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Hague Court of Appeal rules on interpretation of object infringements

Hague Court of Appeal rules on interpretation of object infringements

Hague Court of Appeal rules on interpretation of object infringements

01.05.2017 EU law

On 4 April 2017, the Hague Court of Appeal ruled that supermarket and food service trade association CBL (Centraal Bureau Levensmiddelhandel) and its member Jumbo had not infringed article 6 of the Dutch Competition Act (Mw) when setting minimum standards for preventing the sale of alcohol and tobacco to underage customers. The ruling overturns the earlier judgment of the District Court of the Hague finding an infringement of the Dutch cartel prohibition.

In the Netherlands, it is prohibited to sell alcohol and tobacco to underage customers. To prevent such sales, Hollandsche Exploitatiemaatschappij (HEM) developed a system to verify the age of a customer by taking a picture at the cash register and having it evaluated off-site. Separately, CBL, with 95% of all supermarkets as its members, launched a Campaign in 2009 and drafted a Code of Conduct in 2012 that focused on age verification by the cashier. With the Campaign and Code CBL in effect introduced a minimum standard for CBL's members.

HEM initiated proceedings against CBL and Jumbo, alleging a cartel infringement resulting in the exclusion of HEM's system from the market. The District Court considered that the Campaign and Code amounted to an object infringement. It reached this conclusion by observing HEM's system was excluded from the market. The Court of Appeal overturned the ruling of the District Court. Referencing Cartes Bancaires, the Court observed that the concept of 'object infringement' should be interpreted restrictively. In this case, the Court of Appeal considered that there was no object infringement. CBL Members were free to use additional verification measures. For example, one supermarket experimented with the HEM system while adhering to the Campaign, showing that the Campaign and Code did not exclude the use of the system. The Court also found it relevant that CBL's members had considered the system but decided against it for reasons relating to the system itself.

Decisions of trade associations and the concept of object infringements have come up a few times recently (e.g. Alpe d'huZes and De Geborgde Dierenarts). The District Court's ruling in this case was met with questions from practitioners that observed the limited substantiation for the finding of an object infringement. Additional questions were raised about the compatibility of the District Court's ruling with Cartes Bancaires. The judgment of the Hague Court of Appeal has now reconfirmed the restrictive interpretation of object infringements. HEM has indicated it will appeal the rulings before the Supreme Court.

This article was published in the Competition Law Newsletter of May 2017. Other articles in this newsletter:

  1. Court of Justice allows use of evidence received from national tax authorities
  2. Court of Justice clarifies parental liability rules in the context of prescription
  3. European Commission publishes report on effectiveness of enforcement in online hotel booking sector
  4. Dusseldorf Court confirms that Asics' online sales restrictions violate competition law
  5. Commercial Court of Ghent grants compensation to parallel importers for competition law infringement by Honda

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