The NMa fined three ship-waste collection companies for almost EUR 3 million for cartel activities. It came across information on a possible cartel through telephone taps installed by the Intelligence and Investigation Service of the former Ministry of Housing, Spatial Planning and Environment. Telephone transcripts were handed over to the NMa by the Public Prosecutor and the Intelligence and Investigation Service. The NMa, like the European Commission, is not authorised to tap telephones when investigating possible anti-competitive practices, but that apparently does not prevent it from using recordings of telephone taps obtained by other regulators as evidence for its investigations.
The District Court of The Hague ruled in an earlier case regarding bid rigging in the construction sector that the Public Prosecutor can lawfully provide the NMa with transcripts of telephone taps installed for criminal investigation purposes. The NMa increasingly taps new sources of information on possible competition law infringements through cooperation with, for instance, other competition authorities,1 the Fiscal Intelligence and Investigation Service2 and the Public Prosecutor.3 These "tip offs" are likely to increase in future since the Minister of Economic Affairs, Agriculture and Innovation is looking into ways to facilitate information exchange between regulatory authorities in the Netherlands, as well as further intensify the cooperation between investigative authorities. The NMa itself has also indicated to favour increased information exchange among regulators at national as well as international level by removing the statutory restrictions in the Dutch Competition Act preventing it from passing on information about activities falling under the supervision of other authorities.
Odfjell, one of the ship-waste collectors fined, has indicated it is considering claiming damages because before it bought AVR Maritiem, the Odfjell subsidiary involved in the alleged cartel, it had been one of AVR Maritiem's customers.4 Odfjell bought AVR Maritiem in January 2008, five months after the cartel ended, and it intends to recover the NMa fine from the previous parent companies.
E books under scrutiny... or not?
The NMa recently indicated it has high hopes of increased competition on the e-book market as a result of the government's recent decision against fixed prices for e-books and the development of a Digital Platform in which publishers and sellers will cooperate to store and distribute e-books. The European Commission and the US Department of Justice, however, have each opened a formal investigation into the sale of e-books.
According to the NMa, competition on the market for Dutch e-books has lagged behind because, amongst other things, book sellers are inclined to follow the retail price recommended by publishers. In addition, there is a limited supply of Dutch e-books. The Digital Platform to be developed by publishers and sellers is likely to fix the problem of limited supply and thus will have a pro-competitive effect, particularly since the NMa has been offered the commitment that access to the platform will be on objective, transparent and non-discriminatory terms.
The e-book market is, however, not off the hook yet. The European Commission initiated formal proceedings to investigate the sale of e-books on 6 December 2011 after having carried out dawn raids in March 2011. The focus of its investigation is on whether a number of international publishers have, possibly with Apple's help, entered into illegal price-fixing arrangements in regard of e-books. The Commission is particularly interested in "the character and terms of the agency agreements entered into by the publishers and retailers for the sale of e-books". The UK competition authority OFT had been investigating the sale of e-books in parallel and in close cooperation with the European Commission but closed its investigation on 6 December 2011 in order for the European Commission to take the lead in the investigations. It has, however, stated that it may reopen the investigation, in consultation with the Commission, if "it has reasonable grounds to suspect that there is an infringement of competition law, which may have an impact on UK consumers". In the US, a class action was filed in August 2011 against Apple and a number of publishers for collusion to increase e-book prices and the US Department of Justice confirmed on 7 December 2011 that it is investigating potential anti-competitive activity in the e-books market.
Dawn raids at mobile operators attract a lot of media and political attention
On 6 December 2011, the NMa raided the premises of mobile operators KPN, Vodafone and T-Mobile on suspicions of collusion in regard of "mobile telecommunications offerings on the Dutch consumer market" and "the division of independent sales channels". Interestingly, the NMa had been tipped off by the press and a politician about the alleged collusion and the press was present when the NMa conducted the dawn raids. Immediately after the dawn raids, the Dutch Parliament debated the issue with the Minister of Economic Affairs. Meanwhile, the NMa commented that an infringement still needs to be proven.
The dawn raid was initiated by statements of a former business unit director of one of the mobile operators and a current member of the board of another mobile operator. Apart from confirming the dawn raid in a press release, member of the NMa board Henk Don commented that "the NMa has had its eye on the telecom sector for some time already".
In 2002, the NMa imposed fines initially totalling EUR 88 million for the alleged coordinated behaviour between the mobile operators following a meeting in which commercially sensitive information was exchanged regarding reductions in dealer bonuses for sales of pre- and post-paid mobile telephone subscriptions. In appeal, the Trade and Industry Appeals Tribunal (Tribunal) sought guidance from the European Court of Justice (ECJ) on the interpretation of the concept of concerted practice. After the preliminary ruling by the ECJ in the T-Mobile case5, the Tribunal ordered the NMa to reassess the evidence adduced by the mobile operators to rebut the presumption of a causal link between the meeting and the subsequent parallel behaviour. Although the NMa was not convinced by the operators' arguments, it did reduce the fines earlier imposed on KPN, Vodafone and T-Mobile to take account of the Tribunal's view that the infringement was not as grave as considered by the NMa and the fact that the reasonable time limits for decision-making and judicial review had been exceeded.
Are the NMa's Chinese walls crumbling?
The Trade and Industry Appeals Tribunal (Tribunal) confirmed that high standards apply to the interdepartmental Chinese walls within the NMa, a peculiarity unknown within the European Commission. The Tribunal upheld the Rotterdam District Court's earlier ruling that the NMa Legal Department's meddling in the investigation of an alleged competition law infringement was contrary to the Chinese walls set up between the Legal Department, responsible for levying sanctions, and the Competition Department, responsible for conducting investigations.
The NMa's Legal Department had requested further information from a third party after the hearing on the statement of objections, which was subsequently used as evidence in the decision to impose a fine on the plaintiff. The Tribunal deemed that the Legal Department's information request qualified as an investigation contrary to the Chinese walls between investigation and decision-making within the NMa. By doing so, the NMa lost sight of the required objectivity in its decision-making process and thus created the appearance of bias. According to the Tribunal, the Rotterdam District Court had therefore been right to annul the NMa's fining decision.6 The NMa has stated that the ruling will have no impact on its current decision-making process since "the collection of information as it took place in this particular case is not common practice".
The NMa's statutory Chinese walls go one step further than the "traditional" all in one system according to which the European Commission and many other antitrust regulators seem to be organised. The European Court of Human Rights recently confirmed that such all in one systems of investigation and fining comply with the fundamental right to a fair trial, provided they are safeguarded by sufficiently extensive review of the sanctioning decision by an independent court. Advocate General Sharpston came to a similar conclusion in the appeals relating to the copper-tube cartel, in which the Commission's "triple role of investigator, prosecutor and decision-maker in competition law enforcement procedures" was criticised.7 The ECJ recently confirmed this view. All in one systems, particularly that of the European Commission, thus seem to be safe for the time being at least.
Hardcore restrictions still require an "appreciability check"
In line with settled EU case law, the Supreme Court ruled that the Leeuwarden Court of Appeal (Court) was right to qualify the termination of a distribution contract by bicycle supplier Batavus under pressure of one of its largest customers as a concerted practice having an anti-competitive object of which there is no need to consider its actual effects. However, contrary to what the Court claimed, it is still necessary to consider whether competition has in fact been restricted to an appreciable extent, even if an anti-competitive object has been established.
Batavus was pressured into terminating the distribution contract with the plaintiff by Euretco, one of Batavus's largest customers. Euretco was displeased with the plaintiff's low resale prices on the Internet for Batavus bicycles and threatened to stop purchasing bicycles from Batavus if the plaintiff's contract was not terminated. Batavus itself did not consider the low prices problematic. The Supreme Court agreed with the Court that the termination constituted a concerted practice with the anti-competitive object of resale price maintenance, since the termination was not a unilateral decision by Batavus but one taken under pressure and aimed at ending the price competition by the plaintiff. However, the Court was wrong in finding that it was no longer necessary to consider the appreciability of the concerted practice since it qualified as a hardcore restriction. The Supreme Court has referred the matter to the Arnhem Court of Appeal for a decision.
"Ownership" in the context of the Block Exemption on vertical agreements
The Supreme Court has clarified that the exception to the duration of a non-compete as laid down in the (old) Block Exemption for vertical agreements (the BE) should be interpreted according to national law.
In dispute was whether a non-compete of 20 years duration concluded between energy company BP and the operator of a number of petrol stations could fall within the exception laid down in the BE according to which the five-year limit for non-compete obligations does not apply "where the contract goods or services are sold by the buyer from premises and land owned by the supplier or leased by the supplier from third parties not connected with the buyer (...)". In the case at hand the Province of Utrecht owned the land rented by the service operator that subsequently sub-let it to BP to build the petrol stations to be exploited by the service operator. BP argued that the BE's exception was applicable because, even though it could not be regarded as the "owner" from a legal point of view, it did have "economic" ownership because it built the petrol stations.
The Supreme Court referred to EU case law according to which the concept of ownership in the BE is not a "concept of Community law which is independent of the law of the Member States. Given that, pursuant to Article 295 EC (now Article 345 TFEU), the Treaty in no way prejudices the rules in the Member States governing the system of property ownership, a Community regulation cannot be considered to use a concept of ownership different from those which exist in the Member States." Since economic ownership does not qualify as ownership according to Dutch law, the Supreme Court ruled that the BE's exception does not apply where the supplier, from an economic point of view, has premises or land at its disposal because it rents them from the buyer or from a third party connected to the buyer. As a result, BP could not benefit from the BE's exception.
Is the Netherlands a paradise for damage claimants?
The Netherlands is the only EU country where a collective settlement of mass claims can be declared binding on an entire class on an "opt out" basis. This makes the Netherlands an attractive venue for settling international mass claims, regardless of whether any (class action) litigation has taken place in the Netherlands. In addition, Dutch courts seem to assume jurisdiction quite easily and legal costs are capped, making it a popular country for international cartel claims. And it will probably stay that way until the European Commission takes the plunge and introduces EU legislation on collective actions in antitrust as well as on the protection of leniency programmes.
Because most claims concerning antitrust damages result in out-of-court settlements or arbitration proceedings, not many cases are known. However, it is clear that the number of cases brought before a court in the Netherlands has increased significantly in the past five years. This trend is likely to continue. Damages actions are currently pending in the Netherlands against cartels in regard of paraffin wax, sodium chlorate, elevators, air cargo and switch gear. In the elevators case, the Dutch organisation 'Stichting Meldpunt Collectief Onrecht' filed a collective damages claim before the Rotterdam Court in December 2010 following the European Commission's decision in the cartel case. Equilib, a special purpose company of Claims Funding International, has filed a collective damage claim against Air France-KLM and Martinair before a Dutch court in September 2010 for the airlines' role in the air cargo cartel. More recently in the switchgear cartel, TenneT, the operator of the Dutch electricity grid, has taken steps in the Netherlands to recoup losses following the European Commission's decision in the switchgear cartel case.
For more than two years now, the European Commission has been working on ways to facilitate damages claims at EU level. A draft Directive on rules governing antitrust damages actions was shot down by a number of Member States and certain MEPs in 2009. In February 2011, the Commission launched a public consultation on an EU approach to collective redress and in November 2011, Commissioner Almunia stated that the outcome of this consultation would be used to draft specific provisions on collective actions in antitrust. In addition, he intends to launch an EU initiative for damages actions before national courts, as well as in regard of the tension between public and private enforcement of the EU competition rules, which particularly revolves around access to evidence obtained in a leniency procedure in civil antitrust actions. The Dutch Parliament does not seem to want to await the EU initiatives: a motion was tabled in November 2011 requesting the government to draw up a plan for representative organisations to bring actions for damages by February 2012. Depending on how fast the Commission will work out its initiatives, the Netherlands will remain a "claimants' paradise".
Footnotes
1. See also "NMa paints bleak picture for cartel facilitators" in our Competition Newsletter of June 2009, in which the NMa requested the Belgian competition authority to search the home of the cartel facilitator's manager.
2. See also "Fines grow on trees" in our Competition Newsletter of October/November 2007, in which the NMa was tipped off by the Fiscal Information and Investigation Service, which found cartel-related documents during its investigation. See also the NMa press release of 28 April 2011 according to which the Fiscal Intelligence and Investigation Service provided the NMa with cartel-related information found during an investigation, which led to the NMa investigating a potential real estate trading cartel.
3. See also "Big brother is listening: the NMa can use Public Prosecutor's telephone taps" in our Competition Newsletter of July 2009.
4. See article in Het Financieele Dagblad of 23 November 2011.
5. See also our Competition Newsletter of January / February 2009 and our Legal Alert of 4 June 2009.
6. In an unrelated later judgment, the Tribunal clarified that these Chinese walls are not so impregnable to prevent the NMa board members from deciding on the statement of objections as well as on the levying of fines. See the ruling by the Tribunal of 4 October 2011, LJN: BT6521.
7. The Advocate General states in this respect: "in that context, unlimited jurisdiction to cancel, reduce or increase the amount, with no restriction as to the type of grounds (of fact or law) on which it can be exercised, must necessarily, in my view, provide the guarantee required by Article 6 ECHR – at least in theory."
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
