Competition Flashback Q4 2024 – EU and Dutch competition law developments
This is the Competition Flashback Q4 2024 by bureau Brandeis, featuring a selection of the key EU and Dutch competition law developments of the past quarter (see the original version here). Would you like to receive the Competition Flashback by email in the future? You can subscribe to our mailing list here.
For a preview of 2025, we would like to refer you to our Flash Forward 2025.
Overview Q4 2024
Merger control
Cartel damages
Cartels & vertical restraints
Abuse of a dominant position
Regulated markets & consumer law
Prohibition joint venture Thyssenkrupp and Tata Steel upheld by CJEU
Court of Justice of the European Union, judgment of 4 October 2024
On 4 October 2024, the Court of Justice of the European Union (“CJEU”) dismissed Thyssenkrupp’s appeal against the European Commission’s (“Commission”) decision prohibiting its proposed joint venture (“JV”) with Tata Steel. Thyssenkrupp and Tata Steel, both active in the production of steel products, had notified the Commission of their plans for the JV on 25 September 2018. The Commission blocked the proposed JV on the grounds that it would significantly impede effective competition. In particular, the JV threatened to restrict choice for business customers and increase prices of steel products for the automotive and packaging industries.
The General Court of the European Union (“General Court”) dismissed Thyssenkrupp’s appeal against this decision fully. Thyssenkrupp based its case on an earlier judgment of the General Court in the CK Hutchison case, which seemed to impose stricter requirements on the Commission for establishing a significant impediment to effective competition (the SIEC-criterion).
However, after Thyssenkrupp lodged its appeal, the CJEU delivered its judgement in the CK Hutchison case on appeal and reversed the stricter requirements imposed by the General Court. As a result, Thyssenkrupp’s argument – that the General Court had failed to adhere to the previously established stricter requirements – was undermined. The CJEU dismissed Thyssenkrupp’s appeal, leaving the Commission’s decision to block the joint venture firmly in place. What initially seemed like an opportunity to leverage a legal precedent turned out to be a misguided strategy, as the stricter standard had in the meantime already been rejected by the CJEU.
Microsoft informs European Commission of ‘acqui-hire’ Inflection AI under DMA
European Commission, publication of 17 October 2024
On 17 October 2024, tech giant and gatekeeper Microsoft informed the Commission of its hiring of a significant part of the staff of Inflection AI, a US-based technology company specialising in machine learning and generative artificial intelligence. Under the Digital Markets Act (“DMA”), gatekeepers like Microsoft are required to inform the Commission about all mergers related to core platform services, other digital services or those enabling data collection to the Commission.
Microsoft’s notification stands out for two reasons. First, Microsoft believes that the transaction does not constitute as a ‘concentration’ under European competition law, as it involves only the acquisition of key personnel and a non-exclusive licensing agreement – commonly referred to as an ‘acqui-hire’. Despite this position, Microsoft opted to inform the Commission. Second, this acquisition had previously been referred to the Commission by several Member States under Article 22 of the Merger Regulation (“EUMR”). However, following the Illumina/GRAIL judgment of the CJEU (see our Competition Flashback (“CF”) Q3 2024), these referral requests were withdrawn.
Appeal against approval of Vodafone’s takeover of Liberty Global dismissed
General Court of the European Union, judgment of 13 November 2024
On 13 November 2024, the General Court dismissed the appeals of Deutsche Telekom, Tele Columbus and NetCologne – three German telecom companies – against the Commission’s approval of Vodafone’s acquisition of certain Liberty Global activities in Germany, the Czech Republic, Hungary and Romania. The appellants argued that the Commission had made manifest errors in assessing the transaction’s impact on competition, particularly with regards to the German markets for the retail supply of TV signal transmission services, especially in view of Vodafone’s dominant position in those markets.
The General Court upheld the Commission’s decision, finding that the merging parties were neither actual (direct or indirect) nor potential competitors in the relevant markets before the transaction. Consequently, the transaction did not weaken the competitive constraint exerted by their competitors. The Court stated that the mere fact that a concentration creates or strengthens a dominant position is not in itself sufficient to show that it is incompatible with the internal market. Although Vodafone was indeed dominant on the relevant markets, the Commission could rightly find that the acquisition did not result in a direct and significant impediment to effective competition.
Application Vifo Act extended to new sectors
Ministry of Economic Affairs and Ministry of Justice and Security, consultation document of 19 December 2024
Since mid-December 2024, a legislative proposal is pending to expand the scope of the Dutch Wet veiligheidstoets investeringen, fusies en overnames (“Vifo Act”) to include new sectors and technologies. The Vifo Act, which came into force on 1 June 2023, enables the government to assess investments and acquisitions involving vital providers and providers of sensitive technologies for potential risks to national security (see also our first and second Competition Newsflash on the Vifo Act). The proposal concerns an amendment to the Besluit toepassingsbereik sensitieve technologie, which regulates which sensitive technologies fall within the scope of the Vifo Act. The minister proposes to add biotechnology, artificial intelligence, advanced materials and nanotechnology, sensor and navigation technology, and nuclear technology with medical applications to this list. The public internet consultation on the proposal will take place from 19 December 2024 to 31 January 2025.
A legislative amendment is also pending at EU level, specifically regarding the European investment screening mechanism – the Regulation establishing a framework for the screening of foreign direct investment into the Union (“FDI Regulation”). Among other things, this proposal aims to harmonise national rules and ensure all Member States implement effective screening mechanisms. Key elements of the amendment include:
- Requiring Member States to adopt screening mechanisms that meet specific (procedural) standards.
- Introducing a minimum sectoral scope to ensure key industries are covered in all Member States.
- Extending the FDI Regulation to cover investments by investors based in EU ultimately controlled by individuals or entities outside the EU.
This proposal is currently under consideration by the European Parliament and national parliaments.
Overview highlights merger cases
Heineken jointly liable for abuse subsidiary based on concept of undertaking
Amsterdam District Court, judgment of 23 October 2024
Pending the preliminary questions on the issue of jurisdiction, the Amsterdam District Court has handed down an interlocutory judgment on the merits regarding Heineken’s liability as the (grand)parent company of AB, which was fined by the Greek competition authority for abuse of dominance. The proceedings examine whether Heineken is jointly liable for the damage suffered by MTB as a result of AB’s infringement (see also CF Q1 2024, Q2 2023 and Q3 2022). The court answers this question in the affirmative on the basis of the concept of undertaking and in particular – as it concerns upward liability – on the basis of the ‘Akzo-presumption’ as was also elaborated by AG Kokott in her opinion in the preliminary reference proceedings.
First, the court clarifies that it is unnecessary to await the outcome of the preliminary proceedings on jurisdiction concerning Greek AB, as this issue only pertains to jurisdiction over the claim against AB. The court confirmed its jurisdiction over claims against Heineken, noting that Heineken is part of the same corporate group addressed in the infringement decision. It clarified that the Greek authority’s decision not to investigate Heineken’s role further does not preclude its liability.
Because Heineken (indirectly) owns almost all the shares in AB, the court finds that the Akzo presumption applies. The fact that it should be applied in a civil context in the same way as in a public law context is even an acte éclairé, according to the court. Heineken’s defence in which it claims not to have exercised decisive influence over AB’s abusive conduct is deemed irrelevant by the court. To rebut the presumption, Heineken needed to show it lacked decisive influence over AB in general, which it failed to do. The court highlighted factors such as Heineken’s ability to influence strategic decisions, the hierarchical reporting structure, and overlapping directors as evidence of its decisive influence. Consequently, Heineken was found jointly and severally liable for damages stemming from AB’s infringement. In the next step, Heineken (and AB if the court is found to have jurisdiction) must submit statements on the alleged damages.
Although upward liability is widely accepted in the public law sense, this judgment represents an important milestone for (Dutch civil) cartel damages law. It holds an unaddressed entity within a corporate group liable for damages arising from conduct committed by another group entity.
Amsterdam court clarifies damages calculation for air cargo cartel claims
Amsterdam District Court, judgment of 6 November 2024
In its interlocutory judgment of 6 November 2024, the Amsterdam District Court set out how to calculate the damages suffered by victims of the air cargo cartel. The court instructed economists hired by the parties to issue a Joint Expert Statement, outlining their points of agreement and disagreement. The claim foundations representing the victims, SCC and Equilib, proposed a ‘one-step’ model. This approach calculates damages directly using transaction data from shippers (the victims represented by SCC and Equilib). The airlines, on the other hand, proposed a ‘two-step’ model, first determining whether the airlines charged an overcharge to their customers, the freight forwarders, and then whether and to what extent these freight forwarders passed on any overcharge. The court stressed that both models are accepted in the Commission’s practical guide on quantifying harm.
The court concluded that the one-step model delivers sufficiently reliable results, while the airlines failed to convincingly demonstrate that the two-step model would produce more accurate or reliable outcomes. Damages will be calculated solely using transaction data from shippers. The analysis will focus on the total price paid by shippers, rather than only the surcharges, as the airlines had proposed. This decision streamlines the process of calculating damages in cartel claims, favouring simpler and more direct methods when they meet reliability standards. The ruling provides clarity for future cases and reinforces the practicality of the one-step model in similar claims.
FIFA transfer rules in violation of free movement and competition rules
Court of Justice of the European Union, judgment of 4 October 2024
The CJEU has issued another significant ruling on the intersection of sports and competition law, following its previous rulings on the International Skating Union and the European Super League. This latest case arose from a dispute initiated by footballer Lassana Diarra, who challenged various rules applied by FIFA regarding the international transfer system. Diarra complained that under FIFA rules, if a player terminates his employment contract without ‘just cause’ before the normal term, the new club is jointly and severally liable for any compensation due to the former club. Additionally, the new club may be prevented from registering new players in certain cases, and FIFA requires national associations to refuse to issue an International Transfer Certificate as long as the player and the former club are in dispute over the termination of the contract.
The CJEU ruled that these three rules are incompatible with EU law. First, these rules impede the free movement of workers (Article 45 TFEU), as they prevent professional football players from working for a new club in another Member State. The Court reasoned that the restrictions went beyond what is necessary to ensure the regularity of interclub football competitions or to maintain stability in the player rosters. Moreover, the CJEU finds that these rules violate the cartel prohibition laid down in Article 101(1) TFEU. The CJEU emphasises that the ability of football clubs to recruit professional players is an important parameter of competition. Restricting that possibility is similar to a non-compete or non-poach clause that has as its object the restriction of competition between clubs. Ultimately, the CJEU held that, subject to the final judgment of the Mons Court of Appeal (Belgium), these rules did also not appear to be necessary or indispensable for FIFA to achieve certain legitimate objectives.
Final ruling CBb in cold-storage cartel
Trade and Industry Appeals Tribunal, judgment of 5 November 2024
On 5 November 2024, the Trade and Industry Appeals Tribunal (College van Beroep voor het bedrijfsleven, “CBb”) has delivered its final ruling on Samskip’s appeal against the € 901,000 fine imposed on the company for its involvement in the cold-storage cartel. The case, which dates back to 2015, saw the Dutch competition authority (Autoriteit Consument & Markt, “ACM”) fine several companies (including Samskip, Eimskip, Van Bon (now: H&S Coldstores) and Kloosterboer) for coordinating tariffs and/or exchanging competitively sensitive information related to fish storage in cold stores. The fining decision for Kloosterboer IJmuiden B.V. (“KBIJ”, a wholly-owned subsidiary of Samskip throughout the infringement) and Daalimpex Logistics B.V. (a wholly-owned subsidiary of Eimskip throughout much of the infringement) was annulled by the Rotterdam District Court in 2018. However, with the CBb’s ruling in 2020, this judgment was overturned, the ACM’s decision ‘revived’ and the case was referred back to the Rotterdam District Court.
In the present judgment, the CBb addresses Samskip’s grounds of appeal with regard to the attribution of the infringement and the calculation of the fine. Samskip mostly argued, both in relation to the rebuttal of the Akzo presumption and relating to various principles of good governance, that it was not Samskip, but the Kloosterboer group (from whom it had acquired KBIJ), that was responsible for determining KBIJ’s commercial policy during the relevant period. According to Samskip, the fine cannot therefore be attributed to it, or at least the ACM wrongly failed to take into account the links between KBIJ’s director and the Kloosterboer group when calculating the fine.
The CBb dismissed all Samskip’s material grounds of appeal, affirming the ACM’s conclusion that Samskip exercised decisive influence over KBIJ and was aware of the anti-competitive agreements entered into by KBIJ and failed to take any corrective action. It also rejects Samskip’s arguments regarding the scope of the ACM’s investigation, access to the case file and the proportionality of the fine, including the severity factor applied by the ACM and the mitigating circumstances that were recognised for other parties.
Nevertheless, the CBb does agree with Samskip’s argument that the case’s handling time – nine years and eight months – exceeds the reasonable time limit. As a result, the CBb reduced Samskip’s fine by € 45.000, accounting for nine six-month delays at € 5.000 each. This final ruling concludes the cold storage cartel case after nearly a decade, marking the end of a protracted legal saga.
General Court confirms revised €12.1 million fine Pharol and Telefónica for market sharing
General Court of the European Union, judgment of 2 October 2024
On 2 October 2024, the General Court upheld the revised fine of € 12.1 million that the Commission imposed on Pharol (formerly Portugal Telecom) and Spanish company Telefónica in 2022 for engaging in a market-sharing agreement. The ruling stems from an earlier 2013 Commission fining decision, by which the two telecom companies were jointly fined € 79 million. That fine was based on a non-compete agreement between Pharol and Telefónica, which the Commission deemed an illegal market-sharing arrangement entered into during a merger between the companies. Although the 2013 decision was upheld on appeal, the General Court ordered the Commission to reassess the turnover figures and adjust the fines accordingly.
In its revised 2022 decision, the Commission reduced the fine on Pharol from € 12.3 million to € 12.1 million after correcting the turnover figures. In that decision, the Commission furthermore referred to “preparatory steps” the telecoms companies could take to enter each other’s markets, a point that was not explicitly mentioned in the original 2013 decision. According to Pharol, the Commission should therefore have adopted a supplementary Statement of Objections to allow the company to formally respond. Instead, Pharol was provided (only) with an accompanying letter of facts.
The General Court rejected this argument, stating that a supplementary Statement of Objections is only required when there are new charges or when there is substantially altered evidence, such as newly formulated grievances. In contrast, a letter of facts is sufficient when existing objections are corroborated by new evidence, as is the case here. The General Court underlines that merely the turnover values were recalculated and that the parties had the opportunity to comment on any new evidence mentioned in the letter of facts. This did not change the core nature of the original decision. With this judgment, the Court dismissed Pharol’s appeal and confirmed the revised fine of € 12.1 million.
Commission fines Czech and Austrian railway companies for collective boycott
European Commission, publication of 23 October 2024
On 23 October 2024, the Commission announced that it had imposed fines totalling € 48.7 million on the Czech and Austrian railway companies České dráhy (“CD”) and Österreichische Bundesbahnen (“OBB”) respectively, for violating the cartel prohibition laid down in Article 101 TFEU. The Commission found that, between 2012 and 2016, the two companies jointly obstructed competitor Regiojet from entering and expanding in the Czech rail market and on the international route between Prague and Vienna. Specifically, CD and OBB coordinated (or: falsified) the sales procedures of OBB’s used train wagons to prevent Regiojet from acquiring them, thereby hindering its ability to compete with the two incumbents. Additionally, CD and OBB exchanged confidential information regarding the bids of other interested parties.
As part of the leniency program, OBB received a 45% reduction in its fine, which ultimately amounted to € 16.7 million. CD, however, did not cooperate with the investigation and was fined nearly € 32 million. The Commission had previously investigated CD for potential predatory pricing but closed this investigation in September 2022. Read more about the recent developments regarding the Dutch rail network in our blog.
CJEU clarifies role of counterfactual in determining restriction of competition by effect
Court of Justice of the European Union, judgment of 5 December 2024
In response to preliminary questions from a Latvian court, on 5 December 2024, the CJEU once again clarified the difference between the analysis for a by object and by effect restriction under Article 101 TFEU, and the role of the counterfactual analysis in that regard.
In 2014, the Latvian competition authority fined the only authorised importer of KIA cars in Latvia for entering into anti-competitive agreements with dealers and authorised repairers. In particular, these agreements involved imposing certain warranty conditions on car owners. These conditions obliged them, during the warranty period, to have (i) any periodic maintenance and (ii) repairs not covered by the warranty carried out exclusively by these parties, always using KIA spare parts in order for the warranty to remain valid. This, according to the authority, had the effect of hindering the access of independent repairers and spare parts manufacturers to the Latvian market. At the same time, the Latvian authority stated that the negative effects on competition resulted from the nature of the restrictive clauses so that it was not necessary to demonstrate the actual effects. After a successful cassation appeal and a referral back to the first instance court, the Latvian court questioned this approach, prompting the CJEU’s clarification.
The CJEU reiterated that only when the conduct in question cannot be presumed to have an anti-competitive object is it necessary to examine whether it actually or potentially has the effect of restricting competition. To do so, it is necessary to examine competition within the factual framework in which it would occur in the absence of the agreement (the counterfactual). This scenario must be realistic and credible, but the Court stressed that potential effects can be considered, as long as they are appreciable. It is up to the national court to assess whether the authority has examined this correctly.
Fashion house Pierre Cardin and licensee Ahler fined for restricting cross-border sales
European Commission, press release dated 28 November 2024
The Commission has fined fashion house Pierre Cardin and its largest licensee, Ahler, for a total of € 5.7 million for restricting cross-border sales of clothing bearing the Pierre Cardin brand. Based on its investigation, the Commission concluded that, between 2008 and 2021, the two companies had entered into agreements in breach of Article 101 TFEU. These agreements were aimed at restricting sales of Pierre Cardin clothing by other Pierre Cardin licensees, both offline and online, outside their assigned licensing territories and/or to discount retailers. The ultimate aim of these agreements was to provide Ahler with complete territorial protection in the countries covered by its licence agreement. This prevented retailers from freely sourcing products in Member States with lower prices and thus artificially dividing the internal market. Remarkable is that apart from the supplier (licensor Pierre Cardin), the buyer (licensee Ahler) also received a heavy fine.
General Court dismisses appeal banks in bond cartel
General Court of the European Union, judgment of 6 November 2024
In its judgment of 6 November 2024, the General Court upheld the fines imposed on Crédit Agricole and Credit Suisse (now part of UBS), among others, for their participation in a cartel relating to the secondary market for US dollar-denominated supra-sovereign and sovereign bonds as well as bonds issued by government agencies. The two banks were fined a total of almost € 16 million. Deutsche Bank reported the cartel to the Commission and thus escaped a fine.
The banks argued on appeal that the Commission misunderstood the role of banks as ‘market makers’, claiming that exchanging information was necessary to cover certain trading risks. The General Court dismissed Credit Suisse’s appeal in its entirety. Crédit Agricole’s appeal was largely dismissed, but the General Court did annul the fine decision insofar as it concerned the duration of the infringement. According to the General Court, Crédit Agricole’s participation did not start on 10 January 2013, but one day later – on 11 January 2013. Nevertheless, the General Court upheld the amount of the fine.
Commission allowed to take over cartel investigation into metal packaging sector from Bka
General Court of the European Union, judgment of 2 October 2024
On 2 October 2024, the General Court ruled that the Commission had jurisdiction to take over the investigation into cartel behaviour in the German metal packaging sector from the German competition authority (the ‘Bundeskartellamt’, “Bka”). The investigation, which started in 2015, involved several companies active in this sector, including Crown Holdings and Crown Cork & Seal Deutschland (collectively “Crown”). In 2018, the Bka requested the Commission to take over the investigation, a request that the Commission granted. Shortly thereafter, Crown submitted a leniency application, after which the Commission adopted the contested (settlement) decision in July 2022, imposing a fine of over € 7.6 million. Crown appealed this decision, arguing that the Commission did not have jurisdiction to take over the investigation in the first place, because the transfer was not made within the prescribed two-month period.
The General Court notes that the ‘Cooperation Notice’ (Commission Notice on cooperation within the Network of Competition Authorities), which outlines procedures for case referrals, merely prescribes that problems with a case referral are ‘usually’ resolved within two months. According to the Court, however, it is clear that this wording does not provide ‘precise certainty’ that these two months cannot be exceeded. Moreover, the principle of subsidiarity, which allows the Commission to act only when EU Member States cannot do so sufficiently themselves, had not been violated. The Court emphasises that the Commission acted at the express request of the Bka. This therefore does not infringe the rights of the Member States, the Court said.
General Court confirms € 31.7 million fine HSBC for participating in euro interest rate derivatives cartel
General Court of the European Union, judgment of 27 November 2024
On 27 November 2024, the General Court upheld the € 31.7 million fine imposed by the Commission on HSBC for its participation in a cartel in the euro interest rate derivatives sector, together with Crédit Agricole and JPMorgan Chase. This ruling follows an earlier fine decision by the Commission of 7 December 2016 where HSBC had been fined € 33.6 million for participating in the cartel. However, the General Court annulled that fine in September 2019 due to insufficient reasoning by the Commission.
Following the annulment, both HSBC and the Commission lodged an appeal. However, the Commission adopted a new fining decision in June 2021 to remedy the situation following the annulment of the previous decision. In this new decision, the amount of the fine was adjusted to € 31.7 million. The Commission subsequently withdrew its appeal against the 2019 General Court judgment. On 12 January 2023, the CJEU rejected HSBC’s appeal against the original decision, but upheld the General Court’s judgment insofar as it concerned the annulment of the € 33 million fine. The new 2021 fining decision provided precisely for that annulment to be remedied.
The General Court’s November 2024 judgment refers to the last decision of June 2021. The General Court again rejected HSBC’s grounds of appeal against this decision. HSBC argued that the Commission had not imposed the (new) 2021 fine in time. However, the General Court held that the appeal to the CJEU lodged by the Commission had suspensory effect. The fact that the Commission took a new decision to comply with the 2019 General Court judgment does not mean that the Commission’s interest in its appeal lapsed. The fact that the Commission subsequently withdrew its appeal does not alter this, according to the General Court.
Final annulment of Intel fine for abusive exclusivity rebates
Court of Justice of the European Union, judgment of 24 October 2024
On 24 October, the CJEU rejected the Commission’s appeal against the annulment of the € 1.06 billion fine it imposed on Intel. This puts a definitive end to the so-called Intel saga as regards the imposition of exclusivity discounts, after more than 20 years.
In the original 2009 fining decision, the Commission found that Intel abused its dominant position in the global market for microprocessors with an x86-architecture. Intel was accused of (i) offering exclusivity discounts to major computer manufacturers including Dell, HP, Lenovo, Acer, and IBM, and (ii) making payments to HP, Acer and Lenovo to delay or cancel the launch of products with processors manufactured by Intel’s competitor Advanced Micro Devices (“AMD”) (so-called ‘naked restrictions’).
The General Court upheld the fining decision in 2014. However, in 2017, the CJEU annulled the fine and referred the case back to the General Court. The General Court confirmed the annulment, against which the Commission appealed. Afterward, the Commission imposed a new fine of € 376 million in September 2023 for the ‘naked restrictions’ (see also CF Q3 2023). With this ruling, the CJEU now definitively rules that the Commission did not sufficiently prove that the exclusivity rebates applied by Intel could have anti-competitive effects and foreclosed competitor AMD.
The CJEU stresses several times in its judgment that it is for the Commission to prove that the exclusivity discounts could at least have had exclusionary effects, having regard to all the relevant factual circumstances. In doing so, the General Court is not required, despite any errors made by the Commission, to actively examine whether, on the basis of another reasoning, an infringement could possibly still be established when such reasoning as such is not part of the decision. All of the Commission’s grounds of appeal relating to the application of the ‘as efficient competitor’ test, standards of proof and infringement of defence rights are dismissed. Thereby, the fine imposed for applying exclusivity discounts is definitively off the table.
€ 800 million fine Meta for tying Facebook Marketplace and unfair trading conditions
European Commission, press release dated 14 November 2024
The Commission has imposed a fine of € 797 million on Meta, the parent company of Facebook, for tying Facebook Marketplace to the online social networking service Facebook, and for unilaterally imposing unfair trading conditions on other online advertising service providers that advertise on Meta’s platforms. In doing so, Meta abused its dominant position (Article 102 TFEU) in the European market for social networking services and national markets for online advertising on social networking services, according to the Commission.
By tying its online advertising service Facebook Marketplace to Facebook, all Facebook users automatically have access to and interact with Facebook Marketplace, regardless of whether they want to. The Commission concludes that this may exclude competitors of Facebook Marketplace from the market, as the tying gives Facebook Marketplace a significant distribution advantage. The Commission also concludes that Meta has unilaterally imposed unfair trading conditions on other online advertising service providers that advertise on Meta’s platforms, particularly in relation to Facebook and Instagram. This allows Meta to use data generated by other advertisers exclusively for the benefit of Facebook Marketplace.
‘Place order’ button insufficiently clear about consumer payment obligation
Supreme Court of the Netherlands, judgments of 4 October 2024
In October 2024, the Dutch Supreme Court (Hoge Raad, “HR”) issued two significant rulings on the legal consequences of unclear texts on order buttons in online transactions. Consumer protection law requires the text on an order button to make clear that the consumer is entering into an obligation to pay (see Article 6:230v (3) of the Civil Code).
In the first case, a consumer had ordered a number of items on the Dutch webshop bol.com. The district court sought clarification from the HR regarding whether the button text ‘place order’ met the legal requirements regarding an order button. In light of the wording of the provision and the legislative history, the HR held that a distinction must be made between the act of ‘placing an order’ on the one hand and ‘entering into an obligation to pay’ on the other. Texts such as ‘place order’ or ‘order’ do not make it sufficiently clear that a consumer enters into an obligation to pay when clicking the button. As a result, the HR ruled that if the text on the order button is inadequate, the consumer can annul the contract. As the consumer had not appeared before the court in the case at hand, the district court had to partially annul the contract, meaning that the consumer gets to keep the product but does not have to pay the full price.
The second case involved a consumer who had registered online for a course by clicking on a button with the text ‘register now’. According to the court, the text did not meet the legal requirements regarding the order button (Article 6:230v (3) of the Civil Code). Here, another question was submitted to the HR: despite the fact that the contract must be annulled on the grounds of violation of the order button provision and the transaction must be reversed, can a trader claim compensation for services rendered? The HR ruled that in cases of delivered performance, such as education, the trader can claim reasonable compensation for the value of the delivered performance if the contract is annulled.
Enforcement Revised Payment Services Directive
Authority for Consumers & Markets, press release dated 11 October 2024
On 11 October 2024, the ACM took action against Rabobank for failing to comply with the Payment Service Directive II (“PSD2”, or the Revised Payment Services Directive). This legislation, which came into force in the Netherlands on 19 February 2019, was designed to enable payment institutions to access bank infrastructure, allowing them to offer payment services to both consumers and businesses. Specifically, under the PSD2, payment institutions are entitled to open business payment account and payment service providers are entitled to access payment systems. The ACM, as the designated supervisory authority, is responsible for enforcing the directive.
In 2022, the ACM requested that the legislature address a gap in the law, as it found that it could not effectively supervise Dutch banks that refused to offer payment accounts to payment institutions from other EU Member States. Since then, the ACM has enforced (publicly) only once against a bank that did not comply with the directive. Following the ACM’s intervention, Rabobank pledged not to impose barriers in the future when payment institutions want to open a bank account with Rabobank. Rabobank put such access applications ‘on hold’ or imposed unnecessary financial requirements (such as high turnover thresholds).
Although enforcement of the PSD2 has been limited in recent years, competition authorities have put the enforcement of a level playing field high on their agendas. For instance, the ACM championed a level playing field between Big Tech and other market participants and stressed the importance of access to NFC technology for the development of payment apps. Since March 2024, the DMA requires gatekeepers to give third parties access to hardware and software features, including NFC technology on mobile devices. Moreover, it enforced commitments from Apple in this area last summer.
ZuivelNL pledges to provide more insight into spending on contributions dairy farmers
Authority for Consumers & Markets, decision of 17 October 2024
On 17 October 2024, the ACM declared binding commitments made by ZuivelNL – the chain organisation of the dairy sector in the Netherlands – on the spending of contributions paid to it by dairy farmers. ZuivelNL collects contributions to carry out, among other things, research, animal welfare and sustainability, food safety, education, export and market information. Dairy farmers do not pay this contribution directly to ZuivelNL; instead, they pay a contribution to the milk processors, such as FrieslandCampina or Royal Lactalis Leerdammer, who purchase their milk. The milk processors then pay contribution to ZuivelNL. On 5 July 2022, the ACM received an enforcement request from a supplier association of dairy farmers, accusing ZuivelNL of using the received contribution for activities not related to the sale of milk. This allegedly violated the Unfair Trade Practices in Agriculture and Food Supply Chain Act (“Wet OHP”). Indeed, Article 2(1)(d) of that act prohibits a buyer from requiring the supplier to make payments unrelated to the sale of the supplier’s agricultural and food products.
The concern among dairy farmers was that they lacked transparency regarding how their contributions were being spent, leading to confusion about whether the funds were being used for activities tied to milk sales. To address this, ZuivelNL committed to making the link between the contributions and milk sales-related activities more visible in its budgets and annual accounts. The organisation also pledged to publicly disclose this information and have its annual accounts audited by an independent accountant. Furthermore, ZuivelNL agreed to review and adjust the contribution levels every three years. The ACM considered these commitments to be effective in ensuring that dairy farmers are only required to pay dues that are relevant to the milk supply chain. As a result, the ACM declared the commitments binding.
The Wet OHP, which came into force on 1 November 2021, aims to strengthen the bargaining power of farmers, growers and fishermen against larger and concentrated market players. Research by the ACM shows that many buyers and suppliers are not yet fully aware of the new law. This lack of awareness is a significant issue, as many parties are not yet reporting violations.
For all your questions regarding (EU) competition law, bureau Brandeis would be happy to assist.
Bas Braeken – Jade Versteeg – Lara Elzas – Timo Hieselaar – Demi van den Berg – Joost van Belois