Consumer welfare central in ACM’s enforcement with regard to vertical agreements

With today’s publication, the Netherlands Authority for Consumers and Markets (ACM) provides insight into its strategy and enforcement priorities with regard to vertical agreements between suppliers and buyers. In its enforcement actions, ACM particularly focuses on those agreements that negatively affect consumers.

For businesses that wish to check their own agreements, ACM has also created an information chart to help them in that assessment. Chris Fonteijn, Chairman of the Board of ACM, explains: “There are many questions among businesses about what ACM’s view is on vertical agreements. With these two publications, we wish to address those questions, for example, under what circumstances would ACM investigate a vertical agreement?”

What is the problem?

Agreements between, for example, a supplier of a certain product and retailers that sell that product to consumers can have both positive and negative effects for consumers. Consumers benefit from vertical agreements that lead to better service or new suppliers in the market. However, these kinds of agreements can also result in less choice or higher prices for consumers. ACM’s enforcement practices are aimed at vertical agreements that, on balance, are harmful to consumer welfare.

What will ACM do?

There are also types of vertical agreements that ACM will not investigate in detail because these have already been designated legal exceptions. With regard to agreements that are not considered exceptions, ACM makes an initial assessment of their effects on consumers. In that assessment, ACM weighs the positive effects of the agreements against their negative ones. ACM chooses to investigate those agreements where the negative effects exceed the positive ones. A more in-depth follow-up investigation could lead to ACM taking enforcement actions, which, for example, could mean prohibiting the agreement or imposing fines on the businesses involved.

If you are a business owner, what can you do?

As a business owner, you will have to test the agreements you have made with your buyers and suppliers against antitrust legislation. With regard to vertical agreements that fall under ACM’s responsibility, you can test your agreements by using the information chart that ACM has published. By answering questions for yourself about the nature, the scope, and the effects of the agreements to which you are a party, you will be able to assess whether you are making or have made agreements that may have negative effects for consumers. These are also the types of agreements that ACM would investigate. In addition, you can also submit to ACM any indications you may have about other vertical agreements that you are aware of or that you wish to bring to the attention of ACM.