Judgments on a party’s inability to pay a cartel fine are relatively rare. If such a judgment is issued, it often raises many questions, in part because the actual assessment of the undertaking’s inability to pay request is generally marked as confidential. That is true of this Dutch case, in which the Dutch Trade and Industry Appeals Tribunal (CBb) significantly reduced a cartel fine imposed on an unknown entity (the Appealing Party) that lodged a higher appeal before the CBb based on the exceptional circumstances of the case, including the Covid-19 crisis.1 This article describes the case (Section 2) and briefly reiterates the legal framework for an inability to pay request under EU and Dutch law (Section 3). Section 4 discusses the cautious approach of the competition authorities to undertakings’ inability to pay requests, including the aim of a fine cap to prevent the imposition of excessive fines. The last three sections discuss questions that the CBb’s judgment raises: why was the Appealing Party’s inability to pay request rejected (Section 5)? why was the Appealing Party granted a significant reduction of the fine, despite the rejection of its inability to pay claim (Section 6)? what options do undertakings have when they have been fined, but are also confronted with financial difficulties due to the Covid-19 crisis (Section 7)? II. Description of the case In its decision of 17 February 2017, the Netherlands Authority for Consumers and Markets (ACM) (the Dutch competition authority) established that several undertakings infringed Article 101(1) TFEU and Article 6(1) of the Dutch Competition Act (Mededingingswet).2 The ACM imposed a total fine of €2,798,000 on the Appealing Party’s group. The ACM held the Appealing Party jointly and severally liable for €2,060,000 of the fine and the Appealing Party’s parent company (the Parent Company) liable for the total amount of the fine. In its decision on an objection, the ACM reduced the fine for the Appealing Party to €1,935,000 and renounced the fine imposed on the Parent Company due to its inability to pay.3 The Parent Company and the Appealing Party each separately lodged an appeal before the Rotterdam District Court. Key Points The Dutch Trade and Industry Appeals Tribunal (CBb) significantly reduced the cartel fine of an appealing party based on the exceptional circumstances of the case, including the duration of the procedure, the appealing party’s financial situation and the Covid-19 crisis. Even though the appealing party’s inability to pay request was rejected, the fine was nevertheless significantly reduced based on the principle of proportionality. The reason for rejecting the appealing party’s inability to pay request was that it did not meet the required causality condition: It was the Covid-19 crisis that would likely result in the bankruptcy of an economically viable undertaking, rather than the fine. The Rotterdam District Court confirmed the Appealing Party’s participation in the competition law infringement but decided that the fine imposed by the ACM was not proportionate. The Rotterdam District Court therefore reduced the Appealing Party’s fine from €1,935,000 to €1,000,000.4 On higher appeal before the CBb, the Appealing Party argued that its current financial capacity was limited to such an extent that a fine of €1,000,000 was no longer proportionate and could lead to imminent bankruptcy. The ACM did not agree with the interpretation and assessment of the Appealing Party’s inability to pay. The ACM nevertheless found a fine of €10,000 more proportionate considering the exceptional circumstances, in particular: the duration of the procedure: in view of the Parent Company’s ongoing proceedings before the Rotterdam District Court, there was no possibility of expediting the Parent Company’s proceedings thereby causing uncertainty about the Appealing Party’s fine for too long; the Appealing Party’s current financial situation and the stated urgency; and the Covid-19 crisis and its alleged consequences for the Appealing Party. In the view of these current circumstances, the CBb concluded that a fine of €10,000 was proportionate and appropriate and annulled the €1,000,000 fine imposed by the Rotterdam District Court.
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Jul 16, 2021
Zane Ratniece 
Open Access
