Following an amendment to the Competition Act, new powers have been extended to the Netherlands Competition Authority (NMa). As of 1 October, the Authority may impose cartel fines on individuals who give instruction or exercise de facto leadership with regard to a cartel, in addition to penalising businesses. In line with this, natural persons as well as undertakings may apply for immunity or fine reduction by notifying the NMa of their involvement in a cartel (leniency). The maximum fines for infringement of merger control regulations have been raised.
New also is the use of the instrument termed a “commitment”. The NMa may specify in its decisions which commitments resulting in a change of behaviour have been agreed to by businesses, thus preventing long-winded sanctions procedures. Also, the NMa is now authorised to enter private premises in the course of forensic investigations.
The new Fining Code includes a separate methodology for fining natural persons. Whereas fines imposed on businesses are based on turnover figures, the fines imposed on natural persons will be set according to the ability-to-pay principle (taking into account personal income and assets). The NMa’s fining powers have been further extended to include fines for non-compliance with a decision on commitments. The maximum fine for failure to notify a merger or failure to meet conditions imposed on a merger has been increased from €22,500 to €450,000. If the annual turnover of an undertaking proves to be above €4.5 million, the maximum fine is 10 percent of the annual turnover.
Under the new Leniency Guidelines, natural persons as well as businesses may apply for immunity or fine reduction, provided they have themselves informed the NMa of the cartel in which they are participating or in which they have participated. It is a prerequisite that applicants contact the Leniency Office of the NMa. Also, they must provide full cooperation. In so doing, the first leniency applicant, whether it be an undertaking or natural person, may avoid a fine altogether. The threshold for informing the NMa of a cartel has been lowered. Also, lawyers may gauge whether or not their client would be able to avoid a fine by confessing a cartel. On receiving positive confirmation by the NMa, the lawyer concerned must submit a leniency application at once.
The NMa’s merger control policy has been further harmonised with European competition law. In assessing concentrations, the emphasis has shifted to whether a concentration actually restricts competition, rather than whether it creates or strengthens a dominant position. From now on, cooperative joint ventures will also be investigated, in addition to mergers and acquisitions. Also, merging parties may already propose remedies during the first phase of an NMa merger investigation in order to meet the competition concerns outlined by the Authority. Up until now, this course of action has been open to parties only after the NMa’s commencement of an in-depth (second phase) investigation. The new Remedy Guidelines 2007 will facilitate businesses in submitting a proposal that aligns with NMa requirements.
The policy guidelines implementing the new powers are available on the NMa website at www.nmanet.nl, under “Changes to NMa enforcement”.
Source: Press Release NMa, 11-10-2007 at www.nmanet.nl