NMa Upholds Earlier Prohibition on Maximum Discounts in the Clothing Sector

The Nederland Competition Authority (NMa) has once again decided in a ruling on an administrative appeal that the system of maximum discounts applied by Vereniging Modint Ondernemersorganisatie voor mode en interieur [Association of the Dutch Clothing and Knitwear Industries], (previously Nederlandse Kleding Conventie BV) contravenes the Competition Act. This relates to three types of discounts: payment discounts, credit payments and premiums to stimulate turnover. Under the system, if the so-called NTKC conditions are declared to apply to the sale of clothing to procurement organisations and retailers, Modint members (clothing suppliers) may not offer a higher discount than the maximum discount. NMa is of the opinion that this system contravenes the Competition Act since it must be possible for every supplier to decide independently on the discount it wishes to give. Collectively agreeing on the level of these discounts constitutes a price agreement. This is prohibited by the Competition Act.

Modint is of the opinion that collective agreements with regard to payment discounts should also apply in the Netherlands, since they are permitted in the German clothing sector. According to NMa, the Dutch Competition Act does not permit agreements with regard to payment discounts, as applied by Modint. The Competition Act naturally also applies to German suppliers who operate on the Dutch market.