umraniye escort pendik escort
maderba.com
implant
olabahis
canli poker siteleri meritslot oleybet giris adresi betgaranti
escort antalya
istanbul escort
sirinevler escort
antalya eskort bayan
brazzers
sikis
bodrum escort
Short Reads

District Court considered "franchise agreements" in breach of competition in launderette cartel case

District Court considered "franchise agreements" in breach of competition in launderette cartel case

District Court considered "franchise agreements" in breach of competition in launderette cartel case

02.06.2016 EU law

On 12 May 2016, the Rotterdam District Court ("District Court") handed down its judgment in the launderette cartel case. While the companies argued that the agreements under scrutiny formed part of a legitimate vertical franchise agreement, the District Court found that the agreements de facto were only horizontal in nature and did not qualify as a franchise.

In the 1970's, four companies involved in the provision of laundry services to health care institutions jointly established a subsidiary: Rentex Nederland ("Rentex"). Rentex concluded "franchise agreements" with its shareholders, under which Rentex Nederland acted as the franchisor and its shareholders as the franchisees. Under those agreements, each franchisee was allocated its own territory. Later, between 1998 and 2009, the franchisees also agreed to supply only customers situated in their own territory and to refrain from selling to customers located in other franchisees' territories. The Dutch Competition Authority (now "ACM") found these agreements to be in breach of the cartel prohibition ex Article 6 Dutch Competition Act. It therefore imposed fines of EUR 18.4 million in total on the companies participating in Rentex.

The companies appealed the decision before the District Court. They argued, inter alia, that the agreements with Rentex were not anti-competitive but rather formed part of a legitimate vertical franchise relation. The District Court dismissed this line of argument. First, the Court considered there was no actual vertical relationship between the companies on the one hand and Rentex on the other. Siding with the ACM, the Court found that Rentex did not employ independent market activities but only provided services to its shareholders. Hence, the agreements under scrutiny de facto were horizontal agreements to which the EU Vertical Block Exemption Regulation did not apply. Secondly, the District Court held that the agreements did not constitute a franchise, as Rentex did not concern an established party that transferred specific market experience and know-how to companies at another level of the market.

One of the companies claimed that it had no choice but to join the agreements. It argued that it was not one of Rentex' original participants but that it had acquired a participating launderette company and had no choice but adhering to its existing contracts with Rentex. The District Court agreed with the ACM's finding that this circumstance did not constitute commercial coercion as the acquiring company should have refrained from the acquisition altogether had it not wanted to participate in the cartel. Moreover, even if there would have been coercion that would not cancel out the company's own responsibility to abstain from competition law violations.

While the District Court upheld the ACM's substantive analysis, it partially annulled the decision for procedural reasons. First of all, it annulled the decision vis-à-vis one of the companies because it found that the applicable statute of limitation had expired. The Court also granted the remaining companies a EUR 5.000 fine reduction, as it found ex officio that the proceedings' 18-month duration were in breach of the obligation to adjudicate the case within a reasonable time.

The District Court's judgment illustrates that the competition law analysis of an agreement revolves around its economic context rather than its legal form. It also confirms that an acquiring company performing due diligence would do well to assess its target's potentially harmful agreements ahead of time, in order to make an informed decision concerning its risk exposure.

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

  1. General Court rejects Trioplast's action for annulment of a Commission notice to pay interest
  2. Commission blocked Hutchison's proposed acquisition of Telefónica UK
  3. General Court confirmed that German law on renewable energy amounts to State aid
  4. European Commission publishes guidance on the notion of State aid
  5. District Court of Rotterdam upheld the ACM's unconditional clearance decision in telecoms merger KPN/Reggefiber
  6. UK High Court held that territorial limits apply to EU cartel damages claims

Team

Related news

04.03.2021 NL law
Net(work) closing in on cross-border cartels?

Short Reads - A heads-up for companies with cross-border activities. The ECN+ Directive’s transposition deadline has expired and its provisions should by now have found their way into the national laws of the EU Member States. In the Netherlands, amendments to the Dutch Competition Act giving effect to the ECN+ Directive came into force recently, together with a new governmental decree on leniency.

Read more

04.02.2021 NL law
Game over? Gaming companies fined for geo-blocking

Short Reads - The Commission’s cross-border sales crusade seems far from over. The EUR 7.8 million fine imposed on distribution platform owner Valve and five PC video games publishers for geo-blocking practices is the most recent notch in the Commission’s belt. Food producer Mondelĕz may be next on the Commission’s hit list: a formal investigation into possible cross-border trade restrictions was opened recently.

Read more

04.03.2021 NL law
Amsterdam Court of Appeal accepts jurisdiction in competition law damages case concerning Greek beer market

Short Reads - On 16 February 2021, the Amsterdam Court of Appeal (the Court of Appeal) set aside a judgment of the Amsterdam District Court (the District Court) in which the District Court declined jurisdiction over the alleged claims against Athenian Brewery (AB), a Greek subsidiary of Heineken N.V. (Heineken), in a civil case brought by competitor Macedonian Thrace Brewery (MTB).

Read more

04.02.2021 NL law
ECJ clarifies limits of antitrust limitation periods

Short Reads - Companies confronted with antitrust investigations and fines may find safeguard behind the rules governing limitation periods (often termed ‘statutes of limitation’). However, two preliminary rulings by the European Court of Justice (ECJ) show that those rules are not necessarily set in stone. According to the ECJ, national time limits relating to the imposition of antitrust fines may require deactivation if these limits result in a ‘systemic risk’ that antitrust infringements may go unpunished.

Read more

29.01.2021 NL law
Publicatie en inwerkingtreding Uitvoeringswet Screeningsverordening buitenlandse directe investeringen

Short Reads - Op 4 december 2020 is een uitvoeringswet in werking getreden die bepaalde elementen uit de Verordening screening van buitenlandse directe investeringen in de Unie regelt en zorgt dat Nederland voldoet aan de verplichtingen uit die verordening. Ook is er een conceptwetsvoorstel toetsing economie en nationale veiligheid verschenen. 

Read more