Contributed By Nysingh Advocaten-Notarissen N.V
The sanctions that the ACM may impose on undertakings are fines and orders for periodic penalty payments. An order for periodic penalty payments is designed to lead, among other things, to the quick termination of an infringement, and therefore serves a different purpose from a fine. A fine and an order for periodic penalty payments can both be imposed for the same infringement.
The maximum fine that the ACM may impose per violation of the cartel prohibition is EUR900,000 or 10% of the total (global) annual turnover of the undertaking involved, whichever is higher. The maximum amount also depends on the duration of the cartel, since the aforementioned maximum can be multiplied by the number of years the violation lasted (with a minimum of one and a maximum of four years). In the case of repeat violations, this fine can even be doubled.
As under the EU competition law regime, a parent company can (and will) be held liable for a fine imposed on its subsidiary. It is for the parent company to demonstrate that it does not or did not exercise a decisive influence over the behaviour of the subsidiary. Moreover, the highest administrative court in the Netherlands with respect to penalty decisions of the ACM recently ruled that the ACM may hold an investments firm liable for a cartel infringement committed by its portfolio company, because it exercised decisive influence over that portfolio company. In this particular case, the investments firm was fined separately instead of jointly and severally, as is normally the case regarding parent companies and their subsidiaries. This was due to specific circumstances of the case.
The ACM may also impose fines on individuals up to a maximum of EUR900,000. Such a fine may be increased by 100% if the individual committed a similar infringement within the previous five years.
The level of fines that the ACM may impose must be determined along the rules laid down in 2014 Policy Rules of the Minister of Economic Affairs on the imposition of administrative fines by the ACM, which provide detail on the manner in which the ACM may exercise its power to impose administrative fines – within the boundaries of the law.
The ACM sets a basic fine of between 0% and 50% of an undertaking's relevant turnover, depending on the seriousness of the violation, the circumstances in which it was committed and its duration. The relevant turnover consists of the revenues that a company has earned through the supply of goods and services that are directly or indirectly related to a violation, minus discounts, etc, and minus turnover tax, in the last full year in which the company committed the violation, multiplied by a factor of one twelfth for each month that the violation lasted.
The ACM may impose a sanction directly, but there is a separation (Chinese wall) between the ACM department that carries out investigations and prepares the statement of objections, and the department that decides whether a sanction should be imposed. After an investigation has resulted in a Statement of Objection (SO) by the Competition Department, the case will be handed over to the Legal Department of the ACM, which is not independent but part of the ACM organisation. The Legal Department must hear parties on the SO. Parties are entitled to respond to the statement of objections at least in writing, and are normally also allowed to respond orally. The oral hearing will take place in front of a hearing committee composed of officials of the Legal Department of the ACM. The Legal Department will consider the case and draft a proposal for a decision to be taken by the Board of the ACM.