To each his own… or not - Danish Competition Appeals Board Overturns long-running Botex Market Allocation Ruling

The Danish Competition Appeals Board on  appeal ruled that there were insufficient grounds for the Danish Competition and Consumer Authority (“DCCA”) to conclude that the voluntary retail chain Botex had violated competition law by granting its members exclusive marketing areas. 

The Appeals Board disagreed with the Competition Council, which had previously ruled that Botex had violated EU as well as Danish competition law.

Dispute surrounding unlawful geographic market allocation

Botex is a nationwide voluntary retail chain selling home textiles. The dispute concerned whether Botex’s chain agreement and bylaws involved an unlawful geographic market allocation through exclusive marketing areas, violating Article 6 of the Danish Competition Act and Article 101(1)(c) TFEU. The Competition Council had previously decided – in March 2025 – that Botex infringed these rules between 20 May 2009 and 18 August 2021 by assigning members exclusive marketing territories based on postal codes. 

The Competition Council’s Position

The Competition Council viewed the exclusivity arrangement as a horizontal restriction designed to limit competition among Botex members. According to its analysis, the allocation of marketing areas reduced competitive pressure, potentially leading to higher prices, poorer service, and less consumer choice. Consequently, the Competition Council ordered Botex to cease the practice, inform all members of the decision, and provide documentation proving compliance.

Botex’s Arguments

Botex contested the Competition Council’s findings, asserting that the exclusivity rule was not a standalone cartel but rather an integral part of a legitimate joint purchasing arrangement.

The company emphasized that its market share was below the 15% threshold outlined in the EU Horizontal Guidelines, which generally provides a safe harbour for such collaborations. Botex argued that the Competition Council failed to consider the legal and economic context of the agreement and should have applied a two-step analysis, distinguishing between horizontal and vertical aspects of the cooperation.

Appeals Board’s Decision

The Appeals Board sided with Botex, finding that the company operated a genuine joint purchasing scheme rather than a disguised cartel. It criticized the Competition Council for not conducting a full effects-based analysis as required by EU guidelines. As a result, the Board annulled the Council’s decision of March 2025, ordered the refund of the complaint fee to Botex, and declined to award legal costs.

By Object and by effect – the importance of a full analysis 

The decision highlights the importance of an effects-based analysis in competition law because it shows that simply identifying a restrictive clause – such as an exclusivity provision - is not enough to conclude an infringement. Authorities must examine the legal and economic context and assess whether the arrangement actually or likely produces anti-competitive effects.

The Competition Council adopted a formalistic approach, treating the exclusivity provision as a horizontal market-sharing agreement - a category generally considered a “by object” infringement under EU and Danish law. This meant the Competition Council assumed the clause was inherently harmful without analyzing its real-world impact. Its reasoning was that geographic allocation among competitors restricts a key competition parameter - marketing - and therefore should be prohibited outright.

In contrast, the Appeals Board emphasised that Botex’s cooperation was primarily a joint purchasing arrangement, which typically does not have an anti-competitive object. The Board applied the principle from EU Horizontal Guidelines: when a clause is part of a broader legitimate cooperation, its legality depends on context and effects, not just its wording. It criticised the Council for failing to conduct a full analysis of actual and potential effects on both purchasing and selling markets, as required by point 285 of the guidelines. Without this analysis, the Board found insufficient grounds to classify the exclusivity rule as an infringement.

Legal importance

The decision illustrates that competition authorities cannot rely solely on presumptions of harm. Even if a clause appears restrictive, its impact must be assessed in light of the cooperation’s purpose, market shares, and competitive dynamics. An effects-based approach prevents over-enforcement and supports pro-competitive collaborations, ensuring that enforcement decisions promote consumer welfare rather than hinder efficient business practices.

For more information, please contact Morten Nissen, Alexander Brøchner or Pauline Holm Jørgensen. 

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