News Update Competition
5 October 2023
Since the beginning of 2023, there have been several notable developments in the area of competition law enforcement in the Netherlands.
Cartel enforcementThe Netherlands Authority for Consumers and Markets (ACM) imposed fines for various cartel infringements in relation to (i) the procurement of industrial eggs, (ii) the e-commerce of televisions and (iii) the manufacturing of traffic signs:
- Industrial eggs: On 22 December 2022, egg traders Interovo, Wulro and Global received a fine for fixing prices when purchasing industrial eggs from farmers. The ACM relied on an extensive body of WhatsApp messages to substantiate the single and continuous infringement. The traders sought an injunction to restrain publication of the decision, alleging material and procedural shortcomings. The decision was finally published in May 2023 after the injunction had been refused (in Dutch) by the Rotterdam District Court.
- Televisions: On 11 July 2022, LG Electronics Benelux Sales B.V. (LG) received a fine of almost EUR 8 million for fixing online retail prices of televisions. The ACM found that LG, in consultation with seven retailers through email and WhatsApp, coordinated retail prices to the recommended price that LG provided. LG requested retailers to stick to LG's recommended price and expected them to do so. If LG found deviations from their recommended price through monitoring the retailers' prices online and receiving complaints from other retailers, it contacted those deviating retailer(s) and convinced them to increase the price to the recommended level. The circumstance that LG did not deploy any (financial or other) incentives, sanctions or compulsory measures to keep the retailers to LG's recommended price led to a fine reduction. In 2021, the ACM fined Samsung for similar conduct.
- Traffic signs: On 12 July 2023, the ACM imposed fines on two traffic sign manufacturers (and their subsidiaries) for price-fixing and market sharing in relation to four tenders. Both manufacturers submitted a leniency application. The first leniency applicant Brimos did not receive a fine. The second leniency applicant Agmi received a 40% fine reduction (to EUR 56,000), as it provided significantly relevant additional information to the ACM whilst the investigation was ongoing.
Furthermore, on 18 July 2023 the Rotterdam District Court dismissed (in Dutch) an appeal by cigarette manufacturers against an ACM cartel decision. The court dismissed all substantive grounds of appeal that had been put forward by the manufacturers against cartel fines totalling more than EUR 82 million. The ACM found that the manufacturers colluded by indirectly sharing price lists with each other through their customers (wholesalers). The wholesalers shared these price lists with other manufacturers. As the manufacturers did not object to receiving these price lists and sometimes requested such information, the court confirmed the ACM's qualification of the concerted practice as a single and continuous infringement by object. The court rejected the manufacturers' argument that (a) all the parties involved shared the price lists for legitimate reasons, (b) these price lists were final and public from the moment of mailing and (c) the price lists were not requested by the manufacturers.
Abuse of dominanceLeadiant administratively appealed the ACM's July 2021 decision in which the ACM found that Leadiant abused its dominant position by charging excessive prices for the drug CDCA-Leadiant (for more details check our previous News Update). On 22 June 2023, the ACM concluded that Leadiant's complaints regarding the infringement period were partly founded (in Dutch). The ACM acknowledged that during four months in 2018, in which the Amsterdam University Medical Center produced an alternative to CDCA-Leadiant, Leadiant did not have a dominant position on the market. The ACM dismissed the other grounds of appeal. The shorter period of infringement led to a fine reduction from EUR 19.6 million to EUR 17 million.
Effectiveness of prohibition of abuse of dominanceThe Dutch Minister of Economic Affairs and Climate Policy commissioned research on the effectiveness of prohibition on the abuse of a dominant position (Article 24 Dutch Competition Act (Mededingingswet, "Mw", equivalent to Article 102 Treaty on the Functioning of the European Union). The researchers raise questions in relation to whether the Dutch prohibition provides sufficient possibilities to effectively address abuse of dominance. According to the researchers, effective enforcement of Article 24 Mw is currently extremely difficult, if not impossible, mainly due to (i) the fundamentally legally ambiguous nature of the concepts of ‘dominance’ and ‘abuse’, and the need for economic analysis to determine whether they apply in a given situation; (ii) the fact that allegedly dominant firms can contest findings relating to relevant markets, dominance and abuse; and (iii) the high standard of proof.
Furthermore, the researchers flag the risk of underenforcement in the Netherlands considering that the ACM (a) has reported 1.5 enforcement actions per year since 2015 and (b) has refrained from enforcement in 67% of enforcement requests since 2017.
The researchers made multiple recommendations to increase the effectiveness of Article 24 Mw, including (i) establishing clearer criteria or presumptions in relation to when something is unfair or unreasonable; (ii) changing public enforcement procedures; (iii) increasing the ACM's resources; and (iv) introducing market investigation tools in combination with the power to adopt behavioural and structural remedies. Interestingly, the researchers also suggest removing Article 24(2) Mw, which states that a concentration cannot constitute abuse of dominance (contrary to the European Court of Justice’s recent judgment in Towercast (C-449/23)).
Prioritisation of enforcement requests
With its new guidance on the prioritisation of enforcement requests (in Dutch), the ACM departed from its previous approach of only assessing potential harm to consumer welfare, introducing the broader criterion of whether the conduct harms: "the proper functioning of markets for people and businesses". The other elements that the ACM takes into account when assessing enforcement requests are (a) the public interest served by ACM enforcement and (b) whether the ACM is able to solve the issue effectively. The ACM has to publish a reasoned decision if it refuses an enforcement request.