NMa lowers fines for failure to notify of an acquisition on time
The fines that the Netherlands Competition Authority (NMa) had earlier imposed on Henal N.V. and on Schilde Beheer B.V. for their failure to notify the NMa on time of the acquisition of Pacton B.V. have been lowered after an objection procedure. The fines, having been initially set at €315,000 (Henal) and at €92,000 (Schilde), have each been lowered to €22,500.
Under the amended Dutch Competition Act, effective as of October 1st, 2007, fines for failing to notify the NMa of an acquisition on time can now be as high as €450,000. If annual turnover of the undertaking in question exceeds €4.5 million, the fine can be as high as 10 per cent of that undertaking's turnover. Prior to those amendments to the Competition Act, fines could not exceed €22,500. The acquisition that Henal and Schilde Beheer had failed to notify of was completed on October 11th, 2007, which was after the amendments of October 1st had taken effect. However, the acquisition had been completed one day before the NMa policy on fines, as laid down in the NMa Fining Code 2007, and with the new maximum level of fines, took effect. Having been advised on the matter by the committee that the NMa consults with in connection with objections, the NMa decided to lower the imposed fines to the previous maximum level.
Under the Dutch Competition Act, undertakings are required to notify the NMa of an acquisition (or merger/joint venture) if the following criteria are met: a. if at least two of the undertakings involved each have a turnover in the Netherlands of at least €30 million and b. if all parties involved have a combined, global turnover of at least €113,450,000. It is prohibited for undertakings to go ahead with an acquisition without having notified in advance the NMa of their intention to do so, and without the NMa having assessed the acquisition. When reviewing joint ventures, mergers, and acquisitions, the NMa assesses whether effective competition in the market is significantly impeded, particularly when a dominant position is created or strengthened. Such a position could have negative effects on prices, quality and range of the products or services in question. If such is expected to be the case, the NMa could then attach conditions to a merger, or it could block the merger. Failing to notify the NMa on time of an acquisition undermines the NMa's regulatory task of assessing acquisitions, which is why the NMa is authorized to impose fines for these kinds of omissions.