Similar to authorities in other EU member states, the Dutch Competition Authority has, since 2007, had the power to impose fines on executives who have given instructions to violate competition rules or have exercised de facto leadership over a violation of competition rules. Personal fines can reach a maximum of €450,000.
In one of the first cases in which the authority imposed fines on individuals, the Rotterdam District Court has now overturned the authority's decision, holding that supervisory directors cannot be held personally liable for competition law infringements, except in exceptional circumstances.(1)
The case concerned compliance with a merger remedy. Newspaper publisher Wegener acquired another publishing company in 2000. To remedy a strong position resulting from the acquisition on the newspaper market in a local area of the Netherlands, the authority imposed a behavioural remedy on Wegener, requiring it to ensure the mutual independence of two regional newspapers distributed in that area. The remedy also required Wegener to create a supervisory board for each of the two newspapers, in which supervisory directors had to monitor compliance with the remedy to ensure the continued independence of these newspapers. However, in subsequent years the editorial boards of both newspapers started to work together and were ultimately merged into one. The authority imposed fines of approximately €20 million in total on Wegener and three executives. It also imposed fines of €250,000 each on two independent supervisory directors which had been appointed to monitor compliance with the remedy.
The court held that for an individual to be found personally liable, he or she must have held a management position (the court mentioned directors, managers and department heads). Such an individual can be held liable if he or she refrained from taking measures to prevent anti-competitive behaviour from occurring – while having the powers to do so – and in doing so, deliberately risked the occurrence of such behaviour. For personal liability, it is not necessary that the individual was aware of any specific infringing activity for which fines were imposed; it is sufficient that he or she was generally aware that such types of activity were occurring within the company.
The court held that a supervisory director can be held liable only in exceptional circumstances, since his or her powers and influence are generally restricted to supervision of the company. For a supervisory director to be held liable, he or she must have had an atypical role within the company. According to the court, the supervisory directors in this case did not have such an atypical role, despite their having been appointed specifically to monitor compliance with the remedy.
In a comment on the judgment, the authority stated that it agreed with the principle that supervisory directors are not personally liable, save in exceptional circumstances, but that it was of the opinion that such exceptional circumstances were present in this case (implicitly referring to the fact that the directors had been appointed specifically for monitoring the remedy).
Regarding the calculation of the fine for Wegener, the court held that the fining guidelines applied by the authority had resulted in a disproportionate fine in this case. According to the guidelines, fines for infringements of merger remedies are based on a percentage of the company's total group turnover, without reference to any relevant turnover achieved with the products with which the remedy is concerned. The court referred to the fact that the amount of fine that could have been imposed for the most serious type of infringement of competition law – a cartel infringement – would have been much lower than the amount that the authority had imposed because of the relatively modest amount of turnover achieved with the regional newspapers covered by the remedy. The court reduced the fines that had been imposed on Wegener and the executives from approximately €20 million to €2 million. The court also clarified that the authority cannot limit itself to a mechanical application of the fining guidelines, but that it must assess whether the result is reasonable and proportionate.
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(1) Rotterdam District Court, September 27 2012, LJN: BX8528.
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