Short Reads

Trade and Industry Appeals annuls fine imposed on real estate traders

Trade and Industry Appeals annuls fine imposed on real estate traders

Trade and Industry Appeals annuls fine imposed on real estate traders

01.08.2017 NL law

On 3 July 2017, the Dutch Trade and Industry Appeals Tribunal (CBb) annulled the fines imposed on real estate traders active on the market for the sale of houses under execution.

In 2011 and 2013 the Dutch Authority for Consumers and Market (ACM) imposed fines on the real estate traders for their involvement in a system of illicit cartel agreements [see our October 2013 Newsletter]. These decisions were mostly upheld by the District Court of Rotterdam in 2014 and 2016 [see our January 2015 Newsletter]. However, the appeal before the CBb led to an annulment of the fine as the CBb found that the ACM had failed to provide evidence of a single and continuous infringement.

The ACM found that 83 real estate traders participated in a single and continuous infringement concerning the sale of houses at execution auctions. According to the ACM, the real estate traders had the common goal to lower the prices at the official auctions.

These auctions had two phases. The first phase was an ascending price auction, after  which the price for the second phase would be determined by the highest bid (the entry price). The second phase was a descending price auction, which would start with a price above the entry price, while the entry price itself served as a price floor. To incentivize bidding during the first phase, the highest bidder would receive 1% of the entry price. According to the ACM the real estate traders would collude during the first and second phase to lower the price. The ACM submitted evidence showing that after the official auctions, the real estate traders would sometimes organize secret follow-up auctions amongst themselves. The winner of the secret auction would then compensate the other participants.

The CBb agreed that where follow-up auctions were held, the real estate traders' conduct was anti-competitive. However, the ACM only proved this for 215 of 2,328 auctions under investigation. Auctions that were not followed by a subsequent auction could not – according to the CBb – be considered to be part of a single and continuous infringement. For these auctions the ACM failed to prove that the conduct of the real estate traders was intended to lower the price at the official auctions. Alternative explanations were available and could not be dismissed without further investigation according to the CBb. As regards the 215 auctions that were deemed to be anticompetitive, the CBb found that the ACM could not establish a single and continuous infringement without an additional analysis by, as this finding (including the duration, scope and number of involved traders) had previously been based on the total number of 2,328 auctions.

Under Dutch law, the CBb has a discretionary power to refer cases back to the ACM, allowing it to review and amend the deficiencies in its decisions. However, in this case, it refused to do so due to the fundamental nature of the defects found in the evidence. Moreover, if a single and continuous infringement could be established based on the existing evidence, the CBb ruled any new decision would fundamentally alter the scope of the infringement as defined in the decisions subject to appeal. The CBb also considered that the ACM had sufficient opportunities to remedy the defects of its analysis, as the ACM's appeal advisory committee found, on two occasions, that the underlying evidence was insufficient. Finally, the CBb considered that any further analysis would require a substantial amount of time, which would negatively impact the addressee's right to a fair trial within a reasonable time.

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

1. Court of Justice dismisses Toshiba's appeal against the gas-insulated switchgear fine
2. Recent enforcement action demonstrates an increasing focus on compliance with procedural EU merger rules
3. District Court of Rotterdam upheld ACM's decision to clear lottery merger
4. ACM closes probe into Fox over live-soccer TV rights due to lack of evidence of consumer harm
5. District Court of The Hague rules on ACM's powers to select and inspect digital data

Team

Related news

17.07.2019 BE law
EU Single-Use Plastics Directive is now in force: brief recap

Articles - Plastic is a significant and growing global concern. A recent study commissioned by WWF and carried out by the University of Newcastle, Australia, suggests that people are consuming around 2,000 tiny pieces of plastic every week (which is approximately 5 grams of plastic, the weight of a credit card).  In this context, the EU adopted a new directive aiming at tackling marine litter generated from 10 single-use plastic products and from abandoned fishing gear and oxo-degradable plastics. This is called the Single-Use Plastics Directive and has entered into force this month, on 2 July 2019.

Read more

15.07.2019 EU law
ICO to impose record-breaking fines for inadequate security measures and data breaches

Short Reads - Though the European data protection authorities have taken their time in enforcing the GDPR, two announcements by the ICO in the UK regarding proposed fines for British Airways and Marriott demonstrate that large fines are about to start landing regularly. Both of the substantial fines are to be handed out as a result of shortcomings in handling data breaches caused by cyber-attacks.

Read more

04.07.2019 BE law
Higher fines ahead under Belgium's new competition act

Short Reads - Companies beware: on 3 June 2019, a new competition act entered into force in Belgium. The new act introduces a number of modifications to procedure and sanctions, aimed at improving enforcement of competition laws as well as the functioning of competition authorities.

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