1. Streamlining Act came into force on 1 August 2014
On 1 August 2014, the "Streamlining Act" (Stroomlijningswet), which seeks to harmonise the powers of the Dutch Authority for Consumers and Markets ("ACM"), entered into force. This is the second legislative step in merging the three former Dutch regulators NMa (the competition authority), OPTA (the post and telecoms authority), and the Consumer Authority. While the "Establishing Act" (Instellingswet) of February 2013 mainly provided for technical changes in the Competition Act, the Streamlining Act includes a number of changes as to the ACM's enforcement powers.
Most of these changes relate to the extension of competences or procedural rules that previously only applied to competition law enforcement. For instance, legal professional privilege of correspondence exchanged between a company and its lawyer has now been extended to all the ACM activities. However, the Streamlining Act also introduces some relevant changes for competition law practice.
As of 1 August 2014, the worldwide turnover threshold for merger notifications to the ACM has been raised from EUR 113.45 million to EUR 150 million. The national turnover threshold remains EUR 30 million. As a consequence, the Dutch merger control thresholds are now as follows: the combined worldwide turnover of at least two undertakings concerned exceeded EUR 150 million in the preceding financial year and the domestic turnover of each of at least two of the undertakings concerned was EUR 30 million or more. For insurance companies, the threshold consists of the value of the gross contributions written in the preceding financial year, of which now at least EUR 30 million has to be received from Dutch residents. The same applies to pension funds.
Furthermore, the Streamlining Act limits the right to remain silent solely to current employees of the undertaking that is subject of a competition law investigation. This amendment is contrary to an earlier ruling by the Dutch Trade and Industry Appeals Tribunal ("CBb" 21 December 2012, NL:CBB:2012:BY7031 and NL:CBB:2012:BY7026 in which it was established that former employees are also entitled to invoke the derivative right to remain silent. Former employees can nevertheless still rely on their personal right to remain silent when they are requested to provide information about their own conduct.
The Streamlining Act also introduces a wide obligation on every person or undertaking to provide information to the ACM, if this is reasonably necessary for the ACM to perform its tasks. The latter implies the ACM can now also retrieve information for market analyses and reports. The ACM can impose a maximum fine of EUR 450,000 or 1% of the company's turnover for failure to comply with an information request. When providing information to the ACM, companies should realise this information can be exchanged between the various divisions within the ACM, as provided for by the Establishing Act last year.
Finally, it is interesting to note that when a fining decision relates to a very serious infringement, such as an infringement of the cartel prohibition, the ACM is now under a statutory duty to publish the entire decision, with the exception of confidential business information. However, the ACM has to wait ten working days, in order to allow the parties concerned to ask for interim measures.
On 1 August 2014, the new fining policy rules for the imposition of fines by the ACM also entered into force. The "Fining policy rule ACM 2014" (Boetebeleidsregel ACM 2014) and "Policy rule Leniency" (Beleidsregel Clementie) do not contain any substantial changes. Under the new leniency rules, the first leniency applicant that meets the applicable criteria is now always granted a 100% reduction of the fine. Furthermore, for leniency applicants that are not eligible for immunity, three new reduction categories have been introduced: 30-50%, 20-30% and ≤ 20%. The Dutch government is still working on legislation to enable the ACM to impose higher fines than the current statutory maximum. In July the Ministry of Economic Affairs started a public consultation on draft legislation.
2. The ACM reduced cartel fines for launderettes for excessive duration of its own administrative procedure
On 15 August 2014, the Dutch Authority for Consumers and Markets ("ACM") published its decision on the administrative appeal of four companies, which it had previously fined for cartel practices in the Dutch launderettes sector. The ACM reduced the fines imposed on the launderettes by 30% due to excessive duration of the administrative procedure.
In its initial decision of 8 December 2011, the ACM had concluded that the four companies had divided between themselves the Dutch market for laundry services to healthcare providers. They also agreed not to compete with each other outside their allocated geographic area. The ACM had imposed fines for a total of EUR 18 million on the launderettes for their illegal behaviour between 1998 and 2009. In its decision on the administrative appeals the ACM dismissed all substantive arguments of the launderettes against its finding of an infringement of the cartel prohibition. However, the substantial reduction of the fines was based on the ACM's failure to conclude its investigation and adopt a final decision within a reasonable period. During the administrative phase, the ACM issued an additional Statement of Objections ("SO") without merit. That is, the information contained in the additional SO could not be used as evidence to support the infringement as previously established by the ACM. Because of the excessive duration of the administrative procedure, partially caused by the issuing of the additional SO, the ACM reduced the fines of each addressee by 30%. A period of three years and three months elapsed from the issuance of the ACM's SO to the decision on the administrative appeal. On the basis of settled case law a duration of two years for this period is considered reasonable. Interestingly, the ACM did not impose a cap on the reduction of the fines for the unreasonable duration of the administrative procedure. This resulted in a total fine reduction of EUR 5.2 million. Recent successful complaints in other cases before the District Court of Rotterdam and the Trade and Industry Appeals Tribunal ("CBb") concerning the unreasonable length of administrative and judicial proceedings only led to minor fine reductions due to the application of a cap. The CBb has set the cap at EUR 10,000 for situations in which the duration of the proceedings exceeded the average reasonable duration by twelve months or less. Both courts decide on a case-by-case basis on the appropriate cap for proceedings in which the average reasonable duration is exceeded by more than one year. For example, in the Shrimps case, in which the average reasonable duration of the administrative and judicial proceedings was exceeded by two and a half years, the CBb set a cap of EUR 55,000. It remains to be seen whether the ACM's more generous approach of uncapped fine reductions will have implications for the future approach of the appeal courts.
3. Belgian Competition Authority adopted new guidelines on the calculation of fines
On 26 August 2014, the Board of the Belgian Competition Authority adopted new guidelines on the calculation of fines. These guidelines replace the Communication of the Belgian Competition Council on the calculation of fines of 19 December 2011.
The Belgian Competition Authority decided to align the Belgian guidelines with the guidelines of the European Commission on the method of setting fines. This implies that regardless of whether the investigation is led by the Belgian Competition Authority or by the European Commission, the companies active in Belgium will be sanctioned according to the same calculation method. There are limited specific adaptations, for example to refer to the Belgian turnover concerned as a starting point for the fine calculation.
As a result of the application of the new guidelines, infringements could be sanctioned much more severely. This applies in particular to infringements of a longer duration since under these new guidelines the basic amount of the fine will be multiplied by the number of years of infringement (until now this was a maximum of 30%). The Belgian Competition Authority stressed in the press release that it considers that fines are an important deterrence tool.
The guidelines will not be applied in cases where natural persons infringed the competition rules.
The new guidelines on the calculation of fines will be applied to cases where a draft decision is presented to the Competition Authority after 1 November 2014.
4. Belgian Competition Authority fined Electrabel EUR 2 million for abuse of a dominant position
On 18 July 2014, the Belgian Competition Authority (“BCA”) imposed a fine of EUR 2 million on Electrabel, Belgium’s largest energy provider, for abusing its dominant position between 2007-2009 and during the first quarter of 2010 (Case CONC-I/O-09-0015).
The BCA ruled that Electrabel infringed Article 3 of the Belgian Competition Act (applicable at the time – now article IV.2 of the Code of Economic law) and Article 102 TFEU on the market for the production, wholesale and trading of electricity by adopting and applying for sales of parts of the reserved capacity on the Belpex DAM exchange, a price scale including an excessive margin of 60 euros/MWh.
Electrabel’s arguments contesting the product market definition and disputing its dominant position were rejected by the BCA, which confirmed the findings of the Belgian Regulator for Electricity and Gas (“CREG”) that the company artificially raised electricity prices on the Belpex Belgian power exchange, thereby abusing its dominant position. However, the BCA dismissed the claim that Electrabel had kept excessive electricity reserves, on the grounds that it was not clear at the time that such conduct was anti-competitive and that Electrabel did not appear to try deliberately to increase its prices through such action.
In accordance with article IV.70, §1 of the Belgian Code of Economic law and the guidelines for the calculation of fines of 19 December 2011, the College took into account Electrabel’s directly affected turnover estimated at less than EUR 5 million for the duration of the infringement.