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Stibbe | Net(work) closing in on cross-border cartels?

A heads-up for companies with cross-border activities. The ECN+ Directive’s transposition deadline has expired and its provisions should by now have found their way into the national laws of the EU Member States. In the Netherlands, amendments to the Dutch Competition Act giving effect to the ECN+ Directive came into force recently, together with a new governmental decree on leniency.

Companies should update their dawn raid manuals to take account of the newly acquired enforcement tools now available to certain national competition authorities. They should also be aware that cross-border dawn raid cooperation within the European Competition Network will soon run more smoothly, and that national competition authorities may more easily collect their antitrust fines and periodic penalty payments across jurisdictions. Competition enforcement within the EU may therefore intensify in due course.

NCA empowerment

National competition authorities (NCAs) across the EU apply EU competition rules within their jurisdictions on the basis of Regulation 1/2003. To safeguard the consistent application of these rules, the European Commission and the NCAs cooperate with each other in the European Competition Network (ECN). The ECN+ Directive aims to further enhance this consistency by ensuring that all NCAs have similar powers to gather evidence of, or tools to impose sanctions for, EU competition law violations. In addition, the Directive seeks to smooth over the differences in leniency policies with a coordinated leniency programme.

Increased cross-border cooperation?

EU Member States should have transposed the ECN+ Directive into their national law by 4 February 2021. Consequently, NCAs previously lacking the necessary tools to gather evidence may soon use their new powers to conduct dawn raids. In addition, the mutual assistance of NCAs during dawn raids, laid down in Article 22 of Regulation 1/2003, has been further facilitated by enabling officials of a requesting NCA to attend and actively assist another NCA during dawn raids conducted on its behalf in the other NCA’s territory.

Enforcement of decisions on fines or periodic penalty payments has also been improved. NCAs can request another NCA to enforce their decisions (and collect the fines or periodic penalties on their behalf) if the company concerned does not have sufficient assets in the territory of the requesting NCA to enable recovery of the fine or periodic penalty.

Amendments to the Dutch Competition Act

In the Netherlands, the amendments to the Dutch Competition Act (DCA) giving effect to the ECN+ Directive, together with a new governmental decree on leniency, came into force on 18 February 2021. Given that the Dutch Authority for Consumers and Markets (ACM) was already well-equipped, the amendments generally relate to a mere fine-tuning of the ACM’s powers. The DCA now, for instance, specifies that the ACM will not only require prior judicial authorisation to enter private homes but also in regard of private premises, land or means of transport.

However, the ACM did obtain one brand new tool: the power to impose interim measures on companies to prevent potential serious and irreparable harm to competition, on the basis of a prima facie finding of an antitrust infringement; an instrument the European Commission has had for some time, but dusted off only recently (see our November 2019 newsletter). This tool is likely to be used more often considering the current call for swifter action (as illustrated by the proposed Digital Markets Act).

A short overview of the DCA’s main amendments, including references to the enabling provisions in the ECN+ Directive empowering the NCAs and the similar powers of the European Commission, is provided below.

European Commission NCA ACM
Relevant legal acts Regulation 1/2003 Regulation 1/2003 & ECN+ Directive Amendments to DCA
Interim measures Article 8 Article 5 Reg.1/2003

Article 11 ECN+ Directive

Article 58b DCA
Conducting dawn raids assistance Article 20(5)
on behalf and for the account of Article 22 Article 22 Reg. 1/2003

Articles 24 ECN+ Directive

Article 89ga DCA
Inspection powers Article 20 Article 6 ECN+ Directive
Inspection of other premises Article 21 Article 7 ECN+ Directive Article 53a DCA
Requests for collecting fines or periodic penalty payments Article 26 ECN+ Directive Article 89gc DCA

Conclusion

Companies may soon face more dawn raids, as well as greater cross-border cooperation among NCAs. Companies should therefore not only brush up on their rights and responsibilities during dawn raids, but should also update their dawn raid manuals for those territories in which NCAs have been newly empowered.

Contact:

  • Floris ten Have, Partner, STIBBE | floris.tenhave[at]stibbe.com

Compliments of Stibbe – a member of the EACCNY.