Higher fines

Since 1 July 2016 the maximum fines that the Netherlands Authority for Consumers and Markets (“ACM”) may impose have been increased (see our earlier blog on this subject). In the case of a cartel that commenced after 1 July 2016 ACM may now impose a maximum fine of the higher of EUR 900,000 (previously EUR 450,000) or 40% of the annual group sales (previously 10%). In the case of a repeated offence that fine may even be doubled. In advance of this development, ACM launched its “Cartels never go unnoticed” campaign, a public campaign aimed at increasing knowledge of cartels and urging people to report suspicions of cartel practices (see our earlier response).

New procedures

It became apparent earlier this year already that ACM was intensifying its cartel investigations. In three cases in the cold-storage sector, for instance, ACM imposed fines totalling almost EUR 12.5 million on four companies. Personal fines were furthermore imposed on five managing directors. The companies were conducting merger negotiations while at the same time allegedly exchanging price information and other sensitive competitive information and making market allocation agreements. It is remarkable that ACM later reduced the fine imposed on one of the companies, which had fully cooperated in its investigation.

ACM (and the German competition authority before it) fined two manufacturers of prefabricated concrete garages for prohibited price-fixing and market allocation agreements. One of those manufacturers had requested leniency. This case is also remarkable because the other manufacturers had filed a complaint against the party that had requested the lenience on the grounds that it had abused its position of power by charging predatory prices. ACM rejected that complaint. ACM furthermore completed a large-scale investigation into the ready-mix concrete sector after the parties in question had undertaken, among other things, to terminate alliances between companies with a market share of 40% or more and to work together only if that was strictly necessary. But this summer did bring good news for bell pepper growers. ACM reduced the fines previously imposed from EUR 14 million to EUR 1.63 million. It did so on the grounds of two judgments (see here and here) in which the court found that ACM should have applied different sales figures in determining the statutory maximum fine.

Judicial scrutiny

These past few months ACM also added several successes to its name. In one case the court again (largely) upheld the fines imposed for alleged conspiracy in forced sales, with one exception. The firms in question have appealed that decision. The court also upheld most of the fines that ACM imposed on the grounds of allocation of regions between laundries. The argument that the laundries formed part of a franchise formula under which the agreements were permitted was rejected. However, a fine previously imposed on the grounds of tendering agreements on a building company and the persons involved was reduced. The reason for this was that the court did not classify the breach by the companies in question as bid rigging, but rather as cover pricing, a less serious offence.

The Trade and Industry Appeals Tribunal (“CBb”) furthermore upheld most of the fines imposed on the flour cartel. A company that had been acquitted by the court for lack of evidence was even found to have been rightly fined by ACM. In the case of another company, however, the seriousness factor was reduced from 2.25 to 1.75. ACM was also successful in the silver-skin onion cartel: the CBb upheld the fines imposed by ACM. That last decision is also relevant because the CBb confirmed in it that an interruption of the prescription period by ACM in relation to one company interrupts the prescription period in relation to all the companies involved.

Pending investigations

ACM’s cartel crackdown is not over yet; several large cartel investigations are still pending. ACM no longer seems to be focusing on classical cartel agreements (such as price-fixing and market allocation agreements), but rather on a wider range of information exchange or a combination of possibly anti‑competitive contacts. ACM will undoubtedly regard the recent judgments as support for its policy.

More information in Dutch only on dawn raids by ACM and the European Commission and on compliance can be found at http://www.invalacm.nl/.