The Netherlands Authority for Consumers and Markets (ACM) has imposed a fine of 350,000 euros on VNA, the Dutch trade association for pharmacies, for failing to notify ACM on time of the acquisition of four pharmacies.
Martijn Snoep, Charmain of the Board of ACM, explains: “If companies want to merge, we assess in advance whether sufficient competition will remain after the concentration. If companies fail to notify us of their plans, we are unable to assess those plans. Our assessment is critical to preventing any company from becoming too powerful. We must therefore be able to be confident that companies always notify us of mergers and acquisitions that meet the turnover thresholds. If market participants fail to do so, we will take firm action.”
What was this case about?
On July 1, 2019, VNA acquired four pharmacies in the southern Dutch city of Tilburg. ACM should have been notified of this acquisition in advance. That is because the combined turnover of these pharmacies exceeded the turnover threshold for merger and acquisition notifications in the health care sector.
VNA’s plan was to buy the four pharmacies, and, shortly thereafter, to resell a part of one of those pharmacies. However, the resale had not been laid down in a legally binding manner, and did not take place either. As a result, VNA had to include the turnover of the part that they wanted to resell in the combined turnover of the four pharmacies. As a result, the turnover thresholds were met, which meant they had to notify ACM of the acquisition. VNA has acknowledged that they should have notified ACM of the acquisition, and has fully cooperated with ACM’s investigation into this violation. In that context, VNA also cooperated with a simplified procedure. That is why the fine was lowered.
Acquisition has been assessed after all
In late 2021, VNA did notify ACM of the acquisition of the four pharmacies. ACM has assessed this acquisition, and concluded that sufficient competition will remain.
How does ACM assess mergers and acquisitions?
With any merger or acquisition, there is a question of whether sufficient competition will remain on that market after the concentration, and in the future. Competition ensures that products are of high quality, that they are offered on the market at competitive prices, and that innovation is stimulated. That is why ACM decides in advance whether or not companies are allowed to merge or acquire other companies. Not all mergers and acquisitions have to be notified of. If the companies that merge do not meet certain turnover thresholds, then the companies can merge without notifying ACM thereof. ACM assesses whether the markets involved will continue to work well for people and businesses, now and in the future.