The Dutch competition authority (“ACM”) has recently published a paper setting out its strategy and enforcement priorities relating to vertical agreements. The paper is available in English: https://www.acm.nl/en/publications/publication/14226/ACMs-strategy-and-enforcement-priorities-with-regard-to-vertical-agreements/ The paper (re)confirms ACM’s lenient economic approach towards vertical restraints: ACM assumes that vertical restraints are generally pro-competitive in the absence of market power. This includes typical hard-core restraints such as resale price maintenance (RPM).
- Selected highlights in the paper include: A brief description of relevant e-commerce developments (e.g. selective distribution, online sales restrictions and Across Parity platform Agreements (APPAs)) and related enforcement activity in Europe. ACM supports the EU Commission’s e-commerce sector inquiry and looks forward to the results thereof, which – at some later time – will be incorporated in ACM’s supervision.
- Consumer welfare is at the center of ACM’s enforcement. The effects of vertical restraints are assessed on the basis of: (i) market power of the supplier imposing the vertical restraint; and/or (ii) (market)wide application of vertical restraints; (iii) enforcement of vertical restraints by retailers against the supplier’s wishes; and (iv) efficiencies.
ACM discusses several hypothetical scenarios explaining its approach towards certain types of vertical restraints:
- If RPM is applied by a supplier with a low market share and there is strong interbrand competition, the ACM will not treat this as an enforcement priority. This scenario is based on a recent decision of the Australian competition authority (Tooltechnic), in which RPM was held admissible. This would be different if the supplier has market power, in which case the ACM would investigate whether consumers as a group suffer damage.
- If there is market-wide RPM by different suppliers, the ACM will prioritize this if (i) there is no convincing efficiency explanation, or (ii) collusion between suppliers is a real possibility. If collusion is unlikely and there is a convincing efficiency explanation, the ACM will not consider this a priority.
- Dealers collectively forcing a supplier to cancel supplies to an online dealer would be treated as an enforcement priority by the ACM, unless the supplier has a low market share and restrictions on online retail are also minor. Enforcement would therefore be less likely if there is strong interbrand competition and the suppliers continues to sell to other online retailers.
- Finally, ACM addresses Across Parity Platform Agreements (APPAs), according to which a supplier is prevented from offering a lower price on another platform. Again, the ACM takes an effects-based approach. To the extent it is more likely that access to the platform market is permanently restricted or platform prices increased, and less likely that efficiency improvements occur, it is more likely that the ACM starts an investigation.