Enforcement

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?

There is no formal procedure for complaints before the ACM. However, any person may approach the ACM with a complaint or information regarding anticompetitive agreements. This can be done via the ACM’s website. It is also possible to offer information anonymously through a phone call or by becoming a secret informant

The ACM is not obliged to investigate complaints. Whether it will investigate a complaint will depend on whether the complaint meets the criteria for prioritisation as set out by the ACM in its document ‘Prioritisation of enforcement investigations by the Netherlands Authority for Consumers and Market’.

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?

Until recently, the ACM had not taken any enforcement actions against vertical restraints. The ACM has consistently held that the effect on consumer welfare is key in vertical issues. The ACM will prioritise enforcement where a vertical agreement leads to net consumer harm and will only enforce competition law in these cases. Enforcement in the case of vertical restraints is more likely if:

  • multiple undertakings have made similar agreements;
  • the agreement has come into existence under pressure from retailers; and
  • there is reduced competition in the market (eg, few producers, homogenous products, high market shares, limited or no substitutes for the product, high barriers to entry, limited or no possibility for clients to go to another supplier and little innovation).

However, in a statement by the new chairman of the ACM at a meeting of the association of competition lawyers in December 2018, it was announced that the ACM would make vertical restraints an enforcement priority. He also informed those present that the ACM had, earlier in the same week, carried out several dawn raids related to suspected RPM.

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) Mw, agreements infringing article 6(1) Mw are automatically null and void. However, the Dutch Supreme Court has decided (BP v 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)and 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 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 previous 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.

The ACM has not been active in the enforcement of competition law in relation to vertical agreements. It is therefore not possible to identify trends specific to the enforcement of vertical agreements.

Investigative powers of the authority

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

The ACM has the authority to:

  • enter premises;
  • request information;
  • demand access to documents; and
  • copy data.

Such 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. Such associations can only request a declaratory judgment. There is a draft law that aims to allow class actions for damages. The judgment will then be binding on all potential claimants unless they choose to opt out. How long a private enforcement action takes varies greatly depending on the facts of the case.