An extract from The Merger Control Review, 11th Edition
The merger control regimei Merger control thresholds
Article 29 of the DCA provides that a concentration must be notified if:
- the combined turnover of all undertakings concerned exceeds €150 million in the calendar year preceding the concentration; and
- of this turnover, at least two concerned undertakings each achieved at least €30 million in the Netherlands.
Alternative jurisdictional thresholds exist for the following undertakings.Healthcare undertakings
All concentrations involving at least one healthcare undertaking must be notified to the Dutch Healthcare Authority (NZa). For the purpose of the healthcare-specific test carried out by the NZa, a healthcare undertaking is defined as an undertaking employing or contracting more than 50 healthcare providers (persons). The NZa evaluates, inter alia, the accessibility and quality of services and their integration plans. If the NZa advises positively, the transaction must be notified to the ACM if it meets the relevant thresholds.
For the purpose of the control by the ACM, a healthcare undertaking is an undertaking that achieves at least €5.5 million turnover through healthcare services. A concentration between two or more healthcare undertakings must be notified to the ACM if:
- the combined turnover of all undertakings concerned exceeds €55 million in the calendar year preceding the concentration; and
- of this turnover, at least two of the undertakings concerned each achieved at least €10 million in the Netherlands.
For credit and financial institutions within the meaning of the Act on Financial Supervision, Article 31(1) of the DCA states that instead of turnover, income items must be used (analogous to those defined in Article 5(3)(a) of the EUMR).Pension funds
Any type of pension fund will be regarded as an undertaking for competition law purposes. New thresholds have applied since 1 July 2016: concentrations involving pension funds are subject to prior notification if the joint worldwide premiums written by the parties concerned in the preceding calendar year amounted to €500 million and at least two parties achieved €100 million premiums written by Dutch citizens.ii Investigation phasesNotification phase
The Dutch procedure consists of two phases. In Phase I, the ACM will investigate upon notification whether there are reasons to assume that the concentration may impede effective competition in certain markets (notification phase). If there are no such reasons, the ACM will clear the concentration, after which the concentration may be completed. Once the decision on the notification is issued, a filing fee of €17,450 is imposed, regardless of the outcome of the decision.Licence phase
If the ACM has reason to assume that competition may be impeded, it decides that the concentration requires a licence, which will be granted only after a further investigation in Phase II (licence phase).
In contrast with the European procedure, in the Netherlands, Phase II only starts if and when the parties involved request a licence. Such request requires a new notification in which more detailed information is provided to the authority about the parties and the relevant markets. Upon this request, the ACM will conduct an additional investigation and either clear or prohibit the relevant concentration. Before prohibiting a concentration, the authority will provide the parties (and sometimes third parties) with an overview of the relevant competition concerns (points of consideration) and will provide the parties (and sometimes third parties) with the opportunity to give their reactions on these points. Once the decision on the licence request is issued, a filing fee of €34,900 is payable, regardless of the outcome of the decision.
Both the notification for Phase I and the request for a licence must be submitted in Dutch. Annexes, such as letters of intent or share purchase agreements, or annual reports, may be submitted in English.Clearance by the Minister of Economic Affairs
In the Netherlands, if a concentration is prohibited, there is a possibility of requesting the Minister of Economic Affairs to grant a licence for serious reasons of general interest. In 2019, the Minister did so for the first time.iii Duration procedure and waiting period (standstill obligation)
Phase I is a 28-day review period, whereas Phase II has a maximum duration of 13 weeks. However, these periods may be suspended if the ACM asks formal questions requiring additional information on the concentration. Because of this possibility of suspension, the review period can be very lengthy. As an extreme example, the 28-day period (Phase I) was suspended for 261 days in the case of Coöperatie Vlietland/Vlietland Ziekenhuis. There are no requirements for pre-notification.Exemption waiting period
As previously indicated, the concentration may not be completed during the review period. Some exceptions apply, which are similar to those under the EUMR. In the event of a public bid, the prohibition does not apply, provided that the bid is immediately notified to the ACM and the acquirer does not exercise the voting rights attached to the relevant share capital (the latter condition may be waived).
The ACM can also grant an exemption from the standstill obligation if quick clearance by the authority is not possible and suspension of completion of the concentration would seriously jeopardise the concentration. Such exemption can be granted within several working days. Once the exemption is granted, the concentration may be completed before the authority clears it. If the intended concentration does not pose any problems, the ACM may prefer to take a final clearance decision within a couple of days instead of granting an exemption.
In the case of exemptions, the concentration must be unwound if it is subsequently prohibited by the authority.iv Other procedural aspectsThird parties
The notification of a transaction is always published in the Government Gazette. In this communication, third parties are invited to comment on the contemplated concentration. Although third parties are requested to respond within seven days, information provided later may also be used in the procedure. The ACM also actively gathers information by sending out questionnaires or by interviewing third parties. The ACM is aware that competitors may have strategic reasons to be critical of a contemplated concentration, but it attaches more weight to the comments of customers – especially the comments of health insurers in cases concerning healthcare suppliers.
Information received from third parties will generally be communicated to the parties concerned to provide them with the opportunity to respond. Generally, the authority will reveal the third party's identity.Remedies
Under the Dutch merger control rules, parties can propose remedies in both the notification phase and the licence phase. The conditions and type of remedies are, in principle, similar in both instances and are laid down in guidelines. The general preconditions are that the parties to the concentration must take the initiative and the remedies proposed must be suitable and effective for eliminating the relevant competition concerns. The authority generally prefers structural remedies, but behavioural or quasi-structural remedies (not structural but nevertheless on a permanent basis, such as an exclusive licence agreement) are also possible. The authority does not have a specific form, but does require, inter alia:
- the proposal to be in writing;
- a detailed description of the nature and size of the remedy;
- a note on how all indicated competition concerns will be eliminated;
- if applicable, the steps required to divest a part of the undertaking and the timeline for such;
- a non-confidential version of the proposal; and
- a timely filing of the proposal.
Nevertheless, there are some differences between the procedures in the two phases. First, in the notification phase the remedy proposal should be handed in a week before the deadline of the ACM decision, whereas this is three weeks in the licence phase. In addition, whereas a concentration cleared under conditions in the notification phase may not be completed until the remedy is effectuated – effectively creating a 'fix it first' obligation, this limitation does not apply to remedies accepted in the licence phase. In both cases, however, effectuation of the remedies must be within the time frame stipulated in the proposal. If the parties fail to meet this deadline, the concentration will require a licence (remedies in the notification phase) or the concentration will be deemed to have been completed without a licence (remedies in the licence phase). In general, any failure to comply with remedies once the concentration has been completed is punishable by heavy fines.Fines for late notification
As previously indicated, failure to notify a concentration (in a timely manner) will usually lead to a fine upon discovery by the authority. Fines for late notification may run up to 10 per cent of the worldwide turnover in the year preceding the year of the fine, but this ceiling can be doubled in the case of recidivism. On the basis of Articles 2.5 and 2.6 of the 2014 ACM Fining Policy Rule, the ACM sets the fine at €400,000 to €700,000 or 5 per cent of the total Dutch turnover in the preceding financial year for the buyer – whichever is higher. However, the ACM has substantial leeway to increase the resulting amount of the fine if it deems it to be too low. This fine may be doubled in the case of recidivism.v Appeals and judicial reviewMerger control decisions
Each phase ends with a decision, which can be appealed before the District Court of Rotterdam by any party directly affected by the decision, including the parties involved in the concentration, and usually also competitors, customers and possibly suppliers. Further appeal against a judgment of the Rotterdam District Court can be lodged with the CBb.
Third parties directly affected by the decision do not have access to the authority's file, but they can request information from the authority on the basis of the Government Information (Public Access) Act when the merger control procedure has been completed. Information that is generally not provided to third parties under this Act includes confidential business information and internal memos of the authority.Sanction decisions
Before imposing a fine, the ACM draws up a statement of objections on which parties may comment (in writing or orally). After this, the ACM will take a decision against which a notice of objection can be filed with the ACM. An appeal can be lodged against the ACM's decision (on administrative appeal) to the District Court of Rotterdam. An appeal can be lodged with the CBb against the District Court's decision.