Not only your company must pay the fine!
Competition law is becoming increasingly important, particularly now that the Dutch Competition Authority (‘NMa’) has been given more competences to tackle violations of the Dutch Competition Act (‘Mededingingswet’).
One of these competences is to impose individual fines on
persons involved in violations or alleged violations. These
individual fines cause competition law to intersect with employment
law.
'Personal fines'
Apart from the competence to impose a fine on undertakings
that have violated the Dutch Competition Act, the NMa has been able
to fine employees and former employees who are unwilling to
cooperate in an investigation conducted by it for several years.
Furthermore, as of 1 October 2007, the NMa is authorised to fine
individuals who were involved in cartels by, for example, giving
instructions to create or lead a cartel or by violating the prohibition of
the abuse of a dominant
position. Undertakings may be fined up to 10% of their
consolidated annual turnover, while employees and former employees
may be liable to pay up to EUR 450,000. Relevant in this respect is
the leniency programme.
Leniency programme
The NMa (and the European Commission if European
competition law is at stake) can grant immunity or a reduction of
the imposed fine to an undertaking if it has been involved in a
cartel. One of the conditions for leniency is that the undertaking
or individual applying for leniency acknowledges its/his violation
of competition law. Furthermore, it/he will have to cooperate fully
in the Competition Authority's investigation of the cartel. In
respect of the NMA's competence to impose personal fines, the catch
is that the leniency programme now also applies to employees and
former employees.
Due to the possibility of personal fines, it is likely that
(former) employees will be more proactive in reporting a violation
or alleged violation of competition law to the NMa rather than to
their own (ex) employer.
This may have extremely negative consequences for the undertaking
involved. When a (former) employee applies for application of the
leniency programme to the NMa to avoid paying a fine of up to EUR
450,000, there is a more than significant chance that his or her
employer or former employer will be fined. These fines can amount
to several millions of Euros. This 'race for amnesty', as it were,
could make employment relationships within organisations extremely
tense.
How to tackle the race of amnesty
Undertakings must therefore be extremely alert in ensuring that
they do not cross any competition law boundaries. A key
responsibility for undertakings is to reduce the risk that they
and/or their employees infringe (Dutch) competition law. As part of
this responsibility they must inform their employees of the do's
and don't's in their daily business practices with regard to
competition law, for example by creating a competition compliance
programme. Such programmes can be customized to the undertaking
concerned. Furthermore, it is advisable for undertakings to have a
clear set of rules for their employees in case they violate (Dutch)
competition law. Prevention is the better medicine than curing a
violation.
For more information regarding this subject please contact Sabina
Smallegange.