On 31 August 2015, the Netherlands Authority for Consumers and Markets ("ACM") rendered its decision on administrative appeal in the magazine-pack suppliers cartel case. While the ACM upheld its decision sanctioning thirteen companies and several executives (the "Parties") for cartel activities, it reduced the fines imposed on seven companies because the fines were disproportionate.
In its decision of 7 November 2013, the ACM imposed a total fine of EUR 6 million on thirteen magazine-pack suppliers for cartel activities consisting of market allocation and the exchange of commercially sensitive information. Various executives of the companies were held jointly and severally liable for part of the fines imposed on the companies.
Following administrative appeals from the Parties, the ACM acknowledged that the initial fines imposed on seven of the Parties were in breach of the principle of proportionality since they amounted to excessive percentages of their annual turnover. The fining cap in the Dutch Competition Act amounts to 10% of an undertaking's turnover, or an amount of EUR 450,000, if the latter is higher. In this case, the maximum fine of EUR 450,000 imposed on seven of the companies was considerably higher than 10% of their turnovers. Although the ACM considered it was entitled to levy fines exceeding 10% of the companies' turnovers, it nonetheless reduced their respective fines to EUR 250,000 or EUR 125,000.
Interestingly, and despite concerns expressed by the ACM’s Advisory Committee on a lack of legal basis, the ACM confirmed that the executives were jointly and severally liable for part of the fines imposed on the companies. It held that in this particular case, joint and several liability was appropriate, because there were close financial and personal links between the undertakings and their executives. The ACM also considered that joint and several liability would be less stringent on the executives, as separate individual fines would have led to higher aggregate fines imposed on them.
Also contrary to the opinion of the Advisory Committee, the ACM rejected arguments that it should have applied a de minimis exemption that entered into force during the period of the infringement. The ACM considered that the lex mitior principle, which holds that the more lenient law needs to be applied if the laws governing an offence have been amended, did not apply. According to the ACM, the lex mitior principle applies only to amendments in the law concerning the illegal nature of certain acts, which would not be the case here. The ACM also deemed relevant that 90% of the infringement occurred before the new de minimisexemption entered into force in 2011.
The case shows that, in exceptional circumstances, the ACM can depart from its fining guidelines and reduce fines on the basis of the general principle of proportionality.