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Competition Law Newsletter

Competition Law Newsletter

Competition Law Newsletter

02.02.2015 NL law

 

  1. General Court dismissed appeals against Commission's decision to publish leniency information.
  2. ACM examines industry-wide arrangements for enhanced animal welfare.
  3. Amsterdam District Court considered duplicate action to create jurisdiction not an abuse of process.
  4. No exchange of information proven between energy suppliers in Belgium.
  5. Actions for Damages in the Netherlands, the United Kingdom, and Germany.

1. General Court dismissed appeals against Commission's decision to publish leniency information
On 28 January 2015, the General Court ("GC") dismissed two applications (T-341/12 and T-345/12) that sought to prevent the Commission from publishing a new non-confidential version of an infringement decision containing information originating from leniency applications.

The two applicants, Evonik Degussa and Akzo Nobel, had applied for leniency which in 2003 revealed a cartel on the market for hydrogen peroxide and perborates. The Commission adopted an infringement decision in 2006 of which it published a non-confidential version in 2007. In 2012, the Commission decided to publish a new non-confidential version of the decision that would contain information originating from the applicants' immunity and leniency applications. The applicants sought to prevent the Commission from disclosing information originating from their respective leniency applications.

The present judgments mark the first time the GC rules on the Commission's ability to publish information originating from leniency applications. The recent GC and Court of Justice judgments on disclosure dealt with direct access to leniency documents, either on the basis of a request for access to documents on the basis of Regulation No 1049/2001 (the "Transparency Regulation") or in a civil procedure before a national court.

In the present judgments, the GC stated that the Commission's ability to disclose information concerning an infringement of EU competition law through the publication of a decision penalising an infringement cannot be conflated with allowing third parties access to documents contained in the Commission’s investigation file. Although the framework concerning access to documents under the Transparency Regulation is relevant for the question of what information the Commission is allowed to publish in a non-confidential version of an infringement decision, it is the Commission who prima facie decides what information can be published. According to the GC, the Commission has a broad margin of discretion in determining what information it will publish.

On the basis of these judgments, it can be concluded that while access to the actual leniency documents is governed by a strict framework on the basis of the Transparency Regulation that generally opposes disclosure of those documents, the Commission has been granted a broad margin of discretion for determining what information originating from those documents will be disclosed through the publication of a non-confidential version of an infringement decision. This may weigh in future considerations to apply for leniency, given that follow on litigants may eventually have access to this information.
      
2. ACM examines industry-wide arrangements for enhanced animal welfare
On 26 January 2014, the Netherlands Authority for Consumers and Markets ("ACM") published its analysis of a set of arrangements between supermarkets, poultry farmers, and broiler meat processors, concerning the selling of chicken meat produced under enhanced animal welfare-friendly conditions. In particular, the agreement saw to replace the regular chicken with the Chicken of Tomorrow, a chicken raised in a more animal friendly manner. According to the ACM, the arrangements restrict competition.

Undertakings can be exempt from the cartel prohibition if the consumer benefit exceeds consumer harm. With respect to benefits arising from sustainability initiatives, the ACM issued a Position Paper on Competition and Sustainability in 2014 to provide guidance to undertakings in their assessment of whether their intended cooperation is in accordance with the Dutch competition rules. The ACM notes that this assessment has to be conducted by the undertakings themselves. In the case of the poultry industry arrangements, however, the ACM explicitly uses its analysis of these arrangements to provide concrete guidance for sustainability initiatives.  

In examining the benefits of the poultry arrangements, the ACM considers the improvements to be limited: the animals obtain only slightly more space, have more litter on the floor and  live a couple of days longer in addition to some environmental improvements. Nevertheless, consumer research showed that improvements came at a cost higher than the consumer was willing to pay. The ACM therefore concluded that the potential advantages did not outweigh the reduction in consumer choice and potential price increases.  

The ACM furthermore considers the market for sustainable foods to be very dynamic and that there is no need for the removal of regular chicken. In particular, the ACM considered that the sales volume of chicken meat produced in a sustainable manner has increased through less restrictive alternatives such as informing the consumer about the available types of chicken.

The ACM discussed the outcome of its analysis with the market participants involved, who then announced that they will explore possible alternatives for their arrangements.  

The ACM's analysis follows its much criticized informal advice in 2013 to energy companies, wherein it considered their agreement to close coal-fired plants to be anticompetitive. The analysis concerning the Chicken of Tomorrow confirms that the ACM's policy is to treat sustainability initiatives equal to other forms of cooperation between competitors; in order to be exempt from the cartel prohibition, clear benefits to the consumer must outweigh consumer harm such as fewer options and higher prices.
      
3. Amsterdam District Court considered duplicate action to create jurisdiction not an abuse of process
In a judgment of 7 January 2015, the District Court of Amsterdam ruled that it has jurisdiction over antitrust "follow-on" claims instituted by claim vehicle Equilib against British Airways and Lufthansa. The District Court decided that Equilib did not abuse civil procedural rules by instituting a duplicate claim against them and only including KLM and Martinair to "anchor" the case in the Netherlands.

Already back in 2010, Equilib had instituted claims against KLM, Martinair and Air France before the same court on the basis of an alleged infringement of competition law as established by the European Commission in the air cargo decision. Four years later, Equilib started a second round of proceedings largely based on the same facts, this time including British Airways and Lufthansa.

British Airways and Lufthansa argued that this duplicate claim abused rules of civil procedure and the Brussels I regulation on jurisdiction, by only including KLM and Martinair to create jurisdiction before a Dutch court instead of having to start a case in the English and German homelands of the airlines.   

The Amsterdam District Court disagreed and stated that claimants may add new defendants to a case, for example to rectify mistakes or to prevent limitation periods to expire. Dutch procedural law does not hinder claimants starting a second round of proceedings against new defendants, including the same defendants as in the earlier case to anchor the case in the Dutch jurisdiction, after which the proceedings can be combined. This process occurs in legal practice, is acceptable and does not violate the Brussels I regulation, according to the District Court. The ruling of the District Court shows that the Dutch courts approve of the practice of forum shopping via anchor defendants and confirms again that the Dutch courts have low thresholds in accepting jurisdiction.
 
4. No exchange of information proven between energy suppliers in Belgium  
On 19 December 2014, the Belgian Competition Authority ("BCA") dismissed the claim that energy suppliers had exchanged information or engaged in prohibited concerted practices on green certificates (Case ABC-2014-I/O-25-AUD).

In 2011, the BCA investigated Belgian energy suppliers because the Flemish regulatory authority for electricity and natural gas ("VREG") noticed parallel behavior among a number of energy suppliers. According to the authority, there were indications that some players in the market made a (gentlemen’s) agreement on fixing selling prices of contributions to the green certificate obligations, violating the prohibition of anti-competitive agreements of Article IV 1. § 1 of the Code of Economic Law and Article 101 TFEU.
 
In Belgium, energy suppliers must buy annually a certain amount of green certificates in order to stimulate the use of renewable energy. One green certificate equals 1.000 Kilowatt hours of renewable energy, produced according to specific conditions. If the suppliers do not reach that target, they are required to pay a fine for each missing certificate.

The VREG noticed that several energy suppliers invoiced their customers a contribution based on the amount of possible fines instead of a contribution based on the actual price that was paid when buying the certificates. This latter price is lower than the possible fine, which means that the suppliers made a profit by using this method to calculate prices.

However, following an investigation, the BCA concluded that it could not prove any exchange of information about fixed selling prices. Moreover, the decision states that transparency on the energy market is high. Customers can simply take a look on the website of the distributors and compare prices and conditions offered by the suppliers. Also, suppliers have easy access to the commercial policies of a competitor, in particular regarding residential customers. The BCA also refers to the legislation as well as to the specific nature of the green certificate which is not a normal "sales product".

The BCA concluded that there are many possible justifications for this parallel practice in the energy market. Accordingly, there is no proof of the existence of anticompetitive agreements between the energy suppliers.
 
5. Actions for Damages in the Netherlands, the United Kingdom, and Germany  
Matthijs Kuijpers, et al. Survey on civil antitrust damages claims in the Netherlands, United Kingdom and Germany. Developments in these jurisdictions from July 2013 – July 2014 are discussed.
 

Team

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