News Update Competition

8 March 2021

The Dutch act implementing the ECN+ Directive ("the Implementing Act") entered into force on 18 February 2021. The Implementing Act seeks to safeguard the independence of National Competition Authorities ("NCAs") and their ability to effectively enforce competition law. We discuss the most important amendments below.

Changes to the Competition Act and the Act establishing the ACM

The Implementing Act amends the Dutch Competition Act (the "DCA") and the Act establishing the Authority for Consumers and Markets ("ACM") (the "IW ACM") in several ways:

• More limited use of information obtained from leniency statements and settlements (Article 49e DCA): Parties that have obtained information on the basis of access to leniency statements and settlements that were submitted by other parties, may only use such information when necessary to exercise their rights of defence during national court proceedings and only if it concerns the subject of the cases for which access was granted. These proceedings must concern the allocation of a fine between cartel participants or the review of the ACM's decision establishing a competition law infringement. In other proceedings, it is only allowed to use this information once the ACM has terminated its own enforcement proceedings in respect of all parties under investigation. A violation of this rule can be penalised with a maximum fine of EUR 900,000 or, if this is higher, 1% of the undertaking's turnover.
• Judicial authorisation for inspections (Article 53a DCA): Before the Implementing Act, judicial authorisation was only required for investigations in private homes. Now, the ACM needs judicial authorisation to inspect any premises, land or means of transport other than those of undertakings and associations of undertakings.
• Obligation to seek the views of market participants before adopting commitments (Article 12h(8) IW ACM). The ACM must now seek the views of market participants before adopting commitments. Although this practice was already followed by the ACM in other areas, this is now a specific competition law obligation. Such market testing can be done through a uniform public preparation procedure, but the ACM can also take a faster route by asking a number of selected parties for their views on the intended commitments. In practice, these views would have been obtained anyway, but the ACM now is also obliged to do so in certain circumstances.
• Reinforced ACM competences:
  (i) the ACM can now adopt a decision establishing that an infringement occurred in the past without having to impose a fine, in addition to the already existing competence to impose an administrative fine or an order subject to a penalty (Article 56(a) DCA). Although this type of decision had already been adopted in the past, for instance when a cartel participant obtained leniency, this provision leaves no doubt about the ACM's competence and is especially relevant in the context of private damages claims.
  (ii) The ACM can now impose interim measures on undertakings and associations of undertakings, with or without a periodic penalty payment, if it suspects that they have violated the competition rules, and where the risk of serious and irreparable harm to competition requires urgent measures (Article 58b DCA). Such measures can apply either for a specific (renewable) period or until a final decision has been taken. This new competence is meant to prevent additional damage to competition during the ACM's investigation. If a company does not comply with the provisional measures when they have not been suspended in an appeal procedure, the ACM can impose a fine or periodic penalty payment. This penalty can be cumulated with any other penalty that the ACM subsequently imposes for any substantive competition law violations.
  (iii) The ACM's competence to impose periodic penalty payments is now wider (Article 12m(3) IW ACM). The ACM can impose proportionate and dissuasive periodic penalty payments to compel undertakings to submit to inspections, provide concrete and correct information and to appear at interviews.

Leniency Decision

In line with the Implementing Act, the Leniency Decision (Besluit Clementie), provides the new Dutch leniency rules (Article 58c DCA). Although the leniency system, in substance, remains the same, there are two changes worth mentioning:

• When the conditions are satisfied, it is no longer possible for the ACM to deny leniency to ex-employees even if it determines that there is a conflict of interests with the investigation. This rule is meant to avoid legal uncertainty which arguably could restrain natural persons from cooperating in leniency applications.
• The wording of the conditions to obtain leniency, the criteria to submit leniency applications and the requirements of leniency statements have been adjusted to fully align with the Directive and provide legal certainty not only in the Netherlands, but also across Member States.

Conclusion

The new rules amend multiple aspects of the Dutch competition system to align it with the competences and enforcement system of the European Commission and other NCAs. The changes are relatively minor, as the ACM was already one of the more empowered NCAs, but these changes are certainly welcome. They will improve legal certainty and motivate undertakings to cooperate without underestimating the risks linked to illegitimate cooperation.