This article was originally published on Kluwer Competition Law Blog. Please click here for the original article.
The Dutch Trade and Industry Appeals Tribunal (College van Beroep voor het bedrijfsleven, “CBb”) reduced a fine imposed by the Dutch Authority for Consumers & Markets (“ACM”) on an unidentified undertaking with 99%, from €1 million to €10.000. The ACM asked the court to lower the fine, after being urged by the fined undertaking, because of special recent circumstances, including the consequences of COVID-19.
This judgment is one of the first concrete signs of the impact of COVID-19 on cartel cases in the Netherlands. The case not only has impact from a legal perspective but also in practical terms. As the fine had already been paid by the undertaking, ACM now has to pay back €990.000,- to the fined undertaking. This potentially has a huge impact on state treasury if more reductions of fines are accepted due to COVID-19. Furthermore, although this might seem to be a victory for the appellant, the price the fined undertaking had to pay for the reduction of the fine was giving up its other grounds of appeal. As a result its violation of the competition rules is now a fact of law laying down a basis for potential civil damage claims.
In this blog we briefly discuss the case and flag potentially relevant developments which this case reflects.
Following a leniency application, the ACM started an investigation into a potential cartel and concluded in 2017 that indeed the undertakings concerned were engaged in prohibited pricing agreements that reduced competition between them. This resulted in a fine of €2.798.000,- on the appellant, which eventually has been lowered by the ACM to an amount of €1.935.000,- after the appellant challenged the original amount. The District Court of Rotterdam confirmed ACM’s findings in 2018, but lowered the fine even further to an amount of €1.000.000.
Inability to pay-defense
In the appeal proceedings before the CBb, the appellant took the position that its financial position is currently so bad that the fine imposed by the ACM – and as reduced by the court – is no longer proportionate. According to the appellant, its bankruptcy is now imminent partly due to the fine, which had already been paid by the appellant. To evidence this, appellant requested the CBb to come to a judgment as soon as possible, while agreeing to abandon any other grounds of appeal insofar as they did not relate to the proportionality of the fine.
Special circumstances according to ACM
It follows from the judgment that the ACM was willing to lower the fine to an amount of €10.000 for the following reasons:
The ACM also agreed to withdraw its grounds of (counter) appeal.
As a result, the CBb only had to rule about the proportionality of the fine under the given circumstances. Taking into account the circumstances described above and the fact that the fine of €10.000 as proposed by the ACM, has not been contested by the appellant, CBb comes to the conclusion that this is an appropriate fine. The CBb annuls the judgment under appeal insofar as it imposed a fine of €1.000.000 on the applicant and lowers that amount to €10.000.
Although this case at first sight might seem to be a straight forward inability to pay-case, we believe there are some interesting aspects to be flagged:
Please note that since several legal proceedings are still pending regarding the same cartel, including the publication of the ACM’s decisions, no further information about the cartel itself is yet published.
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 In contrast to the old regime, under the new regime in the Netherlands, you have to pay your fine within 6 weeks. Have you objected to the fine or filed a direct appeal with the court? If so, payment must be completed within 24 weeks after the fining decision was sent. If ACM hands down a decision on your appeal before the 24-week period has passed, payment of the fine must be completed on the day that the decision is sent to you. See link for more information about how to pay fines in the Netherlands.
 Although the total amount of fines the ACM had to pay back in 2019 was €45.571.087 (link to annual report 2019). An amount of €990.000, therefore does not seem have a high impact on the state treasury. Please note that the amount of fines the ACM has to pay back is quite high partly due to a new regime within the Netherlands as described in footnote 1.