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Dutch Trade and Industry Appeals Tribunal upholds appeal and confirms fines on taxi companies

Dutch Trade and Industry Appeals Tribunal upholds appeal and confirms

Dutch Trade and Industry Appeals Tribunal upholds appeal and confirms fines on taxi companies

02.05.2019 NL law

The Trade and Industry Appeals Tribunal (CBb) recently overturned two judgments of the Rotterdam District Court and confirmed the fines imposed on two taxi firms. The CBb judgments nuance the District Court of Rotterdam's previous focus on market definition.

Although the CBb considered defining the relevant market essential for the application of the de minimis provision, the CBb notes that market definition is not an end in itself. The two decisions can be viewed here and here.

On 23 April 2019, the Trade and Industry Appeals Tribunal (CBb) overturned the judgments of the Rotterdam District Court and confirmed the fines imposed on two taxi firms. The fines, totalling over EUR 8m, were previously imposed on the companies by the ACM in 2012 for bid-rigging.

In its decision of 20 November 2012, the ACM concluded that the taxi operators had engaged in bid-rigging arrangements involving contractual taxi transport services. In the analysis, the ACM limited the relevant geographic market to the Rotterdam region. As a result, the parties' combined market share exceeded the 10% threshold for the de minimis provision under Article 7 of the Dutch Competition Act.

On appeal before the District Court of Rotterdam the taxi operators argued that the ACM had insufficiently substantiated its position that the geographic market should be limited to the Rotterdam region. The District Court agreed, finding that the ACM had failed to adequately determine the relevant geographic market. As a result, the District Court was unable to determine whether or not the cartel would fall within the scope of the Dutch de minimis provision.

The ACM's main arguments on appeal before the CBb revolved around the adequacy of its investigation and whether that investigation was sufficient (i) to conclude that the agreements had an appreciable effect on competition, and (ii) to determine whether the agreement would fall within the scope of the Dutch de minimis provision.

Contrary to the District Court, the CBb found the ACM's investigation to be sufficient to conclude that the agreements had an appreciable effect on competition. Relevant factors for the CBb's assessment included the goal of the agreements, the nature of the affected services and the structure of the market.

The CBb also disagreed with the District Court on the adequacy of the ACM's investigation concerning the geographic market definition. According to the CBb, the ACM's investigation was sufficient to reach the conclusion that the geographic market should be delineated at the level of the Rotterdam region. To reach this conclusion the CBb considered the wording of the agreements, which showed that the parties specifically aimed to limit the competition in the Rotterdam region. Arguments in favour of a national market were dismissed by the CBb.

In this light, the CBb confirmed the fines initially imposed by the ACM, but reduced the amount of the fines by EUR 10,000  in view of the excessive length of the proceedings.

The key takeaway is that the CBb's has adopted a nuanced approach to market definition. Although the CBb considers the delineation of the relevant market to be essential for the application of the de minimis provision, it notes that the requirements differ according to the circumstances of each case. Market definition is not an end in itself, but a tool for the competition law analysis.

 

This article was published in the Competition Law Newsletter of May 2019. Other articles in this newsletter:

Team

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