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ACM suspends investigation into possible wage-fixing cartel between supermarkets after conclusion of collective agreement

There are indications that several supermarkets in February made arrangements regarding a limited wage increase of 2.5 percent for their employees. This was found by the Netherlands Authority for Consumers and Markets (ACM) following a preliminary investigation. The mutual arrangements were made after the collective-agreement negotiations broke down in late January. The supermarkets seemed to have coordinated these arrangements through the trade association. The unions did not agree with these arrangements. That may indicate a wage-fixing cartel, which is illegal. Recently, employers and employees did agree on a new collective agreement, which will take effect retroactively. That is why ACM suspends its investigation into a possible wage-fixing cartel.

What are the rules?

  • Employers cannot coordinate or make mutual arrangements regarding wages and the terms of employment;
  • Trade associations cannot issue any recommendations regarding wages or the terms of employment. 

Such types of arrangements among employers are aimed at restricting competition between competitors when hiring and retaining staff. As a result of such arrangements, employees may end up with lower wages or less favorable terms of employment than they would have had without such arrangements. Even if the wage increase were meant as an advance on a future collective agreement, it would still be prohibited. After all, employers can arrange wage increases (or advances thereon) on an individual basis. That could lead to higher advances, especially in a tight labor market. The bans also apply to collective-agreement negotiations that have been broken off (either permanently or temporarily).

Employers together with employees are allowed to negotiate about and make collective arrangements regarding wages and terms of employment. The Dutch Competition Act does not apply to such collective-agreement negotiations.

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