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In the Netherlands, cartels are illegal. A cartel agreement is an agreement between competitors with the intention of hindering or restricting competition or creating false competition. In such cases, competitors agree to fix prices, share markets, limit output or boycot certain suppliers or buyers. Cartel agreements can also exist between suppliers and buyers, for example regarding the retail prices.
Cartel offense prosecution
Violating the cartel ban may result in a fine imposed by the Netherlands Authority for Consumers and Markets (Autoriteit Consument en Markt, ACM). This could amount to a maximum of 10% of your total annual turnover. ACM may also impose personal fines, which could amount to a maximum of €450,000.
If a cartel agreement limits trade among European Union Member States in general, the European Commission may impose fines as well. With regards to the Netherlands this would be the case when cartel related trade limits occur in Dutch border regions or in large parts of the country.
Reporting a cartel
If you have participated in a cartel agreement and you are the first cartel member to report this to ACM yourself (leniency request), while the alleged cartel is under investigation by ACM, you will receive total immunity from fines. If you are not the first to come forward, but nonetheless confess the cartel to ACM, your fine may be still be reduced.
If you hear a colleague make price-fixing agreements with a competitor or does a potential new supplier state that he refuses to supply in your current supplier's region, you may be witnessing a cartel agreement. You could tip off ACM (anonymously).
Exceptions to the cartel ban
There are exceptions to the cartel ban. In a number of cases, companies are permitted to make these kinds of agreements.
If an agreement contributes to economic or technical progress, it might be permitted. However, a reasonable share of benefits related to the collaboration should be for the client, the agreement should only pertain to that what is strictly necessary and there still must be room for sound competition. ACM has information about collaborative agreements in the context of sustainable entrepreneurship (fair trade) and for the health care sector specifically.
Competition agreements between small and medium businesses are allowed, if the number of participating companies is restricted to 8. Also, their joint earnings are capped. This is called 'bagatelle exemption' (bagatelvrijstelling). If a competition agreement leads to a restriction of the intercommunal trade, the bagatel exemption does not apply. In that case the European cartel rules apply, even when your joint market share does not exceed 10%.
If your joint market share less is than 5%, with a joint turnover of €40 million or less, European cartel rules do not apply.
Sector protection exemption
Sector protection agreements are permitted. A sector protection agreement is an agreement between the manager of a shopping centre and an entrepreneur with premises in that shopping centre. It protects the shopkeeper from competition from new arrivals in the shopping centre who operate in the same sector.
Cooperation agreements with regard to, among others, marketing, joint advertising or joint procurement in the retail sector are permitted as well. Finally, European law provides for exemptions for certain categories of research and development, technology transfer and specialisation agreements.
If you want to check whether you are violating the ban on cartels or not, enlist legal advice to ascertain whether your collaborative agreement complies with these conditions.