This article was published on www.maverick-law.com
The Netherlands Authority for Consumers and Markets (“ACM”) wishes to make it easier for companies to work together in the field of sustainability. Companies will be given more room for manoeuvre particularly in order to achieve climate targets, such as reducing CO2 emissions. That intention is set out in the (draft) Guidelines on Sustainability Agreements.
The Guidelines describe how companies can make agreements aimed at increased sustainability of the economy and society. Sustainability comprises environmental protection, biodiversity, climate, public health, animal welfare and fair trade. Sustainability agreements are aimed at making more economical (more efficient) use of raw materials, reducing pollutants and waste, and otherwise limiting the harmful impact of economic activities on people, animals, the climate, the environment or nature. Essentially, sustainability agreements are intended to make a positive contribution to the economy, according to ACM.
The cartel prohibition (Article 101 of the TFEU and Article 6 of the Dutch Competition Act) prohibits agreements between companies that restrict competition. In the Guidelines, the ACM distinguishes three opportunities in which sustainability agreements do not come under the prohibition. The first opportunity relates to sustainability agreements that have no or hardly any impact on important competition parameters, such as price, quality and innovation. Sustainability agreements that are solely aimed at promoting product quality, product diversity, innovation or market introductions of new products will, in most cases, actually promote competition.
The second opportunity relates to agreements that do restrict competition but that also give rise to benefits that outweigh that effect and are therefore exempt (Article 101(3) of the TFEU and Article 6(3) of the Dutch Competition Act). The benefits for society as a whole may then be taken into account if the agreements in question help to achieve specific climate targets by which the government is bound. In the past, the benefits had to outweigh the disadvantages for the users. Other sustainability agreements do still require that the users are fully compensated. A qualitative substantiation of the pros and cons may suffice. That is the case if the companies in question have a market share of less than 30% or if it is obvious that the benefits outweigh the disadvantages. In the past, those pros and cons had to be quantified.
The third opportunity consists of consultation with the ACM. ACM expects that companies and trade associations will comply with the Guidelines as closely as possible or will consult with ACM and, if necessary, make changes to their agreements. In that case the ACM will not impose fines. If an agreement cannot be brought in line with the competition rules, the Wetsvoorstel ruimte voor duurzaamheidsinitiatieven (Scope for Sustainability Initiatives Bill) will in the future make it possible for companies to have their sustainability agreements approved by order in council via the Minister of Economic Affairs and Climate Policy.
The European Commission welcomes this initiative and has stated that it must be clarified whether agreements aimed at reducing CO2 emissions are in keeping with competition law. In light of the review of the Horizontal Block Exemption Regulations and the Guidelines on Horizontal Cooperation Agreements, the Commission is currently investigating to what extent the European regulations need to be amended. Until that time companies are therefore home free only in the Netherlands and only if they comply with these conditions of the ACM.
This blog was also published on Mr-online.nl
An earlier blog on circular agriculture, sustainability and the cartel prohibition can be found here: https://www.maverick-law.com/en/blogs/circular-agriculture-sustainability-and-the-cartel-prohibition-power-to-the-farmer-.html.
Information on dawn raids by ACM or the European Commission can be found at invalacm.nl