The Court of Rotterdam, 27 September 2012, LJN BX8528
In 2010, the Dutch Competition Authority (“NMa”) first used its new authority to fine natural persons to whom violations of the Dutch Competition Act by the undertaking concerned can be attributed up to a maximum of EUR 450,000. The NMa imposed these fines for a violation of the conditions it had attached to the takeover of VNU newspapers (“VNU”) by Koninklijke Wegener N.V. (“Wegener”). The conditions attached to the takeover permit were aimed at safeguarding the independence of the newspapers PZC (a subsidiary of Wegener) and BN/De Stem (a former subsidiary of VNU). In this connection, NMa had prohibited Wegener, among other things, from:
- merging the editorial offices of the newspapers;
- coordinating the commercial policy of the newspapers jointly; and
- establishing communities of interests for the Supervisory Board and the boards of the newspapers.
The NMa fined the company (EUR 19,073,000) and five directors and supervisory directors (EUR 350,000 to EUR 150,000) for having violated said conditions in the NMa's opinion.
With regard to the conditions mentioned under 1) and 3) above, the Court agreed with the opinion of the NMa that these had been violated. However, the Court concluded that the ban on the joint coordination of the commercial policy of the two newspapers by Wegener was insufficiently expressed in the terms and conditions of the permit. Legal certainty requires that an obligation to act or omit something is stated sufficiently concretely in the terms and conditions. The terms and conditions of the NMa did not fulfil this requirement and cannot give rise to the establishment of a violation in this respect.
Fines for Directors and Supervisory Directors
On the basis of Section 75a of the Dutch Competition Act, the NMa may impose a fine on a ‘de facto manager’ for violations of competition law committed by an undertaking, which violations may be attributable to a ‘de facto manager’. The concept of ‘de facto manager’ is given substance on the basis of the actual situation within the company, in which the status of the relevant person under the articles of association is of minor significance. This means that not only a director under the articles of association will be covered by this concept. A de facto manager is someone who “while being authorized and reasonably obliged to do so, has failed to take measures for the prevention of an act, and has deliberately accepted the considerable chance that the fineable act would occur”. The concept of “de facto managing” is therefore broader and does not only it is only include the actual supervision of acts that may constitute a violation.
Generally speaking, the Court holds that the role of supervisory director is hardly ever compatible with the concept of de facto manager, because “the options and influence of a supervisory director are usually limited to supervisory tasks”. According to the Court, the NMa can only designate a supervisory director as a de facto manager when he has a special, atypical role within the company. The Court held that the specific powers of approval which the supervisory directors had in order to safeguard the mutual independence of the newspapers – which had been established in the context of the NMa's conditions for approval – were not far-reaching enough to allow the supervisory directors to be regarded as de facto managers. On the basis of the considerations described above, the Court set aside the penalties for the two supervisory directors of Wegener.
However, the formulation of the Court's ruling does not seem to exclude by all means that a supervisory director can be regarded as a de facto manager. After this ruling, it is clear that the very specific powers of approval with regard to the independence of two separate companies in the present case cannot be regarded as powers giving rise to an atypical role. But the question remains whether this would apply to all powers of approval of supervisory directors. It happens regularly that supervisory directors have to approve decisions about cooperation with other companies, or about budgets, including pricing policies. The question is whether a supervisory director, when he approves such decisions, “while being authorized and reasonably obliged to do so, has failed to take measures for the prevention of an act (of violation)” in certain cases.
In addition, if a supervisory director has more powers or has in fact farther-reaching duties than just a supervisory duty, he could have a ‘special, atypical role’, so that the above-mentioned conditions for ‘de facto manager’ are fulfilled. Unfortunately, the Court has not provided any further explanation or examples of special or atypical roles, which gives rise to the relevant question for practice under what circumstances a supervisory director can be regarded as a de facto manager.