Cartels and abuse of dominance
The Dutch Competition Act (Mededingingswet, Mw) and the Treaty on the Functioning of the European Union (TFEU) introduce specific obligations for undertakings not to distort competition. For example, they may not enter into anti-competitive agreements or concerted practices (the cartel prohibition) and undertakings that enjoy a dominant position may not abuse that position.
Article 6 Mw and Article 101 TFEU prohibit agreements, decisions by associations of undertakings and concerted practices that restrict competition. Agreements or decisions that infringe the cartel prohibition are automatically void.
The cartel prohibition includes both agreements between competitors (horizontal) and agreements between suppliers and customers (vertical). Agreements (between competitors) on prices and market sharing are for example strictly prohibited. The rationale is that each undertaking must determine its market behaviour independently. Even (indirect) information exchanges between competitors or concerted practices may therefore lead to an infringement. Vertical agreements, such as distribution, agency or franchise agreements, can for example restrict competition if they limit the buyer’s freedom to set its own selling price or whereby the supplier limits the buyer’s effective use of the internet. Read more about vertical agreements here.
The cartel prohibition is enforced by national competition authorities and the European Commission, which can impose high (personal) fines. Hence, the consequences of non-compliance can be very severe. Our competition lawyers regularly provide compliance trainings to enhance awareness of competition law risks amongst employees and directors of companies.
The competition lawyers of bureau Brandeis also have extensive experience in assisting undertakings and their directors subjected to investigations and fines, as well as in assisting complainants in enforcement proceedings. In that context, they regularly litigate at a national level (before the District Court of Rotterdam and the Trade and Industry Appeals Tribunal) and before the European Court of Justice.
Articles 6 Mw and/or 101 TFEU can also be invoked in civil proceedings, for example around the (unlawful) termination of an agreement. The lawyers of bureau Brandeis often litigate on the competition law aspects of contractual terms before Dutch national courts as well.
Abuse of a dominant position
Articles 24 Mw and 102 TFEU prohibit the abuse of a dominant position. If an undertaking has such a strong position in the market so that it can act independently of its competitors, customers and ultimately, its consumers, it has a special responsibility not to abuse that position.
Examples of abusive behaviour include tying practices, excessive or predatory pricing, or the use of unfair trading conditions. The notion of abuse is nevertheless an open standard and evolves with market developments and advancing technologies (for example in digital markets). With a creative eye, the competition lawyers at bureau Brandeis contribute in their daily practice to the development of (and defence against) new theories of harm that might qualify as abusive behaviour.
A finding of abuse of dominance can lead to particularly high fines or can be remedied by specific commitments to improve market behaviour in the future.
Do you have questions about the cartel prohibition and/or the abuse of dominance? Please contact one of our specialists below.