NMa Netherlands Competition Authority

Fining rules explain how the NMa sets the level of its fines. Generally speaking, the level of a fine depends on the turnover of the undertaking in question, and is related to the economic context of the violation. The seriousness and duration of the violation, too, play a role.

By imposing fines, the NMa aims to penalize violations, and to prevent repeat violations, either by the fined undertaking or individual, or by others. It is not the NMa’s aim to skim off the economic benefits that the violation has yielded. Fines are not tax deductible.

The NMa is authorized to impose fines when any of the following acts are violated: the Dutch Competition Act, the Dutch Electricity Act 1998, the Dutch Gas Act, the Dutch Independent Grid Administration Act, the Dutch Railway Act, the Dutch Aviation Act, the Dutch Pilotage Act, the Dutch Telecommunications Act, the Dutch Act on Financial Oversight, the Act on the Implementation of EC Directives on Energy Efficiency, and the Dutch General Administrative Law Act.

There are three types of fining rules:

• Rules for violations of the prohibition of cartels (Section 6 of the Dutch Competition Act and/or Article 101 of the Treaty on the Functioning of the European Union) and of the prohibition of abuse of dominant positions (Section 24 of the Dutch Competition Act and/or Article 102 of the Treaty on the Functioning of the European Union), committed by undertakings;
• Rules for violation of the other provisions of the Dutch Competition Act, and the energy and transport acts;
• Rules for violations of some of the abovementioned acts, committed by natural persons.

Over the years, the rules have been improved, and new rules have been added.

When determining the level of fines imposed for violation of the prohibition of cartels or the prohibition of abuse of a dominant position, the NMa uses the turnover that is related to the violation. Of that relevant turnover, 10 percent is used as the so-called starting point for the fine. That amount is multiplied by a certain factor, depending on the seriousness of the violation.

The NMa used to have three ranges for these factors. Very serious violations corresponded with a factor ranging from 1.5 to 3, serious violations with a factor ranging from 0 to 2, and somewhat serious violations with a factor ranging from 0 to 1.

With the introduction of stricter fining rules on October 1, 2009, the three fining categories were preserved, and it was decided that the factor could be set to 5 at the most, in accordance with the seriousness of the violation. The basic fine may subsequently be increased or lowered because of mitigating or aggravating circumstances.

The cases that have been taken up since October 1, 2009, fall under these stricter fining rules. This means that the basic fine (the amount that is determined based on the relevant turnover) can be increased by, at the most, 25 per cent of the relevant turnover in the year before the year of participation in the violation.

The European Commission, too, uses this ‘basic fine surcharge’ for very serious violations. The fine will be increased by, at the most, 100 per cent if the undertaking in question has already been fined before for a similar violation (recidivism), unless this would be clearly unreasonable, given the circumstances of the case in question. As already mentioned above, the maximum of the multiplying factor used for increasing the basic fine has been raised from 3 to 5. The fining rules have not been issued by the NMa, but rather by the Minister of Economic Affairs, Agriculture, and Innovation (former Minister of Economic Affairs).

In case of other violations of legislation the NMa enforces, a percentage of the undertaking’s annual turnover is used as the starting point. Examples of violations include the failure to notify of a concentration on time, or the breaking of seals the NMa uses to seal off rooms during dawn raids. An example of a violation in the energy industry is failure to comply with the tariff structures and conditions the NMa has set, or violation of consumer protection regulations.

The level of fines on natural persons depends on the seriousness of the violation, that person’s taxable income, and his assets. Executives that have given instructions to or have exercised de factor leadership over a violation can be fined.

• Policy rules on the imposition of administrative fines 2009
• Press release (2009): New policy rules have come into effect 

• NMa Fining Code 2007
• Annex to NMa Fining Code 2007 (in Dutch)

If the NMa’s statement of objections was sent to the parties involved before July 1, 2007, the NMa applies the Guidelines for the Setting of Fines 2001 in cases of violation of Sections 6 and/or 24 of the Dutch Competition Act, and Articles 101 and/or 102 of the Treaty on the Functioning of the European Union (former Articles 81 and 82 of the EC Treaty).

• Guidelines for the Setting of Fines 2001 (in Dutch)

The transport industry has its own fining rules, which came into effect October 1, 2009. If the Dutch Railway Act, the Dutch Aviation Act or the Dutch Pilotage Act is violated, a fine can be imposed on the offender. The Minister’s policy rules do not apply to violations of these three acts. Instead, the NMa determines the level of the fine based on its own ‘Policy rules on administrative fines under transport legislation’.

Other competition authorities, too, use fining rules. In recent years, these rules have increasingly become more similar to the system the NMa introduced in 2001: fining based on turnover related to the violation. Next to the European Commission, national regulators, too, use similar rules.

In 2008, European regulators jointly published the principles of fining violations of the prohibition of cartels and the prohibition of abuse of dominance, the so-called ECA Principles for convergence.

Undertakings or individuals can notify the NMa themselves of their participation in a cartel. If an undertaking or individual does so, they may qualify for fine reductions. The first one to notify may even escape a fine altogether.

• Policy rules of the Minister of Economic Affairs (now Economic Affairs, Agriculture and Innovation) on the reduction of administrative fines in connection with cartels
• Read more about leniency

• Policy rules of the Minister of Economic Affairs on the imposition of administrative fines 2009
• NMa Policy rules on administrative fines under transport legislation
• NMa Interest payments in case of reimbursement of fines that have already been paid (in Dutch)