Netherlands: Dutch Competition Authority’s Fining Methodology Upheld In Court

On 20 March 2013, the District Court of Rotterdam, ruling on an appeal in the silver skin onion cartel case, held that the Dutch Competition Authority ("ACM") was entitled to take the EU-wide turnover of the companies concerned as the basis for the imposition of fines.

In May 2012, the ACM imposed a total fine of over € 9 million on participants in a cartel affecting silver skin onions. The ACM found that five companies growing and processing onions agreed on the maximum area of land that each of them would farm, thereby limiting production and aiming to increase selling prices. The fines imposed were, for the first time, based on the EU-wide turnover of the undertakings involved. According to ACM, sales to customers outside the Netherlands, affected by the cartel, could have an impact on the competitive process and structure of the industry in the Netherlands. Moreover, the ACM considered that the European Commission or other Member States would not initiate an investigation concerning the same cartel.

On appeal before the Rotterdam District Court, the companies argued that the fines should have been based only on their turnover in the Netherlands and that the ACM was not competent to impose fines "extraterritorially" based on sales outside the Netherlands. In its recent decision, the Court concurred with the ACM. It held that Regulation 1/2003 grants the ACM the power to enforce the EU competition rules and impose fines for violations. On the basis of this Regulation, the Court found that the ACM can take into account EU-wide turnover for the calculation of the fine. The Court distinguished this case from the ACM's decision in the North Sea Shrimps case in which the basis for the calculation of the fine was limited to the undertakings' turnover in the Netherlands, since - unlike in the North Sea Shrimps case - no other national competition authority had conducted an investigation into the cartel. The Court also ruled that establishing an effect on trade between Member States does not require a finding that undertakings outside the Netherlands participated in the cartel.

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