Articles

ACM fined cold-storage companies and their executives EUR 12.5 million for breaching competition law during merger negotiations

ACM fined cold-storage companies and their executives EUR 12.5 million for breaching competition law during merger negotiations

ACM fined cold-storage companies and their executives EUR 12.5 million for breaching competition law during merger negotiations

04.04.2016 NL law

On 23 March 2016, the Netherlands Authority for Consumers and Markets ("ACM") released public versions of decisions adopted in 2015 in which it fined four cold-storage companies a total of EUR 12.5 million for breaching the cartel prohibition. The ACM also imposed fines on five executives, the highest of which amounted to EUR 144,000.

According to the ACM's decisions and press release, the companies engaged in merger talks between 2006 and 2009, during which they allegedly: (i) exchanged competitively sensitive information on refrigerated food storage prices and capacity utilizations rates, (ii) agreed to allocate customers and pass on price increases, and (iii) rigged bids submitted to potential customers.

In 2012, the ACM conducted dawn raids at various premises of the companies involved following information received from an informant. The companies all operated refrigerated/frozen warehousing facilities used to store goods, particularly concentrated juices and fish. The ACM's investigation concluded that during the (failed) merger negotiations, which took place over three years, the companies breached the competition rules by sharing competitively sensitive information and by committing other far-reaching "by object" infringements (e.g. sharing future capacity and highly sensitive client-specific information).

One of the undertakings, Kloosbeheer B.V., failed to receive leniency in one of the ACM decisions because the ACM considered that it could not (and did not) provide information with sufficiently "significant added value" within the meaning of the ACM leniency guidelines. Kloosbeheer, however, did receive a 10% reduction of the fine imposed for the "mitigating factor" of going well beyond its legal obligation to cooperate with the investigation. Interestingly, in another decision concerning Kloosbeheer, it was granted the benefit of a "simplified procedure" – usually reserved for settlement decisions – by agreeing to the ACM's description (and legal qualification) of the facts, the fines imposed, and liability of its directors. In this case, the ACM has taken a novel approach by adopting different types of decisions aimed at a specific undertaking in a single cartel investigation.

This case also highlights the importance of ensuring adequate safeguards are defined and put in place before engaging in merger negotiations (e.g. setting up "clean teams" during pre-merger due diligence). Any exchange of commercially sensitive information – regardless of the context in which it takes place – remains liable to violate competition law.

This article was published in the Competition Law Newsletter of April 2016. Other articles in this newsletter:

1. Court of Justice annulled Commission's requests for information in cement cartel case
2.
Initial findings of Commission's e-commerce sector inquiry show widespread use of geo-blocking
3.
Dutch Trade and Industry Appeals Tribunal confirmed that ACM can use EU-wide turnover in calculating the fines in onion cartel case
4.
New Leniency Guidelines applicable in Belgium since 22 March 2016
5.
Belgian Constitutional Court rules that actions for antitrust damages cannot be time-barred before the final infringement decision is rendered

Team

Related news

07.11.2019 NL law
Tackling Big Tech up-front? Time to stop thinking and start acting

Short Reads - Benelux competition authorities have published a joint memorandum on how best to keep up with challenges in fast-moving digital markets. As well as calling on the European Commission to issue an economic study on digital mergers, the memorandum calls for an ex ante intervention tool to fill the gap between interim measures and ex post enforcement. This tool would pre-emptively impose behavioural remedies on digital gatekeepers without first having to establish an actual competition law infringement.

Read more

08.11.2019 BE law
Interview with Wouter Ghijsels on Next Gen lawyers

Articles - Stibbe’s managing partner Wouter Ghijsels shares his insights on the next generation of lawyers and the future of the legal profession at the occasion of the Leaders Meeting Paris where Belgian business leaders, politicians and inspiring people from the cultural and academic world will discuss this year's central theme "The Next Gen".

Read more

07.11.2019 NL law
Rotterdam District Court rules that claims in elevator cartel damages proceedings need further substantiation

Short Reads - The Rotterdam District Court has ordered claimant SECC (a litigation vehicle) to substantiate its claims in proceedings against Kone and ThyssenKrupp regarding the elevator cartel. The Court also ruled that some claims have become time-barred, unless SECC can show that these were timely assigned to SECC and notified to Kone and ThyssenKrupp. The Court rejected several defences of Kone and Thyssenkrupp, including a jurisdictional challenge based on arbitration clauses between the defendants and assignors of claims to SECC.

Read more

07.11.2019 NL law
Safeguarding legal privilege: better safe than sorry?

Short Reads - The European Court of Justice recently ruled that the European Commission does not have to take additional precautionary measures to respect the right of legal professional privilege when conducting a new dawn raid at the same company. Companies are well-advised to mark clearly all communications covered by legal privilege as 'privileged and confidential' and to keep all privileged communication separate from other communication.

Read more

Our website uses functional cookies for the functioning of the website and analytic cookies that enable us to generate aggregated visitor data. We also use other cookies, such as third party tracking cookies - please indicate whether you agree to the use of these other cookies:

Privacy – en cookieverklaring