i Legal framework
In the Netherlands, the statutory framework with respect to abuse of dominance consists of two articles in the Dutch Competition Act (DCA). The prohibition on abuse of dominance is laid down in Article 24 of the DCA, which has been modelled after Article 102 of the Treaty on the Functioning of the European Union (TFEU). Article 25 of the DCA provides for the possibility of an exemption from the application of Article 24 of the DCA in respect of undertakings entrusted with the operation of services of general economic interest (insofar as the application of Article 24 of the DCA would obstruct such operation), and thus substantively resembles Article 106(2) of the TFEU.2
The legislature expressly intended for the decision practice of the European Commission (the Commission) and the case law of the EU courts to govern the application of Articles 24 and 25 of the DCA.3 Further, the legislature has indicated that the DCA should be neither more nor less lenient than the EU competition rules.4
The examples of such abuses that are listed in Article 102 of the TFEU are not listed in Article 24 of the DCA, but can be found almost verbatim in the explanatory memorandum to the DCA.5
Insofar as public or state-owned enterprises operate as 'undertakings' within the meaning of the DCA, they are bound by the same rules as private enterprises.6 As of 1 July 2012, the DCA has been supplemented with certain special rules applicable to public enterprises, but these do not specifically relate to abuse of dominance.7
Finally, there is special regulation comprising rules on market power in respect of the telecommunications sector (telephone and internet services),8 the electricity and gas sectors, the postal sector and the transportation sector. These regimes are all supervised by the Authority for Consumers and Markets (ACM) as well. For the healthcare sector, pursuant to the Healthcare Market Regulation Act, the Dutch Healthcare Authority is tasked with supervision of healthcare companies with 'significant market power'.9 A bill to transfer this supervisory task to the ACM is currently pending.10
ii Enforcement practice and policy
The Netherlands ranks among the countries with the lowest number of abuse of dominance interventions (i.e., decisions by the national competition authority establishing an infringement). That is the conclusion of a study by economic research organisation SEO, commissioned by the Dutch Ministry of Economic Affairs and presented in 2012 (the SEO study).11 In the study period from 2005 to 2009, only one out of 18 investigations relating to abuse of a dominant position resulted in an intervention, and that intervention was eventually overturned in a court review.12
The aforementioned study sought to explain the relatively low enforcement rate of abuse of dominance cases in the Netherlands, but failed to arrive at any conclusive observations;13 however, it is probably linked to the prioritisation policy of the ACM, and its predecessor, the NMa,14 before that, in combination with the ACM's historically strong focus on cartel enforcement. The ACM is not obliged to investigate every suspected infringement or complaint: it sets its priorities on the basis of economic significance, consumer interest, severity of the infringement and likely efficiency of an intervention.15 Demonstrating harm is generally less expensive in the case of a cartel than it is for an abuse case, as the latter would normally require an analysis as to the (potential) effects on competition, and is thus likely to involve more resources. Moreover, as the ACM has pointed out itself in an official reaction to the SEO study,16 because of the leniency programme (which is not applicable to unilateral conduct), cartel cases are generally easier to prove than abuse cases. When its resources have to be allocated between cartels and an abuse of dominance case, the ACM, therefore, apparently prefers to pursue the former. Finally, the ACM has suggested that the relatively elaborate special regulation in respect of sectors operated by former state monopolies has rendered the generic abuse of dominance framework less relevant in the Netherlands.17
The case law in the Netherlands has been too fragmented to be able to deduce any clear trends apart from a high standard of proof for the claimant, which is often not met in civil litigation cases. Both the ACM and the courts in the Netherlands try to adhere closely to the Commission's and EU courts' application of the concept of abuse of dominance, and have been following the Commission's lead in emphasising the importance of an effects-based analysis and attaching great value to economic evidence in abuse cases.
II YEAR IN REVIEW
As previously explained, there are generally very few abuse of dominance interventions in the Netherlands. In 2019, the ACM took no decisions on abuse.
In 2018, the ACM carried out a market study on app stores, and researched the ability of Apple and Google, as owners of the app store platforms, to influence the supply of apps. The market study resulted in the opening of a formal investigation into Apple at the beginning of 2019. The ACM received complaints during the market study about Apple favouring its own apps over those of external app providers, especially those providing Dutch news apps.
Further, the ACM opened a case against pharmaceutical company Leadiant in 2018. It had received a complaint about the allegedly excessive price of Leadiant's medicine, chenodeoxycholic acid, which is a drug used against the rare autosomal recessive lipid storage disease cerebrotendinous xanthomatosis. The investigation is still ongoing, and no final decision has been reached yet.
There is also generally very little private enforcement of the prohibition on abuse of dominance in the Netherlands. The above-mentioned SEO study, for example, found that there have been only 42 court cases that featured a claim of abuse of dominance in the five-year study period of 2005 to 2009 (claims that, in most cases, only served as an ancillary argument), none of which led to an actual finding of infringement of the abuse of dominance prohibition.18 This trend has not changed in the past 10 years. In 2019, most private enforcement cases concerned the refusal to supply, often after a contractual relationship of supply or when negotiations of FRAND terms for a licence did not succeed.
III MARKET DEFINITION AND MARKET POWER
In the Netherlands, the concepts of market definition and market power are applied in a manner that is substantially similar to the approach of the Commission and the EU courts; therefore, see the European Union chapter for more detailed information on European practice.
i Market definition
As to market definition, the ACM and the courts tend to follow the principles embodied in the Commission's Notice on the definition of the relevant market and the standard jurisprudence of the EU courts.19
ii Market power
The definition of dominance is provided in Article 1(i) of the DCA and is modelled on the definition commonly applied in the EU, and as coined by the European Court of Justice (ECJ) in the United Brands case:
a position of one or more undertakings which enables them to prevent effective competition being maintained on the Dutch market or a part thereof, by giving them the power to behave to an appreciable extent independently of their competitors, their suppliers, their customers or end-users.20
The methodologies and standards of proof employed in practice in determining whether a market position fits this definition of dominance also closely follow European practice. Market shares are considered an important indicator, although not decisive on their own. Additional factors have been taken into account, such as the existence of intellectual property rights, the level of concentration of the market and barriers to entry.21 In its 2017 ruling, the District Court of Amsterdam relied on the advice of three appointed experts for its conclusion that online real estate platform Funda held a dominant position on the online housing market in the Netherlands. According to the experts, the combination of Funda's strong position and the significant entry barriers to the Dutch online housing market enabled Funda to behave independently.22
The ACM and the courts will normally also look for contraindications, such as countervailing power, when determining dominance.
As with the concepts of market definition and market power, the ACM and the courts tend to closely follow the case law of the Commission and EU courts on the concept of abuse. There are no substantive areas in which Dutch practice may be said to clearly deviate from European practice. Still, over the years, some noteworthy decisions have been handed down with respect to the various types of abuse within the abuse of dominance spectrum itemised below.
ii Exclusionary abuses
The ACM concluded its first predatory pricing case in a tender procedure in 2017 with the imposition of a €41 million fine on Dutch Railways (NS) for abuse of dominance in a regional tender process.23 According to the ACM, NS wanted to prevent its competitors from winning the tender at all costs, as the tender process served as a pilot for a further decentralisation of the main railway network. NS was found to have abused its dominant position on the main railway network in two ways. First by submitting a loss-making bid for a public transport contract in the Dutch province of Limburg, and second, by a combination of exclusionary conduct (see below for details). In respect of the exclusionary pricing, instead of an ex post comparison of actual costs and actual revenue, the ACM had to use an ex ante approach to determine predation because the case related to a bid for a concession that was ultimately not awarded to NS. The ACM compared NS's internal rate of return (IRR) when performing the concession with its weighted average costs of capital (WACC), and concluded that the IRR would be lower than the WACC. As a result, the concession's expected revenue would be insufficient to recover the anticipated costs. According to the ACM, this made it impossible for as-efficient competitors to match or outbid the NS bid without incurring loss. NS has appealed the decision before the Rotterdam District Court, which annulled the ACM's decision. According to the judge, the ACM did not prove the existence of dominance on the main railway network for which it has a concession until 2024. The judge also found that the relationship between the market for the exploitation of the main railway network and the adjacent regional market in Limburg on which the presumed abuse took place was not strong enough.24
The Sandd case provides another good example of the ACM's policy views with respect to exclusionary (predatory) pricing. In May 2012, the ACM confirmed its 2009 decision that formerly public postal service monopolist PostNL (formerly TNT Post) did not abuse its position on the Dutch postal service market, thereby rejecting a complaint by PostNL's competitor Sandd.25 Sandd had claimed, inter alia, that the 'free' use of PostNL's network by its 'price fighting' subsidiary Netwerk VSP distorted competition on the Dutch postal (addressed mail) market. Sandd argued that the predation assessment should consist in comparing Netwerk VSP's prices and costs, whereby the remuneration paid by Netwerk VSP for the use of PostNL's network should be considered costs of Netwerk VSP. The ACM rejected that argument, as it held that PostNL constituted an 'economic unit' with its subsidiary. Given that the average prices charged for the addressed mail service of Netwerk VSP was above the long-run average incremental costs (LRAIC) of PostNL (including Netwerk VSP) the ACM concluded – in line with the Commission's guidance on abusive exclusionary conduct – that there was no evidence of abusive pricing, and rejected Sandd's complaint.26 The District Court of Rotterdam upheld the ACM's decision in administrative appeal. The Court dismissed Sandd's argument that the LRAIC was not an appropriate test to determine abuse in the postal market, as it is based on a comparison with an 'equally efficient competitor'. Sandd argued that new entrants to the postal market obviously cannot operate as efficiently as the former monopolist. However, the Court considered that the ACM was right to make such a comparison, as otherwise a less efficient competitor would be able to force a dominant company to raise its prices to the detriment of the end user merely because it is less efficient.27
In the CR-Delta case, the ACM held, inter alia, that certain rebates granted by the (dominant) Dutch 'cattle improvement cooperative' on its insemination services were of a loyalty-inducing nature and, therefore, anticompetitive. This view was later confirmed by the District Court of Rotterdam.28 However, the Trade and Industry Appeals Tribunal (CBb), the highest administrative court in cases on appeal of decisions from the ACM, ruled (in 2010) that despite the obvious loyalty-inducing aim of the rebates, the ACM should have examined whether the rebates were capable of having anticompetitive effects before concluding that the rebates were illegal (referring to the Tomra jurisprudence of the ECJ). According to the CBb, the rebates were not capable of having these effects, as the rebates only accounted for a very small (merely 'symbolic') part of the total costs. Moreover, according to the CBb, competitors were able to (profitably) match the prices charged by CR-Delta, which according to the CBb clearly indicates the absence of any exclusionary effects of the rebates. For these reasons, the CBb overturned the decision of the ACM.
Other exclusionary acts
In early 2011, the ACM ruled that GasTerra, a Dutch company active in the trade and supply of natural gas, had used supply conditions in its contracts with energy distributors in the Netherlands that discouraged these distributors from combining their offer with gas obtained from other wholesale suppliers, thereby impeding the creation of competition in the wholesale gas market. However, on administrative appeal, the ACM became convinced that the lack of differentiation on the distributors' side was attributable to a number of other factors as well. For example, after the market had been liberalised, it simply took quite a while before alternatives to GasTerra's products and services became available. In addition, there may have been practical and legal obstacles to the introduction of contracts that would offer energy companies more freedom. The ACM therefore arrived at the conclusion that it could not be established that GasTerra had abused its dominant position.29
Over the past 15 years, the ACM has performed only two in-depth investigations focused on alleged tying. In one of those cases, KPN, the former state monopolist in telecommunications, filed a complaint against four major cable television companies for alleged abuse of their (regional) dominant position by, inter alia, tying their analogue packages to their digital packages. The ACM dismissed the complaint because it found that the analogue and digital packages were part of one and the same market, and, therefore, there could be no case of tying.30
Refusal to deal
On the subject of refusal to deal, NVM v. HPC confirms that the Dutch courts closely follow the Bronner criteria in their assessment of such cases. In June 2012, the Amsterdam Court of Appeal handed down a decision in a case between the Dutch Association of Real Estate Agents (NVM) and the (bankruptcy trustee of) software company HPC. HPC submitted that the NVM had illegally refused access to technical specifications necessary for third-party software packages to interface with a widely used software system supplied by the NVM. The Court first considered that the case law of the EU courts should be 'guiding' in applying Article 24 of the DCA. It then proceeded to assess the cumulative criteria of Bronner31 to determine whether the alleged (constructive) refusal to deal should be held abusive. It ruled that HPC had not been able to convincingly demonstrate that all competition had been eliminated by the NVM's alleged refusal; and that having access to the specifications was the only way of building a market presence in view of, inter alia, the fact that HPC had been active on the market with a market share of about 20 per cent. It, therefore, rejected the abuse of dominance claim.32 The Dutch Supreme Court upheld the Court of Appeal's ruling and, referring to EU case law, rejected the plaintiff's argument that not all competition will need to be eliminated for it to constitute abuse.33 According to the Supreme Court, the Court of Appeal rightly deduced that competition by HPC, and thus competition on the market, was not completely eliminated by the NVM's behaviour, given HPC's 20 per cent market share.
In the 2017 case against the Dutch Railways, the ACM not only decided that NS was guilty of predatory pricing, but also of exclusionary measures aimed at putting competitors at a disadvantage. The conduct consisted of providing delayed and incomplete responses to competitors' access requests to certain services and facilities owned by NS, using confidential information obtained from a former director of one of its competitors and passing on that confidential information about its competitors to its subsidiary, which participated in the tender process. As indicated above, the District Court of the Rotterdam District annulled the decision of the ACM, because dominance was not proven; the judges did not rule on the question of whether the behaviour constituted an abuse.34
Refusal to license and FRAND
On the subject of refusal to license, there is an interesting body of case law in which different Dutch courts have applied the relevant EU concepts differently. It concerns a long-standing dispute between the largest Dutch daily, De Telegraaf, and the National Broadcasting Organisation (NOS) together with the public broadcasting organisations that the NOS represents. De Telegraaf claimed, in a complaint to the ACM in 2001, that the refusal of the broadcasters to provide De Telegraaf with television programming schedules for use in a weekly television guide amounted to an abuse of a dominant position. The ACM sided with De Telegraaf, and the decision was subsequently confirmed by the District Court of Rotterdam.35
In the parallel civil (summary) proceedings initiated by NOS and public broadcasters against De Telegraaf and relating to the same subject matter, the courts, all the way up to the Supreme Court, arrived at the same conclusion: they found that NOS abused its dominant position by refusing to supply the programming schedules.36 With respect to the argument raised by the broadcasters before the Supreme Court that the Court of Appeals had not properly considered whether the weekly guide of De Telegraaf would satisfy the 'new product' criterion of the Magill case, the Supreme Court responded that the Court of Appeals had done enough by establishing that there would be a certain demand for the De Telegraaf weekly guide.37
However, after this Supreme Court decision in the civil suit, the CBb overturned the ACM's decision and the District Court's ruling in the administrative proceedings. With reference to, in particular, the criteria set out in the IMS Health decision that had just been handed down by the ECJ,38 it held that De Telegraaf 's weekly television guide should not be considered a 'new product' (there were already weekly television guides on the market, published by various broadcasting organisations), and that the refusal by NOS, therefore, did not prevent the introduction of a 'new product'.39 The preliminary relief judge of the District Court of Amsterdam arrived at a similar conclusion in a similar case in 2005, between commercial broadcaster SBS and publisher Quote Media.40
Perhaps the different rulings of the CBb and the Supreme Court in the case of De Telegraaf v. NOS could be explained by the fact that, unlike in the Magill case, the 'new product' criterion was clearly presented as a cumulative criterion in IMS Health, which was issued only after the Supreme Court's decision but before the CBb's decision. However, it still remains doubtful whether, in view of Magill alone, the Supreme Court was right to endorse the lack of a more specific assessment of the new product criterion by the Court of Appeals and consider it satisfied by referring to the existence of a demand for the product.
In 2019, the Court of Appeal of The Hague ruled several times on the refusal to license a standard essential patent (SEP) on fair, reasonable and non-discriminatory (FRAND) terms.41 In those cases, the Court applied the framework the ECJ developed in the Huawei/ZTE case on the abuse of a dominant position in relation to a SEP.42 That framework gives guidance as to the steps to be taken by the SEP owner and the party requesting a licence in concluding a FRAND licence. In two proceedings brought by Philips as the owner of several SEPs, Philips claimed that the other party was infringing its SEPs. In defence, the alleged infringer raised a FRAND defence by arguing that it wanted to conclude a licence agreement, but that the offer made by Philips was not FRAND. According to the Court of Appeal of The Hague, the Huawei/ZTE framework does not imply that the owner of the SEP needs to substantiate why its offer to license the SEP is FRAND. Therefore, it does not need, for example, to disclose licence agreements concluded with other licensees to demonstrate that its offer was non-discriminatory. Instead, it is up to the party requesting the licence to prove that the offer that is made is not FRAND. This outcome of the Dutch cases is in contrast to the manner in which German courts apply the Huawei/ZTE-criteria.
In March 2018, the District Court of Amsterdam dismissed the claim by real estate association VBO that online real estate platform Funda provided preferential treatment to real estate association NVM, co-founder and indirect shareholder of Funda, in terms of, inter alia, costs and ranking on its website. The District Court first underlined that applying dissimilar conditions to equivalent transactions with other trading parties only qualifies as abuse if it thereby places them at a competitive disadvantage. As a result, for conduct to qualify as abuse there must be a finding not only that the dominant company's conduct is discriminatory, but also that the dominant company's conduct tends, having regard to the whole of the circumstances of a case, to lead to a distortion of competition between business partners. In this context it is particularly necessary to examine whether the discrimination is likely to have a negative effect on the ability of trading partners that are disfavoured to exert competitive pressure on trading partners that are favoured. The District Court found that VBO had failed to demonstrate that the discrimination tended to distort its competitive position. As a result, the Court concluded that it could not be established that Funda had abused its dominant position.
In May 2012, the CBb confirmed an earlier dismissal by the ACM of a complaint by Fresh FM, a Dutch radio broadcaster, against Buma, the Dutch collecting society for composers and music publishers.43 Fresh FM claimed that Buma had abused its dominant position by discriminating between regional commercial radio broadcasters and other broadcasters in terms of tariffs charged, as well as by charging excessively high tariffs to these commercial regional broadcasters. The ACM provisionally investigated the potential exclusionary effects of the alleged discriminatory pricing. It concluded that Buma clearly had no incentive to exclude Fresh FM or any commercial stations from the market, as these parties operated as Buma's customers (just as much as other broadcasters). The ACM also investigated whether the tariffs were potentially excessive. Based on an international price comparison it decided that they were not. The ACM thus rejected Fresh FM's complaint, and reconfirmed its dismissal in administrative appeal.44 On ultimate appeal to the court, the CBb upheld the ACM's decision, as – in short – Fresh FM had not submitted (sufficient) evidence contradicting the ACM's findings. The CBb emphasised that to consider a certain behaviour abusive, while it is not necessary to demonstrate actual effects, the claimant at least needs to show that the targeted conduct tends to restrict competition or that the conduct is capable of having that effect. Fresh FM had not done this. This approach, which is consistent with the Tomra jurisprudence of the General Court and the European Court of Justice,45 had already been propagated by the CBb in its decision in the CR-Delta case in 2010.46
iv Exploitative abuses
The most high-profile investigation of the ACM involving, inter alia, excessive pricing has been the Interpay case. In this case, the ACM investigated whether Interpay had abused its dominant position on the market for network services for PIN transactions in the Netherlands by charging excessive tariffs to its customers (retailers). Interpay was the only supplier on that market.47
To determine whether Interpay's conditions were excessive, the ACM proceeded to assess Interpay's 'return on invested capital' between 1998 and 2001. It compared this return to a benchmark return on Interpay's equity and borrowed capital. The ACM concluded that the return made by Interpay between 1998 and 2001 was five to seven times higher than the calculated benchmark return. According to the ACM, this result was disproportionate. The ACM, therefore, concluded that the tariffs employed by Interpay amounted to an abuse of a dominant position.48
In administrative review, the banks (the shareholders in Interpay) heavily challenged the calculation method of the ACM, supported by economists. One of the main arguments was that the ACM had failed to appreciate the fact that the banks had been investing in the 'PIN project' for many years prior to the period that the ACM had used for its return on investment calculation. Accordingly, the ACM had failed to take into account a large amount of costs (that would have substantially lowered the calculated return on investment).49
Further, the banks argued that by only basing its judgment on the return comparison, the ACM fell short of the requirements pursuant to EU (case) law, which prescribes that while an international price comparison is not required, in any event there has to be a direct assessment of the level of the prices itself.50
The ACM's standing advisory committee in review proceedings agreed with the banks on these points. Subsequently, the ACM, it its decision in administrative review, referencing that it was 'too much work and too expensive to carry out the research for further investigation', withdrew the part of the fine that was based on abuse of dominance.51
In December 2014, the ACM closed its investigation into possible abuse of dominance by pharmaceutical manufacturer AstraZeneca. In December 2011, the ACM sent a statement of objections to AstraZeneca, suspecting it of having abused a dominant position by charging considerably higher prices for its heartburn drug Nexium sold for use outside hospitals (extramural) than when sold inside hospitals (intramural). As a result of the 'hospital-influence effect' – patients tend to continue using the same drug that they have been administered by their hospitals, and physicians are inclined to prescribe the same drug – AstraZeneca allegedly faced little competition with regard to patients that had first been put on Nexium while hospitalised, and could thus offset the losses incurred by offering Nexium to hospitals at a deep discount with higher extramural prices. The ACM concluded, however, that AstraZeneca had not violated the prohibition on abuse of dominance because it could not be sufficiently determined that AstraZeneca had indeed held a dominant position. In its decision, the ACM distinguished an intramural market and an extramural market consisting of users who, as a result of the hospital-influence effects, should be considered captive to Nexium. AstraZeneca did not have a dominant position on the intramural market since it held a market share of less than 40 per cent. Regarding the extramural market, AstraZeneca's arguments regarding substitution, therapeutic effectiveness and switching behaviour had raised reasonable doubts as to whether a group of Nexium users would indeed be bound to Nexium through the hospital-influence effect on such a scale that, with regard to this group, AstraZeneca was able to behave independently of its competitors. In April 2014, the ACM published a commitment decision relating to a possible abuse of a dominant position.
In February 2018, the Rotterdam District Court ruled on excessive pricing in a private enforcement case against Videma.52 Videma is a collecting society that issues licences for TV transmission in hotels, hospitals, pubs, healthcare institutions, etc. As a collecting society it has a dominant position.53 Hospitals had to pay royalties to Videma for TV transmission within the hospitals and claimed that the royalties were excessively high, and, therefore, abusive. The Court appointed copyrights experts of the Consumer Complaints Boards as expert witnesses to answer questions relating to the royalty rates. A reliable international benchmark was not available, since in many EU Member States, hospitals do not pay royalties for TV transmission, and, in countries where royalties were paid, the bundle and number of TV channels were not comparable. The experts concluded that the royalties had increased excessively and that Videma was not able to give an objective justification for the increase. Therefore, the Court held that Videma abused its dominant position and referred the case to a follow-up proceeding for the determination of damages.
V REMEDIES AND SANCTIONS
The DCA and the laws underlying the various sectoral regimes supervised by the ACM comprise the basis for the ACM to issue fines for infringements of the rules set out in the respective acts, including Article 24 DCA.54 The fines are administrative, and not criminal, in nature, although the procedural rules that have been applicable to the imposition of fines since 1 July 2009 do take into account the fact that administrative fines are considered a 'criminal charge' in the meaning of Article 6 of the European Convention on Human Rights.55
In addition to the statutory law, the ACM relies on a policy rule concerning the determination of fines: the 2014 ACM Fining Policy Rule issued by the Ministry of Economic Affairs.56 The fine calculation method applicable to infringements of the cartel prohibition and the abuse of dominance prohibition that follows from these guidelines resembles the EU approach (as laid down in the fining guidelines of the Commission)57 in several respects, but not entirely. According to the Fining Policy Rule, the basic fine is calculated as a percentage (of zero to 50 per cent) of a company's turnover during the last full year of the infringement multiplied by the number of years and months the infringement lasted. In setting the fine, the ACM will take account of aggravating or mitigating factors. Fines may reach up to a maximum of €900,000 or, if greater, 10 per cent of the worldwide annual turnover of the undertaking concerned.
The ACM may impose an order subject to periodic penalty payments; for example, when undertakings fail to cooperate during the investigation process. Such an order may also be imposed in the form of a structural measure, as referred to in Article 7 of Regulation 1/2003, if that measure is proportionate to the violation committed and is necessary to actually end the violation.58
The ACM can also fine individuals up to €900,000. Such fines can be imposed if it is established that these persons have expressly ordered the abuse to be committed or, alternatively, have failed to take adequate preventive measures, and by doing so deliberately accepted the risk that the abuse would be committed.59
i Investigation and sanctioning phase
The ACM may examine infringements of Article 24 ex officio or on the basis of a complaint. The ACM will apply its prioritisation policy in deciding whether to pursue a case (see Section I).
There is no fixed time limit for an investigation. It may take months, but will usually take longer. The investigation is carried out by a case team at the ACM Competition Directorate. If an infringement is established and it is subsequently decided to pursue the case, a report will be issued. This type of document is similar to a statement of objections. The addressed undertaking (and other interested parties, such as complainants) will have the opportunity to present its views on the allegations in the report, in writing and at an oral hearing.60 The legal department of the ACM presides at the oral hearing. The department acts partly as an internal review body 'independent' of the case team of the Competition Directorate. It has no involvement with the investigation and the drafting of the report, and is tasked with the preparation of the decision subsequent to the oral hearing. Ultimately, however, the board of the ACM decides whether to issue a (fining) decision.
The stage from the launch of the investigation until the issuance of a decision (establishing an infringement) can take a long time in the Netherlands. The duration is rarely less than a year.
Decisions of the ACM may first be submitted to administrative review before an 'independent' administrative review committee (administrative review), which will render an opinion to the ACM. The subsequent (renewed) decision of the ACM may be appealed to the District Court of Rotterdam. Ultimate appeal lies with the CBb. Parties may agree with the ACM to directly appeal the ACM's decision before the District Court so that there is no need to follow the administrative review procedure.
Because of the elaborate appeal procedure in the Netherlands, as described above, it often takes a very long time (i.e., more than three years) from the date of a decision of the ACM until the date of a decision of the appellate court, the CBb.
iii Informal guidance
There are no formal procedures for obtaining guidance on individual cases. It is possible to informally sound out the opinion of the ACM (e.g., in a meeting). Sometimes the ACM publishes such guidance in an informal guidance letter. To date, these have been limited to merger control cases and cases relating to the possible application of individual exemptions of the cartel prohibition. It is not inconceivable that the ACM will also hand out an informal guidance letter in abuse cases.
VII PRIVATE ENFORCEMENT
Third parties can base an action for damages or injunctions before the civil courts directly on Article 24 of the DCA (as with Article 102 of the TFEU).61 So far, there is no specific regime for enforcement of national competition law infringements. The Dutch Act implementing the EU Damages Directive62 entered into force on 10 February 2017, and only applies to cases where there is a breach of EU competition law.63
A consultation on a bill to also apply these provisions to civil damages actions in cases solely featuring infringements of domestic competition law was closed in November 2017.64 For now, general Dutch tort law applies to such actions. Pursuant to Dutch tort law, claimed damages can only be compensatory in nature: there is no such thing as punitive or 'treble' damages in the Netherlands.
The EMS v. Equens ruling by the District Court of Central Netherlands is one of the rare cases in which damages were actually awarded for an infringement of the prohibition on abuse of dominance. In this case, the District Court of Central Netherlands ruled that Equens abused its dominant position in the market for network services for credit card transactions by making it more difficult for customers to switch to acquirers other than its own subsidiary, PaySquare.65 The case was brought before the court by European Merchant Services (EMS), a customer of Equens and a competitor of PaySquare. The Court first established the dominance of Equens on the market for network services for payment transactions by considering that customers could not easily switch networks, since 70 per cent of the payment terminals used by customers were based on a protocol managed by Equens. The Court subsequently ruled that Equens had abused its dominant position by introducing a 'queue procedure', pursuant to which customers could only switch to another acquirer with PaySquare's assistance. PaySquare would subsequently use the time it would take to disconnect the customer's payment terminal to make a counter offer, and as a result, the switch was often prevented or delayed. The Court thereupon ruled, however, that Equens would have to pay EMS only €77,000 in damages, based on lost profits.66
Private enforcement of Article 24 of the DCA is attempted relatively frequently in the Netherlands, but these attempts are mostly unsuccessful. Claimants often fail to meet the evidentiary thresholds. As explained above, Dutch courts tend to follow EU practice and trends, and therefore attach considerable weight to economic evidence. Claimants only rarely make the effort of building a convincing economic narrative to support a claim of abuse of dominance.
VIII FUTURE DEVELOPMENTS
Before the covid-19 outbreak in the Netherlands, the ACM stated that the digital economy and energy transition are its main priorities for 2020–2021.
The ACM will, therefore, likely be focusing on potential unfair trading practices and other abuse types in the online sector in the near future especially with regard to online platforms and tech companies entering the payments market. Next to that, the ACM will likely focus on the investments required by network operators in the electricity network in order to make the energy transition; underinvestment has in the past led to abuse of dominance cases.
After the covid-19 outbreak in the Netherlands in the first quarter of 2020, the ACM also started to look at competition law issues relating to the economic consequences of that outbreak. More specifically with regard to abuse of dominance, the ACM already looked into a case of possible, alleged abuse regarding refusal to supply. In the Netherlands, there was a shortage in testing capacity for the virus. One of the bottlenecks concerned insufficient capacity in the production of a lysis buffer, which is used during the tests. In the Netherlands, most testing machines were supplied by La Roche, and it supplied the required lysis buffer as well. In the media, it was reported that La Roche could not supply sufficient lysis buffer but was also not willing to share its recipe of the lysis buffer in order for Dutch labs to produce the required additional lysis buffer. The ACM contacted La Roche and various of its customers and concluded that La Roche has an important position on the Dutch market for testing machines and materials; no conclusion was drawn regarding possible dominance. La Roche offered the commitment to share the lysis buffer recipe with the Dutch government and under the direction of the government it would cooperate with Dutch parties to increase production.67
1 Bart de Rijke is a partner at De Brauw Blackstone Westbroek NV.
2 Although such an exemption has to be applied for and granted by the ACM to take effect under Article 25 of the DCA; this exemption may also be requested once a procedure inquiring a possible breach has been started.
3 Explanatory Memorandum to the Dutch Competition Act, No. 24 707, p. 71.
6 See, for example, the decision of the Dutch Competition Authority, the NMa, of 12 September 2002 in case No. 2493 (Vereniging Eigen Huis v. Gemeente Amsterdam), in which the municipality of Amsterdam was held to be an undertaking insofar as it was involved in the sale of land.
7 'NMa to monitor market law and government', see www.acm.nl/nl/publicaties/publicatie/10776/NMa-start-toezicht-Wet-Markt-en-Overheid/. A transitional exemption period of two years applies with respect to activities already started at the moment this legislation came into force.
8 The ACM decided that the two telecom incumbents Vodafone Ziggo and KPN had collective significant market power (SMP) in order to regulate access to their networks. On appeal, the Trade and Industry Appeals Tribunal applied the Airtours criteria and came to the conclusion that there was no collective SMP; decision of 17 March 2020, ECLI:NL:CBB:2020:177 (Vodafone Ziggo and KPN/ACM).
10 Amendment of the Healthcare Market Regulation Act and other laws in connection with adjustments to tariff and performance regulation and market surveillance in the field of healthcare, Parliamentary paper 34445.
11 The study is available (in English) at www.seo.nl/uploads/media/2011-63_An_international_comparison_of_the_abuse-of-dominance.pdf.
12 Case No. 3353, decision of the NMa of 6 March 2008; and the decision of the Trade and Industry Appeals Tribunal of 7 October 2010, AWB 07/596, LJN: BN9947 (CR-Delta).
13 The study mentions that the following hypotheses could not be proven: (1) differences in the tools and resources available to the five competition authorities and their deterrent effects; (2) whether Dutch firms have violated the abuse of dominance provision to a lesser extent, as compared to other jurisdictions; and (3) the explanation that the NMa chose to intervene in few abuse of dominance cases in the period studied, or resolved a relatively high number of cases informally.
14 The ACM is the result of a 2013 merger of three previously independent authorities: the Dutch competition authority, the NMa, the postal and telecoms authority and the consumer authority.
15 Prioritisation policy of the ACM, available (in Dutch), Stcrt.2016 No. 14564 of 18 March 2016.
16 Reaction of the ACM to the SEO study, available (in Dutch) at www.eerstekamer.nl/overig/20121123/brief_van_de_nma/document.
17 ibid., Paragraph 3.
18 SEO study, p. 15.
19 Commission Notice on the definition of relevant market for the purposes of Community competition law  OJ C 372/5.
20 European Court of Justice 14 February 1978, case C-27/76 (United Brands v. Commission).
21 This also follows from the Explanatory Memorandum to the Dutch Competition Act, No. 24 707, p. 25.
22 Decision of the District Court of Amsterdam of 21 March 2018, ECLI:NL:RBAMS:2018:1654.
23 Case No. 16.0691.31, decision of the ACM of 22 May 2017.
24 Decision of the District Court of Rotterdam of 27 June 2019, ECLI:NL:RBROT:2019:5089 (NS/ACM).
25 Case No. 6207, decision of the NMa of 21 May 2012.
26 See Paragraph 67 of the Commission's Guidance on enforcement priorities in applying Article 82 of the EC Treaty to abusive exclusionary conduct by dominant undertakings  OJ C 45/7.
27 Decision of the District Court of Rotterdam of 26 September 2013, ECLI:NL:RBROT:2013:7337.
28 Decision of the Trade and Industry Appeal Tribunal of 7 October 2010, AWB 07/596, LJN: BN9947 (CR-Delta).
29 Case No. 4296_1, decisions of the NMa of 5 January 2011 (213), 21 January 2011 (197) and the decision on appeal of the NMa of 30 June 2011 (214) (GasTerra).
30 Case No. 5702, decision of the NMa of 20 July 2007 (207).
31 European Court of Justice 26 November 1998, case C-7/97 (Bronner).
32 Decision of the Amsterdam Court of Appeals of 12 June 2012, case No. 200.018.917, LJN: BX0460.
33 Decision of the Dutch Supreme Court of 24 January 2014, ECLI:NL:HR:2014:149.
34 Decision of the District Court of Rotterdam of 27 June 2019, ECLI:NL:RBROT:2019:5089 (NS/ACM).
35 Case No. 501.o119, decision of the NMa of 3 October 2001 and decision of the District Court of Rotterdam of 22 June 2000, case No. VMEDED 00/0903-SIMO; VMEDED 00/1187-SIMO, LJN: ZF1130.
36 Decision of the President of the District Court of 's-Gravenhage of 5 January 1999, KG 98/1539, LJN: BM3036; decision of the Court of Appeal of 's-Gravenhage of 30 January 2001, 99/1.65, LJN: AA9717; and decision of the Supreme Court of 6 June 2003, C01/183HR, LJN: AF5100.
37 Decision of the Supreme Court of 6 June 2003, C01/183HR, LJN: AF5100, Paragraph 3.11.
38 European Court of Justice 29 April 2004, case C-418/01 (IMS Health).
39 Decision of the Trade and Industry Appeal Tribunal of 15 July 2004, AWB 03/132, LJN: AQ1727 (NOS v. NMa).
40 Decision of the President of the District Court of Amsterdam of 28 July 2005, case No. 317128/KG 05-1040 P, LJN: AU0253 (SBS v. Quote Media).
41 Decisions of the Court of Appeal of The Hague of 7 May 2019, ECLI:NL:GHDHA:2019:1065 (Philips/Asus); of 2 July 2019, ECLI:NL:GHDHA:2019:3613 (Philips/Wiko); of 24 December 2019, ECLI:NL:GHDHA:2019:3535 (Philips/Asus); and of 24 December 2019, ECLI:NL:GHDHA:2019:3537 (Philips/Wiko).
42 Decision of the ECJ of 16 July 2015, case C-170/13, ECLI:EU:C:2015:477, (Huawei Technologies Co. Ltd v ZTE Corp. and ZTE Deutschland GmbH).
43 Decision of the Trade and Industry Appeal Tribunal of 24 May 2012, AWB 09/1302, LJN: BW6327.
44 Case No. 3295, Decision of the NMa of 10 May 2007 (78), and decision on appeal of the NMa of 2 April 2008 (133).
45 General Court of the EU 9 September 2010, case T-155/06 (Tomra v. Commission); European Court of Justice 19 April 2012, case C-549/10P (Tomra v. Commission).
46 See footnote 27.
47 Case No. 2910, decision of the NMa of 28 April 2004 (700).
48 ibid., Paragraphs 145, 202, 219–221.
49 Case No. 2910, decision on appeal of the NMa of 21 December 2005 (864), Paragraphs 10, 12.
51 ibid., Paragraphs 15–16, 21–26.
52 Decision of the Court of Rotterdam of 21 February 2018, ECLI:NL:RBROT:2018:1037 (NVZ Vereniging van Ziekenhuizen ao v. Videma).
53 Often, collecting societies have a (de facto) monopoly in their respective geographical area; see European Court of Justice, 19 April 2018, case C-525/16 (MEO – Serviços de Comunicações e Multimédia SA v. Autoridade da Concorrência).
54 See Act establishing the Authority for Consumers and Market (2012/2013, Nos. 1 and 2, 33 186).
55 These rules, laid down in the General Administrative Law Act, comprise the 'right to remain silent' and the ne bis in idem principle.
56 Policy rule of the Minister of Economic Affairs of 4 July 2014, No. WJZ/14112617, on the imposition of administrative fines by the Netherlands Authority for Consumers and Markets. Unofficial English version available at www.acm.nl/en/publications/publication/13315/Policy-rules-regarding-fines-and-leniency/. As amended by the Policy Rule of the Minister of Economic Affairs of 28 June 2016, No. WJZ/16056097.
57 Guidelines on the method of setting fines imposed pursuant to Article 23(2)(a) of Regulation No. 1/2003, OJ C 210, 1 September 2006.
58 Dutch Competition Act, Articles 56 and 58a.
59 ACM Policy Guidelines Administrative Fines, pp. 4 and 5.
60 Article 59 of the DCA in combination with the rules laid down in Chapter 5 of the General Administrative Law Act.
61 For example, in KPN v. NL.tree (22 March 2006), the District Court of The Hague ordered KPN to withdraw internet access offers to educational institutions that were deemed to be predatory and to amount to a price squeeze. The Court also ordered KPN to desist from making abusive offers in the future.
62 Directive 2014/104/EU of the European Parliament and of the Council of 26 November 2014 on certain rules governing actions for damages under national law for infringements of the competition law provisions of the Member States and of the European Union.
63 Law of 25 January 2017, amending Book 6 of the Civil Code and the Code of Civil Procedure, in connection with the transposition of Directive 2014/104/EU of the European Parliament and of the Council of 26 November 2014 on certain rules governing actions for damages under national law for infringements of the competition law provisions of the Member States and of the European Union (Implementation of the Private Law Enforcement of Competition Law Directive), Bulletin of Acts and Decrees 2017, Vol. 28.
64 Draft regulation: Bill on amendment of the Competition Act in relation to market and government, merger control and private enforcement.
65 Decision by the Court of Central Netherlands of 10 July 2013, ECLI:NL:RBMNE:2013:3245.
66 Decision by the Court of Central Netherlands of 30 December 2013, ECLI:NL:RBMNE:2013:7536.
67 Press release of 3 April 2020 of the ACM, 'ACM heeft vertrouwen in toezeggingen Roche om problemen testmateriaal te helpen oplossen'.