The Dominance and Monopolies Review: Netherlands
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 on 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 in respect of undertakings entrusted with the operation of services of general economic interest (insofar as the application of Article 24 would obstruct such operation), and thus substantively resembles Article 106(2) of the TFEU.2 The competition rules are enforced by the Authority for Consumers and Markets (ACM).
The legislature expressly intended for the decision practice of the European Commission (Commission) and the case law of the EU courts to be leading for the interpretation of Articles 24 and 25 of the DCA.3 Furthermore, the legislature has indicated that the DCA should be neither more nor less lenient than the EU competition rules.4
The examples of abuse of dominance that are listed in Article 102 of the TFEU are not listed in Article 24 of the DCA but can be found copied 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 Since 1 July 2012, the DCA has been supplemented with certain special rules applicable to public enterprises, but these do not specifically relate to abuses of dominance.7
Finally, there is special legislation 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 sector-specific regimes are also supervised by the ACM. 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 the economic research organisation SEO, commissioned by the Dutch Ministry of Economic Affairs and published in 2011 (SEO study).11 In the years analysed in the study (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 on appeal.12
The SEO 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 Dutch Competition Authority (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 The ACM had pointed out itself in an official reaction to the SEO study16 that because of the leniency programme (which is not applicable to unilateral conduct), cartel cases are generally easier to prove than abuse cases. Furthermore, the ACM at the time 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
In 2021, there seemed to be a break in trend: the ACM rendered two decisions in which it found an abuse of dominance. Both concerned exploitative abuses that are discussed further in this chapter. Another significant development concerns a judgment from the Trade and Industry Appeals Tribunal (CBb, the highest appellate court in the Netherlands) in a high profile ACM case that was annulled by the Court. Concomitantly, the ACM announced in its 2021 enforcement priorities that it would focus more on the enforcement of abuse of dominance cases in 2022, especially in the pharmaceutical and digital sector.
There is generally little private enforcement of the prohibition on abuse of dominance in the Netherlands. The 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 an abuse of dominance.18 The past 10 years have not seen a significant increase in civil litigation regarding abuse of dominance. The case law in the Netherlands has been too sparse and fragmented to be able to deduce any clear trends, although in general it can be concluded that the claimant faces a high burden of proof, which is often not met. Generally, 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 attach great value to economic evidence in abuse cases. However, the two abuse of dominance cases that the ACM concluded in 2021 were based on exploitative theories of harm and have in part relied on qualitative assessments of the behaviour of the dominant undertakings in question (i.e., Apple and Leadiant).
Year in review
As mentioned, until recently, there have been very few abuse of dominance interventions in the Netherlands. In 2021, however, two cases were concluded by the ACM. The first case concerned a decision regarding the pharmaceutical company Leadiant. The ACM opened this case in 2018, after it had received a complaint about the allegedly excessive price of chenodeoxycholic acid, which is a drug used against the rare autosomal recessive lipid storage disease cerebrotendinous xanthomatosis (CTX). In May 2020, the ACM decided to extend this investigation. In July 2021, a final decision was reached, under which the ACM imposed a fine of € 19,569,500 on Leadiant. This decision is discussed in more detail in Section III.iv.
Another investigation that led to a decision concerning the Apple App Store. 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. During the market study, the ACM received complaints about Apple favouring its own apps over those of external app providers, especially those providing Dutch news apps. This resulted in the ACM opening a formal investigation into Apple at the beginning of 2019. In August 2021, this investigation led to a decision in which the ACM determined that Apple abused its dominant position by setting unreasonable conditions in its App Store, meaning that dating app providers could only make use of Apple's own payment system and that the providers were not allowed to refer to other payment options outside the application. The ACM ordered Apple to adjust these unreasonable conditions in its App Store with respect to dating app providers. This decision is also discussed further in Section III.iv.
In recent years, the ACM, like many competition authorities, has shown an increasing interest in digital markets and platforms. The Apple investigation fits that pattern.
The ACM has also indicated its support for the Digital Markets Act (DMA), and has even argued – together with other European competition agencies – for more extensive rules.19 The Dutch government, together with those of Germany and France, has also pleaded for a stronger DMA.20
The ACM also referenced the usefulness of such an ex ante tool when it presented the results of a market study it carried out in 2020 into big tech and the market for payment services. Based on this market study, the ACM called on platforms and tech manufacturers such as Apple, Facebook, Amazon and Alibaba to ensure a level playing field for different providers of payment services.21
The ACM indicated in its annual report of 2021 that, throughout 2021, its focus had been on 'preventing abuse of market power in the digital economy' and 'protecting the online consumer', pointing to the Apple case and an investigation it had started into paying applications with near-field communication technology. The ACM further stated that it is actively involved in the (European) discussion about the DMA and the overall approach to regulate 'Big Tech'.
In 2021, the ACM also focused on energy transition and the pharmaceutical sector. Against this background, the ACM mentioned its approach to handling misleading claims and the protection of consumers in such transition. Regarding the pharmaceuticals sector, the ACM stated that it has closely monitored compliance with the competition rules in the sector. This resulted, inter alia, in the decision regarding Leadiant.
As mentioned above, the case law on private enforcement of the prohibition of abuse of dominance is sparse. In 2021, 12 judgments relating to allegations of abuse of dominance were rendered by the civil courts. In many of these cases, abuse of dominance was invoked as an ancillary argument, with the allegation being dismissed by the court because it was not sufficiently substantiated.
One interesting private enforcement case is the Funda case (interestingly also concerning a digital platform), which was concluded in 2021 with a ruling by the Amsterdam Court of Appeal. This ruling is discussed in more detail in Section III.iii.
Significant decisions of the ACM in 2021
|Sector||Investigating authority||Conduct||Case opened||Fine|
|Pharmaceuticals||ACM||Applying excessive prices for the long-standing drug CDCA-Leadiant||2018||€19,569,500|
|App Store||ACM||Setting unreasonable conditions for dating app providers in the App Store||April 2019||An incremental penalty of €5 million per week, with a maximum penalty of €50 million in cases of non-compliance|
There are no cases that are currently active in the Netherlands.
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; 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.22
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.23
The methodologies and standards of proof employed in practice in determining whether an undertaking has a dominant position 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.24 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.25 The ruling was upheld on appeal.26
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
In 2017, ACM imposed a fine of €41 million on Dutch Railways (NS) for abuse of dominance in a regional tender process.27 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 by submitting a loss-making bid for a public transport contract in the Dutch province of Limburg. 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. In addition to predatory pricing, the ACM also fined NS for a combination of other exclusionary conduct related to access requests to certain services and facilities owned by NS. The ACM's decision was, however, annulled on appeal. According to the Rotterdam District Court (RDC), the ACM did not prove the existence of dominance on the main railway network for which NS has a concession until 2024. In the judgment, the RDC found that the ACM had insufficiently considered the extent to which NS was restricted in exercising market power on the basis of the concession requirements and conditions that restricted NS in its pricing behaviour and required NS to achieve certain minimum quality standards. At the very least, the ACM, the RDC considered, should have included the concession conditions in its assessment to consider if the conditions themselves demonstrated market power on the side of NS (since the concession conditions were negotiated between the Dutch state and NS, the market power of NS would have to be visible in the outcome of those negotiations).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.28
On appeal, the CBb found that the ACM had indeed not demonstrated beyond a reasonable doubt that NS has a dominant position on the market for exercising the exploitation right for the main railway network. The CBb considered that the ACM did not take sufficiently into account the complex relationship between the Dutch state and NS, which are mutually interdependent, and it remained unclear whether NS would actually have been able to act to a significant extent independently in its market behaviour. The CBb, therefore – although partly based on different grounds – upheld the ruling on appeal.29
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. However, the CBb annulled the decision, ruling (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 case law of the ECJ).30 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 initially found that GasTerra, an active spin-off of the state-owned Gasunie active in the wholesale 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 on the market. Therefore, the ACM reversed its decision, arriving at the conclusion that it could not be established that GasTerra had abused its dominant position.31
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.32
Refusal to deal
On the subject of refusal to deal, the 2012 judgment of the Amsterdam Court of Appeal in NVM v. HPC confirms that the Dutch courts closely follow the Bronner criteria33 in their assessment of such cases. HPC, a software company, submitted that the Dutch Association of Real Estate Agents (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 assessed the cumulative criteria defined in Bronner and 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.34 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 needs to be eliminated for conduct to constitute abuse.35 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.
Refusal to license and fair, reasonable and non-discriminatory terms
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 newspaper, De Telegraaf, and the National Broadcasting Organisation (NOS) together with the public broadcasting organisations that the NOS represents. Following a complaint by De Telegraaf, the ACM found 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 decision was subsequently confirmed by the District Court of Rotterdam,36 and in the parallel civil (summary) proceedings initiated by the NOS and public broadcasters against De Telegraaf on the same issue, the courts, all the way up to the Supreme Court, arrived at the same conclusion. The Supreme Court held that De Telegraaf's weekly guide satisfied the 'new product' criterion of the Magill case since the Court of Appeal had established that there would be a certain demand for it.37
After this Supreme Court decision in a civil suit, the IMS Health ruling was handed down by the ECJ.38 Shortly after this, the CBb overturned the ACM's decision and the District Court's ruling in the administrative proceedings, with reference to the IMS Health decision. The CBb 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 the 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
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 v. ZTE case on abuse of a dominant position in relation to an SEP.42 In two proceedings brought by Philips, the Court of Appeal of The Hague held that the Huawei v. 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. The outcomes of the Dutch cases are in contrast to the manner in which German courts apply the Huawei v. 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 costs and ranking on its website and access to the platform's services. 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. The Amsterdam Court of Appeal confirmed the District Court's assessment in a judgment rendered in 2020.43
In November 2021, the The Hague Court of Appeal confirmed the The Hague District Court's judgment and dismissed the claim by beer wholesaler Groobo that Heineken abused its dominant position or was guilty of unfair commercial practices by charging a lower price for beer sold to catering companies. The Court of Appeal stated that Groobo mentioned (virtually) nothing about the relevant market and about the dominant position that Heineken is said to hold on that market, while Heineken disputed in both instances that it holds any position of power in the Netherlands. Therefore, it could not be proven that Heineken holds a dominant position on a relevant market. Furthermore, Groobo had not explained what Heineken's 'abuse' could consist of. The Court explained that the mere circumstances that Heineken gives different discounts to its various customers, that the discounts given to catering companies may be higher than the discounts given to third-party wholesalers like Groobo, and that some catering companies partly resell the beer purchased from Heineken to third-party wholesalers, do not in themselves constitute abuse within the meaning of the DCA. The Court found that Groboo had not given sufficient concrete leads or indications that could lead to a substantiation of their claim that there is abuse of a dominant position.44
iv Exploitative abuses
In February 2018, the RDC ruled on excessive pricing in a private enforcement case against Videma.45 Videma is a collecting society that issues licences for TV transmission in establishments including hotels, hospitals, pubs and healthcare institutions. As a collecting society it has a dominant position.46 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 from the Consumer Complaints Boards as expert witnesses to answer questions relating to the royalty rates. A reliable international benchmark was not available, because 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 procedure for the determination of damages.
In 2018, the ACM opened an investigation against Leadiant, suspecting it of having a dominant position on the market for CDCA-based drugs for the treatment of the rare genetic metabolic disorder CTX, and having abused that position by charging excessive prices for its prescription drug CDCA-Leadiant in the Netherlands. The ACM discovered that Leadiant, since it started offering CDCA-based drugs, raised prices from €46 per pack in 2008 to €3,103 per pack in 2014. After Leadiant was granted the orphan drug and marketing designation and Leadiant released CDCA onto the Dutch market under a new trade name, Leadiant started charging and collecting an even higher price of €14,000 for the same drug under a different name. This high price could not be justified by high investment costs or innovation purposes. Furthermore, the ACM found that Leadiant's CDCA drug was characterised by low costs in comparison to the revenues, low risks and very high return. According to the ACM, the price Leadiant charged in the infringement period was not only excessive, but also unfair, taking into account the fact that CTX patients are highly dependent on the CDCA-drug given the serious course of the disease. All in all, the ACM concluded that this was a very serious violation and set a fine of € 19,569,500.47 The administrative appeal is currently pending.
Another investigation into an alleged exploitative abuse concerned the investigation regarding the App Store conditions of Apple. In a decision of 24 August 2021, the ACM imposed an order subject to penalties on Apple for abusing its dominant position in the market for app store services on the iOS mobile operating system on behalf of dating app providers. According to the ACM, Apple is, on this market, to a high degree able to act independently from dating app providers and to dictate (any) conditions relating to the App Store, since the dating app providers have no realistic alternative to the App Store (they have no choice but to multi-home), since dating consumers will expect dating apps to reach both iOS and Android users. According to the ACM, the abuse consisted of the obligation imposed by Apple on dating app providers to have Apple settle the payment for purchases within an app and a prohibition to refer to (own) payment options outside the app. The ACM established that these conditions are unfair and limited the freedom of choice of the dating app providers. In addition, the ACM established that the conditions were not necessary for the goals that Apple claimed to be pursuing (such as safety and privacy concerns).
The ACM obliged Apple to adjust the unfair terms and conditions within two months in such a way that dating app providers that offer their dating app in the Dutch App Store can choose for themselves which party they want to settle payments for digital content and services sold within the app. It should also be possible to refer within the app to payment systems outside the app. The ACM ordered Apple to put an end to this violation and adjust its conditions. In the case of non-compliance, Apple was compelled to pay a periodic penalty of €10 million per week, up to a maximum of €100 million in total.48
On 24 December 2021, a preliminary relief judge of the RDC ruled on a request of Apple to suspend the decision of the ACM pending its appeal. The preliminary relief judge largely upheld the ACM decision, and for the most part agreed with the ACM's reasoning. The RDC also ruled that the ACM had validly concluded that Apple holds a dominant position. Crucially in this regard, the Court accepted the market definition proposed by the Dutch regulator of the provision of iOS services for dating app providers. Furthermore, the Court confirmed that the conditions that Apple imposes on dating app providers are indeed unfair within the meaning of Article 102 TFEU, because the conditions disrupt the customer relationship between app providers and consumers, and the conditions limit dating app providers' freedom of choice to simply accepting Apple's terms and conditions and thus using Apple's payment systems.
With regard to the order subject to periodic penalty payments, the preliminary relief judge ruled that the interests put forward by Apple did not provide grounds for suspending the ACM's decision in its entirety. The Court considered that Apple would be sufficiently able to further defend itself in proceedings on the merits against what Apple considered to be an 'experimental' application of competition law. The RDC, however, reasoned that the order did not require major adjustments to the App Store and the required adjustments would not be irreversible in nature. The RDC did rule that it had doubts with respect to a (not further defined) part of the alleged violation in the decision of the ACM ('part b'). This part of the decision has not been made public yet, since the RDC accordingly suspended this part of the decision. The RDC therefore reduced the penalty in proportion to the suspended part of the order, to a maximum of €5 million per week and €50 million in total.49 Appeals by Apple are pending.
Remedies and sanctions
The DCA and various sector-specific regulatory regimes grant the ACM powers to impose fines for abuse of market power.50 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 within the meaning of Article 6 of the European Convention on Human Rights.51
In addition to the statutory regimes, 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.52 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)53 in several respects, but not entirely. According to the Fining Policy Rule, the basic fine is calculated as a percentage (from zero up 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, if 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.54
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.55
i Investigation and sanctioning phase
The ACM may examine infringements of Article 24 of the DCA ex officio or following 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 (the equivalent of a statement of objections in European Commission proceedings). The addressed undertakings (and other interested parties, such as complainants) will have the opportunity to present their views on the allegations in the report, in writing and at an oral hearing.56 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, it is the board of the ACM that decides in full discretion on the basis of the proposal from the legal service.
The stage from the launch of an 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.
Since the entry into force of the ECN+ Directive and the subsequent amendment of the DCA, the ACM also has the authority to intervene during an ongoing investigation by means of an interim measure so as to immediately stop a harmful behaviour.57 The provisional measure may be useful if developments in a market move quickly.
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 procedures 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 ruling of the appellate court, the CBb.
iii Informal guidance
There are no formal procedures for obtaining guidance in 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 may also start handing out informal guidance letters in abuse cases.
Third parties may base an action for damages or injunctions before the civil courts directly under Article 24 of the DCA (as with Article 102 of the TFEU).58 So far, there is no specific regime for private enforcement of national competition law infringements. The Dutch Act implementing the EU Damages Directive59 entered into force on 10 February 2017 and only applies to cases where there has been a breach of EU competition law.60
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 2017.61 For now, general Dutch tort law applies to such actions. Also pursuant to general 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 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.62 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.63
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 to build a convincing economic narrative to support a claim of abuse of dominance.
The ACM stated in its annual report for 2021 that the digital and pharmaceutical sectors are – again – two of its main priorities for 2022 (in terms of abuse of dominance), on which it will increasingly focus on enforcement.
The ACM has indicated that it will, inter alia, address online services and platforms regarding unreasonable conditions (as it did with Apple), that it will issue a guideline to clarify the competition rules for IT suppliers in the healthcare sector, and that it will intensify the detection and enforcement of abuse of dominance in the pharmaceutical market, particularly paying attention to excessive prices and barriers to entry once patents for expensive drugs have expired. The ACM has also named the energy transition and housing markets as priorities in coming years.
1 Jotte Mulder is a senior associate and Sanne Jonkheer is an associate at Pels Rijcken. This chapter builds on previous work in this series from Erik Pijnacker Hordijk and Susanne Kingma.
2 Although such an exemption has to be applied for at, and granted by, the ACM to take effect under Article 25 of the Dutch Competition Act, this exemption may also be requested once a procedure investigating a possible breach has been started.
3 Explanatory Memorandum to the DCA, No. 24 707, p. 71.
6 See, for example, the decision of the Dutch Competition Authority (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 applied with respect to activities already started at the point this legislation came into force.
8 The ACM decided that the two telecoms incumbents, Vodafone Ziggo and KPN, had collective significant market power 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 significant market power; 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/en/publications/an-international-comparison-of-the-abuse-of-dominance-provision/.
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 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. This policy was discussed and confirmed in a recent judgment by the Rotterdam District Court (RDC) of 29 July 2021, ECLI:NL:RBROT:2021:7277 (ACM/Riedel ).
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 See the joint paper written by the heads of the national competition authorities of the EU, published in June 2021 and available (in English) at https://www.acm.nl/sites/default/files/documents/verklaring-voorstel-digital-markets-act.pdf.
20 The German, French and Dutch governments (the 'Friends of the DMA') published two joint papers about strengthening the DMA and its enforcement. The papers can be found (in English) at https://www.bmwi.de/Redaktion/DE/Downloads/M-O/non-paper-friends-of-an-effective-digital-markets-act.pdf?__blob=publicationFile&v=4 (paper from May 2021) and https://www.bmwi.de/Redaktion/DE/Downloads/XYZ/zweites-gemeinsames-positionspapier-der-friends-of-an-effective-digital-markets-act.pdf?__blob=publicationFile&v=4 (paper from September 2021).
21 A summary of the findings of the market study (in Dutch) can be found at www.acm.nl/nl/publicaties/big-tech-en-betaalmarkt-aanscherping-regels-om-gelijk-speelveld-betaalmarkt-te-behouden.
22 Commission Notice on the definition of relevant market for the purposes of Community competition law  OJ C 372/5.
23 European Court of Justice, 14 February 1978, Case C-27/76 (United Brands v. Commission).
24 This also follows from the Explanatory Memorandum to the Dutch Competition Act, No. 24 707, p. 25.
25 Decision of the District Court of Amsterdam of 21 March 2018, ECLI:NL:RBAMS:2018:1654.
26 Decision of the Amsterdam Court of Appeal of 26 May 2020, ECLI:NL:GHAMS:2020:1337.
27 Case No. 16.0691.31, decision of the ACM of 22 May 2017.
28 Decision of the District Court of Rotterdam of 27 June 2019, ECLI:NL:RBROT:2019:5089 (NS/ACM).
29 Decision of the Trade and Industry Appeal Tribunal of 1 June 2021, ECLI:NL:CBB:2021:560.
30 Decision of the Trade and Industry Appeal Tribunal of 7 October 2010, AWB 07/596, LJN: BN9947 (CR-Delta).
31 Case No. 4296_1, decisions of the NMa of 5 January 2011 (213) and 21 January 2011 (197) and the decision on appeal of the NMa of 30 June 2011 (214) (GasTerra).
32 Case No. 5702, decision of the NMa of 20 July 2007 (207).
33 European Court of Justice, 26 November 1998, Case C-7/97 (Bronner).
34 Decision of the Amsterdam Court of Appeals of 12 June 2012, Case No. 200.018.917, LJN: BX0460.
35 Decision of the Dutch Supreme Court of 24 January 2014, ECLI:NL:HR:2014:149.
36 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.
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 Amsterdam Court of Appeal of 26 May 2020, ECLI:NL:GHAMS:2020:1337.
44 Decision of the The Hague Court of Appeal of 2 November 2021, ECLI:NL:GHDHA:2021:2005.
45 Decision of the Court of Rotterdam of 21 February 2018, ECLI:NL:RBROT:2018:1037 (NVZ Vereniging van Ziekenhuizen ao v. Videma).
46 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).
47 A summary of the decision can be found (in Dutch) at https://www.acm.nl/sites/default/files/documents/samenvatting-besluit-misbruik-van-economische-machtspositie-door-leadiant.pdf.
48 A summary of the decision can be found (in Dutch) at https://www.acm.nl/sites/default/files/documents/samenvatting-besluit-misbruik-economische-machtspositie-door-apple.pdf.
49 Decision of the District Court of Rotterdam of December 24, 2021 ECLI:NL:RBROT:2021:12851
50 See Article 56 of the DCA and the Act establishing the Authority for Consumers and Market.
51 These rules, laid down in the General Administrative Law Act, comprise the right to remain silent and the ne bis in idem principle.
52 Policy rule of the Minister of Economic Affairs of 4 July 2014, No. WJZ/14112617, on the imposition of administrative fines by the ACM (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.
53 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.
54 Dutch Competition Act, Articles 56 and 58a.
55 ACM Policy Guidelines Administrative Fines, pp. 4 and 5.
56 Article 59 of the DCA in combination with the rules laid down in Chapter 5 of the General Administrative Law Act.
57 Article 11 of the Directive (EU) 2019/1 of the European Parliament and of the Council of 11 December 2018 to empower the competition authorities of the Member States to be more effective enforcers and to ensure the proper functioning of the internal market and Article 58b of the DCA.
58 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.
59 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.
60 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.
61 Draft regulation: bill on amendment of the Competition Act in relation to market and government, merger control and private enforcement.
62 Decision by the District Court of Central Netherlands of 10 July 2013, ECLI:NL:RBMNE:2013:3245.
63 Decision by the District Court of Central Netherlands of 30 December 2013, ECLI:NL:RBMNE:2013:7536.