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District court: ACM is allowed to publish fine it imposed on suppliers of notary paper for a cartel agreement

On May 11, 2021, the District Court of Rotterdam ruled in a cartel case involving notary paper (special paper that notaries in the Netherlands must use, for example, for mortgages and deeds of purchase). The Netherlands Authority for Consumers and Markets (ACM) in 2017 imposed fines for this cartel. The parties that were involved in this cartel filed various lawsuits since 2017 (see overview, in Dutch). Following the ruling of May 11, ACM is now able to publish the entire cartel case (including the decisions and the thereto-related rulings). The court upholds the cartel violation and the liability of Koninklijke Joh. Enschedé (KJE) as parent company of its then-subsidiary Joh. Enschedé Amsterdam (JEA).

What was this case about?

Three suppliers of official paper for deeds concluded, in secret, illegal price-fixing agreements in order to limit competition among each other. These suppliers were JEA, Centraal Inkoopbureau (CIB), and XLPapier (XLP).

Until 2006, JEA, which was a printer of official paper and documents, was the only supplier of notary paper in the Netherlands. In 2006, CIB and XLP also wished to sell notary paper to notaries. Competition with former monopolist JEA thus started. However, instead of competing with each other, JEA and CIB in early-2007 concluded secret agreements with regard to the price that notaries had to pay for their paper. In mid-2008, XLP joined this price-fixing agreement. The violation ended on April 16, 2013. The arrangements thus existed for over 6 years.

Price-fixing agreements

CIB and XLP had agreed with JEA that they would set their prices no more than 5% below JEA’s price. CIB and XLP each knew that the other had made the same agreement with JEA. At the end of each year, JEA sent its new selling prices to CIB and XLP, so that they could adjust their prices. On the basis of the evidence, it turns out that JEA, CIB and XLP each enforced compliance with the 5%-rule.

One special aspect of this case was that JEA supplied notary paper to CIB and XLP (wholesale), but also sold notary paper to notaries directly. CIB and XLP were therefore JEA’s buyers and competitors at the same time. The parties involved therefore argued that the agreements had to be regarded as arrangements between manufacturer and buyer. ACM, however, argued that the parties involved coordinated the prices that they charged notaries among each other as competitors. The court confirmed ACM’s opinion, and established that cartel agreements were made between competitors.

In addition, CIB and XLP each were only in direct contact with JEA, and not with each other. However, CIB and XLP were aware of the fact that the other had made identical arrangements with JEA. That is why, according to the court, this is a single violation.

Fines

Following various legal proceedings, the total fine on the undertakings is 13,000 euros. CIB was not fined because it was the first to notify ACM of the price-fixing agreements, which is why that company was granted full leniency. The fine on XLP was reduced because it was the second to apply for leniency and cooperated well with ACM’s investigation.

See also

01-07-2021 Decision on objection regarding de facto executive in official-paper cartel (in Dutch)
01-07-2021 Decision on objection regarding cartel involving sellers of notary paper (in Dutch)
01-07-2021 Cartel fine on sellers of notary paper (in Dutch)