Complaints procedure for private parties

Is there a procedure whereby private parties can complain to the authority responsible for antitrust enforcement about alleged unlawful vertical restraints?

Any interested party, whether a consumer or a company, can file a formal complaint with the Authority for Consumers and Markets (ACM) about alleged unlawful vertical restraints. The party has to have a personal and distinct interest in the complaint. Complaints can be made through the ACM’s website or by phone.  

The ACM is not obliged to investigate all complaints. It prioritises cases in accordance with its policy paper: ‘Prioritisation of enforcement investigations by the Netherlands Authority for Consumers and Market’. In line with procedural rules of the Dutch Administrative Act, the ACM is obliged to respond to all formal complaints and motivate when it decides not to investigate them. In practice, complaints are often withdrawn prior to the publication of the ACM of a decision.

Regulatory enforcement

How frequently is antitrust law applied to vertical restraints by the authority responsible for antitrust enforcement? What are the main enforcement priorities regarding vertical restraints?

The Authority for Consumers and Markets (ACM) has not prioritised vertical restraints in recent years, as such restraints can have both positive and negative effects. For years, the ACM has taken the position that, where there is sufficient inter-brand competition, the positive effects generally outweigh the harm caused. It suggested that it would only investigate vertical restraints where there is evidence of significant harm to consumer welfare. This has now changed. Undoubtedly fuelled by developments in markets and e-commerce and a rising trend of more active enforcement by other competition authorities in Europe, the new Chairman of the ACM, Martijn Snoep, has indicated that the ACM shall prioritise vertical restraints. The ACM carried out several dawn raids in respect of alleged resale price maintenance at the end of 2018 and in 2019.

What are the consequences of an infringement of antitrust law for the validity or enforceability of a contract containing prohibited vertical restraints?

According to article 6(2) of the Dutch Competition Act (Mw) agreements infringing article 6(1) Mw are automatically null and void. However, the Dutch Supreme Court decided in BP/Benschop that illegal provisions may be severable from the agreement. The Supreme Court holds that, if severability were not possible, this would lead to a ‘boomerang effect’. The party invoking competition law, would by doing this, lose all their contractual rights. This would have an adverse effect on private enforcement of competition law. For similar reasons, the Dutch Supreme Court decided in Prisma that the automatic conversion (based on article 3:42 of the Dutch Civil Code) of illegal provisions into provisions that do not infringe the competition rules is also contrary to the spirit of article 6(2) Mw and thus not possible. The court did not rule on the admissibility of a conversion clause contained in the cooperation agreement itself.

May the authority responsible for antitrust enforcement directly impose penalties or must it petition another entity? What sanctions and remedies can the authorities impose? What notable sanctions or remedies have been imposed? Can any trends be identified in this regard?

The ACM can impose a fine or a periodic penalty payment (article 56 Mw). The ACM can take such decisions independently and does not have to petition any other entity in doing so. According to article 57(1) Mw, a fine may not exceed €900,000 or 10 per cent of the worldwide turnover of the undertaking. The fine will be based on 10 per cent of the annual turnover concerned. If the infringement continued over several years the basic amount of the fine amount will be multiplied by the number of years, subject to a maximum of four (article 57(2) Mw). Recidivism is an aggravating circumstance. If the same undertaking has been found to infringe a similar rule of competition law in the past five years, the fine may be doubled. The maximum fine may, therefore, amount to 80 per cent of the turnover concerned.

Article 58a Mw provides the possibility to impose a structural remedy through penalty payments (similar to article 7 of Regulation 1/2003). However, this is only possible if there is no other effective alternative to correct the infringement or if a structural remedy is less burdensome for the undertakings concerned.

Although the ACM has now become active in the enforcement of competition law in relation to vertical agreements, it has not imposed any fines in this context yet. Investigations are ongoing.

Investigative powers of the authority

What investigative powers does the authority responsible for antitrust enforcement have when enforcing the prohibition of vertical restraints?

The Authority for Consumers and Markets (ACM) has the authority to enter premises, request information, demand access to documents and copy data.

This authority applies not only to business premises, but also to homes. In the latter case, however, a court order must be obtained in advance. All parties are, in principle, required to cooperate with investigations of the ACM. Enforcing this obligation with respect to foreign companies is in practice complicated.

Private enforcement

To what extent is private enforcement possible? Can non-parties to agreements containing vertical restraints obtain declaratory judgments or injunctions and bring damages claims? Can the parties to agreements themselves bring damages claims? What remedies are available? How long should a company expect a private enforcement action to take?

Private enforcement is possible in the Netherlands. Any party that has suffered damage because of a breach of competition law rules can bring an action for damages before a civil court. Claims vehicles to which claims have been assigned also have standing before Dutch courts. Moreover, it is possible to set up an association to bring claims on behalf of (many) claimants. On 1 January 2020, a new law came into force enabling class actions for damages (Wet afwikkeling massaschade in collectieve actie). The judgment rendered in such cases will be binding on all potential claimants unless they chose to opt out. The length a private enforcement action takes varies greatly depending on the facts of the case.