Increase of Maximum Fines for Cartel Infringements in the Netherlands
Recently the Dutch legislature passed legislation which will increase the maximum fines that the Netherlands Authority for Consumers and Markets ("ACM") can impose in case of competition laws infringements. The objective of the legislation is to increase the deterrent effect and the willingness of companies to comply with the applicable competition laws. The new legislation will enter into force on 1st July 2016.
Under the current legislation, the maximum fine the ACM is able to impose is at least EUR 450,000 or 10% of the undertaking’s global annual turnover in case of a cartel infringement. Individuals with a leading role in a cartel infringement can be fined for their involvement as well. The maximum fine for individuals was set at EUR 450,000. Under the new legislation, the maximum fine for individuals increases to EUR 900,000.
The maximum fine for undertakings under the Dutch Competition Act will be raised to at least EUR 900,000 or 10% of an undertaking’s global turnover.
For cartel infringements, the maximum fine under the new legislation will depend on the duration of a cartel. If an undertaking participates in a cartel longer than two years, the maximum will be at least EUR 1,800,000 or 20% of an undertaking’s global turnover. For participation in a cartel for more than three years the maximum fine will be at least EUR 2,700,000 or 30% of an undertaking’s global turnover. For participation in a cartel for more than four years the maximum fine will be at least EUR 3,600,000 or 40% of an undertaking’s global turnover.
One would think the aggregation of the maximum would stop there, but for recidivists that have been fined for the same or similar behaviour in the last five years, the applicable maximum fine is doubled. The absolute maximum fine for an undertaking that has participated in a cartel infringement for more than four years and has been fined for the same or similar conduct in the last five years is a staggering EUR 7,200,000 or 80% of an undertaking’s global turnover if that is more than EUR 7,200,000.
An important nuance to be made is that the maximum fine the ACM can impose must be distinguished from the way in which ACM calculates the amount of the fine (the ACM fining policies). The new legislation does not change the ACM’s fining policies; it only changes the maximum fines that can be legally imposed on an undertaking or an individual. In a majority of the ACM’s cases the amount of the fine does not exceed the maximum fine that it was able to set. Therefore the consequences of the new legislation may not be as alarming as they seem.
However, in the latest cartel cases the ACM decided on, the ACM has imposed the maximum of at least EUR 450,000 on several undertakings. These cases were dealt with under the former maximum fine as the cartels took place under the former legislation.. The increased maximum fines will be applicable to any cartel infringements under the ACM’s jurisdiction that are going on whilst the new legislation has entered into force.
The new maximum fines differ substantially from the maximum fines applied by the European Commission and other national competition authorities, i.e. 10% of the undertaking’s global annual turnover. Where most national legislation tends toward convergence with the European Commission’s approach to competition law enforcement, the Netherlands have now deviated from that.
