Competition law

Companies may not push other companies off the market by means of cartel agreements, mergers or a dominant market position. Those are the three pillars of the Dutch Competition Act. That Act is based on European competition law. The Netherlands Competition Authority (NMa) enforces compliance with the law. Within the European Union the European Commission is responsible for both policy and supervision.

Cartel law

Briefly, cartel prohibition means that companies may not make any agreements which do or may restrict competition. Such agreements may involve prices, discounts, exclusive markets and/or customers, parallel import, competition clauses, specialization, exploitation of patents, etc. The same applies to decisions made by employers’ associations.

Cartel law frequently plays a role in distribution, agency, franchise and cooperative agreements. Agreements that conflict with European or national cartel prohibitions are invalid. What’s more, companies risk incurring severe penalties imposed by competition authorities and civil claims by third parties.

Abuse of a dominant position

A company with a dominant economic position is deemed to have ‘special’ responsibility. Whether or not a company has an dominant economic position depends on its share of the market in which it is active. The size of the company is not relevant.

Having a dominant economic position is not forbidden in itself. On the other hand, such a position may not be abused. Examples of abuse are refusals to supply, too high or too low prices, tie-in sales, etc.

Merger control

If companies want to merge, acquire another company or set up a joint venture, they have to check whether the transaction concerned should be notified to one or more competition authorities. As long as the approval has not been received, the transaction may not be effected. If companies go ahead nevertheless, the transaction is void and the competition authority may compel companies to cancel it. The parties involved may also be liable to a heavy fine.

Lawyers:
mr. M.J. (Minos) van Joolingen
mr. S.M.M.C. (Silvia) Vinken