The Netherlands Authority for Consumers and Markets (“ACM”) wasted no time this summer. As expected, it actively and pragmatically enforced the cartel prohibition, for instance by imposing several fines and launching new investigations. As predicted, the administrative courts are still critically assessing ACM’s cartel fines. The civil courts are also getting to grips with the cartel prohibition. The European Commission’s proposal to expand the powers of national competition authorities does not appear to have had any major consequences for ACM as yet.
Active supervision
Shortly before the summer ACM announced that it had accepted the commitments given by ready-mixed concrete producers to change their collaborations. In ACM’s opinion those collaborations presented too great a risk, because the producers controlled more than 40% of the market in the region. ACM feared that the collaborations would restrict competition among the producers and make it easier for them to share sensitive competitive information. That could lead to higher prices, poorer service and less choice for customers.
ACM imposed fines of more than €16 million on a trade association and several affiliated suppliers of batteries for forklift trucks. According to ACM, the companies in question had agreed to use a “lead surcharge” and to share sensitive competitive information via the trade association. Investigations by ACM into other divisions within the trade association showed that information had been exchanged on other subjects as well. Surveys on price developments had been conducted, for instance, but ACM did not establish any offence in that regard.
ACM recently published the results of a market study of online platforms that offer video streaming, such as YouTube, Uitzending Gemist, Dumpert and Netflix. ACM investigated whether certain providers of these services wield market power, which could stand in the way of innovation. As was to be expected, ACM did not find any indications of threats to competition on the online advertising market and the online video market. But ACM did come across unfair general conditions (see our blog on consumer rules).
Together with the European Commission and nine other competition authorities, ACM also published the outcome of an investigation into the effects of commitments made by Booking.com and Expedia to relax the conditions that they apply to their affiliated hotels. These online hotel booking sites had previously committed to allow hotels in future to advertise a lower price on other booking sites (while still being allowed to prohibit hotels from charging lower prices on their own websites). The investigation showed that this led to increased competition and more choices for consumers (see also our blog on e-commerce).
ACM is also investigating a possible cartel in the bunker sector. That investigation does not appear to be related to the extensive investigation of the ports and transport sector (see our earlier blog), but was launched on the basis of information provided by the Public Prosecution Service. It is apparent from a judgment recently handed down by the European Court of Justice that the European Commission may also use evidence obtained by authorities that are not in charge of enforcing competition rules, such as the Public Prosecution Service and the Tax Administration. Forewarned, forearmed!
Critical judges
ACM suffered a loss of face before the Trade and Industry Appeals Tribunal (the “Tribunal”) this summer with regard to the foreclosure auctions: the Tribunal overturned the fines that ACM had imposed on more than 70 real-estate traders. According to ACM the traders took part in a system of cartel agreements that manipulated foreclosure auctions. ACM classified all the auctions jointly as a single continuous infringement. In the Tribunal’s opinion ACM had not proven that all those auctions had the same anti competitive object. There may have been legitimate reasons for working together in most of the auctions. The Tribunal overturned the fines and did not give ACM a second chance to prove its case. Evidence was fundamentally lacking and ACM had not made use of earlier opportunities available to it to provide additional evidence.
ACM will have been more pleased with the judgment recently handed down by the District Court of Rotterdam, which found that ACM had rightly fined several companies that distributed collections of weekly periodicals. The companies had made market-sharing agreements, for instance by agreeing that they would not canvas each other’s customers, and had made agreements regarding each other’s territories. The court largely upheld the challenged decisions, but reduced the fines on the grounds of the long duration of the proceedings.
The Supreme Court has passed an interesting judgment in the dispute between KNMvD, the trade association of veterinary surgeons, and a seller of animal medicines. The dispute concerned an arrangement that made it impossible for the seller to supply medicines. In line with European case law (see our earlier blog on this subject), the Supreme Court ruled that, in principle, an agreement between companies or a decision of a trade association that has the object of restricting competition comes under the cartel prohibition. A separate investigation of its effect on competition is not required in that case. At the beginning of this year (as well as in earlier proceedings) the Tribunal arrived at the same conclusion regarding the fines for price-fixing agreements in tendering procedures in the homecare sector.
The Court of Appeal of Arnhem-Leeuwarden recently also handed down a well-structured judgment in preliminary relief proceedings on the validity of a non-compete clause. The case involved the acquisition of a wholesaler in heating systems whereby a five-year non-compete clause had been agreed on for the benefit of the buyer. The question was whether that agreement was in breach of the cartel prohibition set out in Article 6 of the Mededingingswet (the “Competition Act”) and in Article 101 of the Treaty on the Functioning of the European Union (the “TFEU”). In light of the wholesaler’s market share (12%), the Court of Appeal found that the clause had the object of restricting competition. It also found that, in light of the long period involved, the clause did not constitute an ancillary restriction that is permitted under Article 10 of the Competition Act (see our earlier blog on this subject). The de minimis exemption in Article 7 of the Competition Act also did not apply. For that reason the Court of Appeal considered it plausible that the non-compete clause was null and void under Section 6(2) of the Competition Act.
Proposal to strengthen ACM
The European Commission has proposed new rules to allow the competition authorities of the Member States to enforce the competition rules more efficiently. The cartel authorities should not only act independently and impartially, but should also have sufficient financial resources and staff at their disposal. They should furthermore have all the necessary powers to gather evidence (e.g. by searching mobile phones, laptops and tablets), be able to impose sanctions as a deterrent in the event of violations, and have coordinated leniency schemes in place. The Minister of Economic Affairs has already stated that the proposal will have little impact on ACM’s powers. We will of course continue to monitor all the developments in this field.
Follow Maverick Advocaten on Twitter and LinkedIn.
Detailed information on dawn raids by ACM and the European Commission can be found at www.invalacm.nl.
