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NMa imposes fines for failure to notify of concentrations on time

In two unrelated cases, the Netherlands Competition Authority (NMa) has imposed fines, totaling €1,302,000, for failure to notify of concentrations on time. The first case concerns the acquisition of shares of Buitenfood, a Dutch holding company of several frozen-food companies, by Dutch private equity firm NPM Capital, while the second case concerns the acquisition of joint control over ethanol-trading company Alcotra by holding company Sibco and raw-materials trading company Trafigura.

Based in part on media news reports, the NMa established that NPM Capital's acquisition of shares of Buitenfood should have required the NMa's approval. The NMa has thus imposed a fine of €580,000 on NPM Capital and a fine of €15,000 on Driesprong Participaties for failing to notify of the concentration on time. In addition, the NMa has imposed an order subject to periodic penalty payments on NPM Capital, ordering it to still notify the NMa of the acquisition within four weeks. NPM Capital faces a penalty payment of €10,000 for each day after those initial four weeks that it has still not notified of the acquisition, with a maximum of €400,000.

The second case concerns the acquisition of joint control over ethanol-trading company Alcotra by holding company Sibco and raw-materials trading company Trafigura in December 2007. Almost two years after it had happened, the undertakings involved finally notified the NMa of this concentration of their own accord. The NMa approved the concentration on November 23, 2009. Sibco is imposed a fine of €118,000 and Trafigura a fine of €589,000, both for failing to notify of the concentration on time.

Under the Dutch Competition Act, undertakings are required to notify the NMa of concentrations (acquisitions, mergers or joint venture) if at least two of the undertakings involved each have a turnover in the Netherlands of at least €30 million and if all parties involved have a combined, global turnover of at least €113,450,000. It is prohibited for undertakings to go ahead with a concentration without having notified the NMa in advance of their intention to do so. This form of ex-ante regulation ensures that competition on a market will not be affected before the NMa has been able to look into a concentration for possible, significant impediments to competition as a result of the proposed concentration. In these cases, the NMa imposes fines, because failure to notify of a concentration on time severely undermines concentration control.

These fines mark the second time that the NMa imposes a fine based on its expanded fining powers, which came into effect on October 1, 2007 with the adoption of amendments to the Dutch Competition Act. The maximum fine for failure to notify of a planned concentration was raised from €22,500 to €450,000 or, in case it is higher, 10 per cent of the undertaking's turnover. This is a clear sign that lawmakers endorse the importance of strict compliance with competition regulations.