NMa Fines Branch Organisations in the Bicycle Retail Trade

The Netherlands Competition Authority (NMa) has imposed a fine of EUR 125,000 on BOVAG and EUR 30,000 on Nederlandse Christelijke Bond van Rijwiel- en Motorhandelaren (NCBRM) for recommending that its affiliated bicycle retailers should not do business with two suppliers of bicycles for company bicycle schemes and making recommendations, for instance, with regard to prices, discounts and margins. This behaviour is in conflict with the prohibition on cartels. Price recommendations limit competition since companies are required to determine their prices independently.

NMa has determined that the Bicycle Companies Department of BOVAG and NCBRM on two occasions strongly recommended that its affiliates not do business with two suppliers of bicycles for company bicycle schemes, namely Vervoer Coördinatie Centrum Brabant (VCC Brabant) and Nationale Fietsprojecten B.V. (NFP). According to BOVAG and NCBRM, the margin which these two suppliers of bicycles offered bicycle retailers on the sale of company bicycles were too low. In addition, the Bicycle Companies Department of BOVAG advised its members with regard to calculating the increase in workshop rates for the year 2000 and consumer prices for service and maintenance. NCBRM advised its members on the percentages to be included in workshop rates to cover interest costs and the profit margin.

The Competition Act allows Branch organisations to advise their members on the cost price structure in the Branch, on condition that the affiliated companies determine their prices independently. Branch organisations may not, however, recommend (parts of) prices.

The infringements took place in the period from 1998 up to and including 2002. More than three quarters of all bicycle retailers in the Netherlands are affiliated to one of the two branch organisations.