The increasingly strict line taken by competition authorities in Austria, France, Germany and the UK has not compelled the Netherlands Authority for Consumers & Markets (ACM) to change its liberal approach towards vertical restraints pursuant to which vertical issues are assessed on a case-by-case basis, taking account of potential efficiency gains. It is only where the vertical restraint poses a high risk for consumer harm, that the ACM will initiate an investigation. Even though the ACM is unlikely to take swift action against vertical restraints, companies would be wise to keep an eye on the developments regarding this subject. The ACM seems to be under pressure to follow the more strict approach taken by other competition authorities. It intends to publish a policy paper on the subject this spring.
Chris Fonteijn, chairman of the ACM’s board, stated in a recent speech that vertical restraints have historically been a low priority for the ACM and that this has not changed with the growth of e-commerce. In fact, the ACM intends to prioritise those vertical restraints posing a high-risk of harm to consumer, particularly where:
- vertical agreements are used as an instrument to facilitate collusion between producers;
- inter-brand competition is already limited and vertical agreements are used as an effective means to exercise market power.
The competition authorities in the United States and Sweden seem to take a similar lenient attitude towards vertical restraints. The Swedish competition authority recently decided not to take action in a case regarding resale price maintenance because it was unlikely to lead to major consumer harm. Similarly, the emerging economic learning and broader movement toward a consumer welfare-based antitrust regime have led the US Supreme Court to favour a more structural analysis of vertical restraints in which the competitive effects of these agreements are assessed on a case-by-case basis.
This seems to be in contrast with the stricter approach taken by the competition authorities in Austria, France, Germany and the UK. The Austrian competition authority for instance recently imposed a EUR 2.9 million fine for vertical restraints in consumer electronic products, following a survey of online retailers indicating that certain industry players in Austria exercised pressure on local trading partners’ resale prices. The German competition authority has also lashed out at resale price maintenance practices, and in France, the highest court recently upheld a fine of over EUR 40 million that was imposed on 13 companies active in the luxury perfume sector for setting minimum prices. The UK competition authority has stated that anti-competitive conduct in online markets is its top priority. Even the European Commission seems to have vertical restraints on its radar as demonstrated by the dawn raids it carried out in December 2013. These dawn raids were carried out at the premises of a number of companies active in the manufacture, distribution and retail of consumer electronics products and small domestic appliances to investigate possible restrictions on online sales.
Even though the ACM for now does not follow the stricter approach taken by several of its fellow competition authorities, companies would be wise to check whether agreements concluded with their distributors contain any potential anti-competitive clauses. The focus of many EU competition authorities seems to have shifted to vertical restraints.