• internal documents; and
• other commercially relevant information.

The authority also uses consultations with businesses, consumers and other stakeholders.

This is particularly important where competition problems cannot be understood merely by examining contracts or individual communications.

6. The New Danish Market-Investigation Instrument

The 2024 reform is particularly significant.

The Danish framework allows the authorities to intervene where:

1. effective competition is clearly weakened;
2. the weakening has caused, or is likely to cause, significant harmful effects;
3. the proposed intervention can remedy the competition problem; and
4. the intervention is reasonable, necessary and proportionate.

The authority can therefore reach situations falling outside the conventional infringement model.

This makes the Danish mechanism conceptually comparable to a market-wide competition remedy mechanism, rather than simply an investigation into an Article 101 or Article 102 infringement.

7. Case Law and Major Danish Sector-Inquiry Examples

Because formal Danish market investigations are a relatively new statutory mechanism, the best authorities include both sector studies/market analyses and individual competition cases illustrating the problems that sector inquiries are designed to detect.

Case 1 — Danish Private Non-Life Insurance Market Investigation, 2025

Konkurrencerådet — Skadesforsikringer til private

This is the most important example of the new Danish market-investigation mechanism.

In April 2025, the Competition Council analysed competition in private non-life insurance. It identified several indicators suggesting that competition could be strengthened.

The analysis focused particularly on:

• market concentration;
• insurance premiums;
• profitability;
• price adjustments;
• customer behaviour; and
• annual indexation of insurance premiums.

The authority stated that the five largest insurance companies accounted for approximately 80% of total turnover in the market.

On 25 June 2025, the Competition Council approved the first formal market investigation under the new mechanism. The investigation concerns premium-setting and other policy conditions, particularly indexation of premiums.

Legal significance

This example demonstrates that:

A market investigation can proceed even when the authority is not simply prosecuting a conventional cartel or abuse-of-dominance infringement.

It represents the transition from traditional infringement-based enforcement toward market-wide corrective competition policy.

8. Case 2 — Petrol and Autodiesel Retail Market, 2025

KFST — Svækket konkurrence indenfor detailsalg af benzin og autodiesel

The Danish authority conducted extensive analysis of competition in the retail petrol and autodiesel sector.

The September 2025 analysis identified signs of weakened competition, including:

• broadly similar prices across filling stations;
• simultaneous price changes;
• reduced price transparency; and
• increased consumer costs.

The authority considered these developments relevant to the competitive functioning of the market.

Legal significance

The case illustrates how a sector inquiry can detect market-wide patterns before deciding whether they justify individual enforcement action.

It also demonstrates the importance of economic evidence such as:

• price parallelism;
• timing of price movements;
• geographical comparison; and
• price-transparency analysis.

A sector study does not itself establish that parallel prices constitute a cartel. Additional evidence is required to establish unlawful coordination.

9. Case 3 — Danish Retail Food Value Chain Investigation, 2025

KFST — Food Value Chain

In December 2025, the KFST announced an investigation into competition throughout different levels of the Danish food value chain.

The investigation examines:

• competition between different stages of the supply chain;
• regulation;
• structural barriers;
• cost transmission;
• price transmission;
• margins;
• profitability; and
• whether decreases in production costs are passed through into lower consumer prices.

Legal significance

This is a classic example of a vertical sector inquiry.

Instead of looking only at supermarkets, the authority examines the complete chain:

Producer → processor → wholesaler → distributor → retailer → consumer

This permits competition authorities to determine where competitive bottlenecks arise.

It is particularly relevant to competition-law questions involving:

• buyer power;
• seller power;
• vertical restraints;
• excessive margins;
• discriminatory access;
• supply-chain concentration; and
• pass-through of cost reductions.

10. Case 4 — Danish Retail Banking Market Analysis, 2022

Konkurrencerådet — Competition in the Retail Banking Market

The KFST analysed competition in the Danish retail banking sector and identified several structural features relevant to competitive conditions.

The analysis considered:

• limited customer mobility;
• difficulty comparing banking products;
• economies of scale;
• regulatory barriers;
• information asymmetry;
• market concentration; and
• relationships between banks and related financial services.

One particularly significant finding was that a substantial proportion of customers had not changed their primary bank for many years.

Legal significance

The banking analysis demonstrates the importance of switching costs and customer inertia in sector inquiries.

Even where customers are technically free to switch, competition may remain weak if:

information costs + switching costs + product complexity

make effective switching difficult.

This is especially relevant to modern digital competition law because similar problems arise in:

• digital banking;
• insurance;
• telecommunications;
• cloud services;
• digital platforms; and
• subscription services.

11. Case 5 — Danish Mortgage-Credit Market Analysis, 2017

Konkurrencerådet — Competition in the Mortgage-Credit Market

The Danish Competition Council analysed competition in the Danish mortgage-credit sector and identified a highly concentrated market with significant barriers to entry.

The analysis identified, among other things:

• few market participants;
• significant entry barriers;
• dependence on banks for distribution;
• requirements associated with achieving sufficient lending scale;
• regulatory barriers; and
• limited direct competition among mortgage-credit institutions.

Legal significance

This illustrates the importance of structural barriers to entry in Danish competition analysis.

A market can remain formally open while still being difficult to enter because an entrant needs:

• access to distribution;
• sufficient scale;
• liquidity;
• regulatory approval; and
• access to complementary infrastructure.

The case is therefore useful when analysing essential facilities, vertical integration and foreclosure.

12. Case 6 — Automatic Bill-Payment Services, 2019–2020

Konkurrencerådet — Automatic Payment of Bills

The Competition Council initiated an analysis in November 2019 concerning automatic bill-payment solutions in Denmark. The study examined the prices, characteristics and adoption of different payment solutions.

The inquiry was undertaken in the context of concerns about fees and payment-service markets.

Legal significance

This case demonstrates how a sector inquiry can examine:

• payment infrastructure;
• platform economics;
• pricing;
• consumer adoption;
• network effects; and
• relationships between competing payment solutions.

The methodology is especially relevant to modern competition-law analysis of:

fintech → payment platforms → digital wallets → account-to-account payments → open banking.

13. Case 7 — Market Tipping Analysis, 2025

KFST — Market Tipping

In May 2025, the KFST published an analysis of market tipping.

The authority examined circumstances in which a market may evolve toward a structure dominated by one or a small number of companies. The analysis focused particularly on digital markets, including:

• online marketplaces;
• search engines;
• social media;
• web browsers; and
• operating systems. 

The analysis considered:

• network effects;
• demand-side characteristics;
• feedback loops;
• barriers to attracting users;
• difficulty of developing alternative platforms; and
• the possibility of a market passing a competitive tipping point.

Legal significance

This is highly relevant to contemporary digital competition law.

It shows that sector analysis may identify structural risks before conventional dominance becomes fully established.

The concept can be represented as:

Network effects → user growth → greater attractiveness → more users → stronger network effects → increasing entry barriers → potential market tipping

14. Case 8 — Telecommunications Market Investigations

The Danish authorities have also conducted extensive market analysis in telecommunications.

Recent work concerns strong market-position operators and access conditions, including market testing of commitments offered by telecommunications operators.

The current telecommunications process includes proposed commitments involving operators such as Aura, Bornfiber, EnergiFyn, Fibia and Norlys. The authority is assessing whether those commitments address identified competition concerns.

Legal significance

Telecommunications illustrates the relationship between:

• market definition;
• significant market power;
• network access;
• infrastructure competition;
• wholesale access;
• commitments; and
• market testing.

It is particularly relevant to essential-facility and access-discrimination theories.

15. Relationship with Articles 101 and 102 TFEU

Danish sector inquiries operate alongside EU competition law.

Article 101 TFEU

Sector investigations may uncover evidence suggesting:

• price fixing;
• market sharing;
• output restriction;
• information exchange;
• bid rigging; or
• other forms of coordination.

Article 102 TFEU

They may also reveal possible:

• exclusionary conduct;
• discriminatory access;
• tying;
• refusal to supply;
• margin squeeze;
• excessive pricing; or
• self-preferencing.

But an important distinction must be maintained:

A sector inquiry does not automatically establish an Article 101 or Article 102 infringement.

The inquiry may simply identify market conditions requiring further investigation.

16. Sector Inquiries and Market Definition

Market definition remains an important analytical tool.

The Danish authority may examine:

Product market

For example:

Petrol stations → petrol retail market

or

Private insurance → different categories of non-life insurance

Geographic market

The authority may assess:

• national markets;
• regional markets;
• local markets;
• cross-border competition.

Substitution

Authorities may examine:

• demand-side substitution;
• supply-side substitution;
• switching costs;
• customer preferences;
• technological substitution.

17. Economic Evidence in Sector Inquiries

Danish sector inquiries are heavily dependent upon empirical evidence.

Important indicators include:

Concentration

• HHI;
• CR3;
• CR5;
• market shares.

Pricing

• price dispersion;
• price parallelism;
• price movements;
• margins;
• pass-through.

Customer behaviour

• switching rates;
• churn;
• multi-homing;
• customer retention.

Entry conditions

• capital requirements;
• regulatory requirements;
• network effects;
• access to infrastructure;
• economies of scale.

Profitability

Authorities may compare:

Observed return → expected competitive return → risk-adjusted benchmark

However, high profitability alone does not establish unlawful conduct.

18. Sector Inquiries and Digital Competition

The Danish approach is increasingly relevant to digital markets.

Digital sector inquiries can investigate:

• search engines;
• online marketplaces;
• app stores;
• digital advertising;
• cloud services;
• payment platforms;
• social media;
• operating systems;
• AI ecosystems.

The market-tipping analysis is particularly significant because network effects and user-data advantages can produce self-reinforcing market structures.

Potential concerns include:

Data advantage → better service → more users → more data → stronger service → higher entry barriers

This creates a competition-policy question even before traditional exclusionary conduct is established.

19. Sector Inquiry and Consumer Welfare

Danish sector investigations frequently connect competition conditions with consumer outcomes.

Potential consumer effects include:

• higher prices;
• reduced choice;
• lower quality;
• reduced innovation;
• weaker privacy protection;
• higher switching costs;
• reduced transparency;
• discriminatory treatment.

For example, the insurance investigation focuses on premiums and policy conditions, while the food-value-chain investigation examines how costs and prices move through the supply chain.

20. Remedies

A formal Danish market investigation can produce several outcomes.

A. No intervention

The authority may conclude that the competitive problem is insufficiently established.

B. Behavioural order

The Competition Council can impose a forward-looking behavioural remedy where the statutory conditions are met.

C. Binding commitments

An undertaking may offer commitments, which can subsequently be made binding.

D. Further enforcement

Information discovered through market analysis may lead to a separate investigation into a possible competition-law infringement.

E. Policy or regulatory recommendations

A sector analysis may identify regulatory barriers requiring legislative or governmental consideration.

Importantly, a formal market investigation cannot result in a structural divestiture order under the new mechanism.

21. Procedural Safeguards

Sector investigations must respect procedural fairness.

Important safeguards include:

• public consultation;
• stakeholder participation;
• information requests;
• opportunity to respond;
• consultation on proposed remedies;
• proportionality;
• reasoned decision-making; and
• judicial/administrative review mechanisms where applicable.

The insurance investigation, for example, involved public consultation before the formal investigation was commenced.

22. Importance of Sector Inquiries in Danish Competition Law

The Danish model demonstrates a movement from a purely infringement-centred approach toward a broader market-functioning approach.

The progression can be expressed as:

Market monitoring

↓

Sector analysis

↓

Identification of structural/behavioural problems

↓

Formal market investigation

↓

Economic and legal assessment

↓

Behavioural remedy / binding commitment / closure

This is particularly significant where competition problems are caused by market structure rather than a clearly unlawful agreement or unilateral practice.

23. Key Principles Emerging from the Cases

24. Conclusion

Sector inquiries are becoming an increasingly important component of Danish competition law. Traditional enforcement under Danish and EU competition rules remains central, but Denmark's 2024 introduction of the formal market-investigation mechanism provides an additional tool for dealing with markets where competition may be seriously weakened without necessarily having a conventional Article 101/102 or Danish competition-law infringement.

The principal examples include the private insurance market investigation, petrol retail analysis, food-value-chain investigation, retail banking analysis, mortgage-credit analysis, automatic payment-services study, market-tipping analysis and telecommunications market investigations.

For examination purposes, the central proposition is:

Danish sector inquiries are designed not merely to punish unlawful conduct, but to diagnose how markets function, identify structural and behavioural sources of weakened competition, and—under the post-2024 market-investigation framework—permit proportionate forward-looking intervention where the statutory conditions are satisfied.