Ban on abuse of a dominant position
Is your business a major player in your sector? You may hold a dominant position. The Dutch Competition Act (Mededingingswet) prohibits companies from abusing a dominant position. If a company does abuse its dominant position, the regulatory body may impose a fine.
What is a dominant position?
Your company is considered to hold a dominant position if:
- you have no competitors
- your competitors are very small
- you do not have to take your customers or suppliers into account
If your company holds a dominant position you may still compete with other companies, but you cannot abuse your dominant position.
What is abuse of a dominant position?
Abuse of a dominant position is if your company harms the competitive position of your competitors (in Dutch). There are various types of abuse, such as:
- Predatory pricing or price squeezing: a company offers products below cost with the aim to reduce or stop competition.
- Unreasonable high pricing (excessive prices): you ask unreasonably high prices from customers due to a lack of competition .
- Tying: you offer a product or service together with another product or service as a condition for the purchase.
- Refusal of supply: you may only refuse to supply products or information to certain purchasers if you have a valid reason and it does not cause financial harm to these purchasers. However, your competitor may not be prevented from performing their services or supplying products because of your refusal to supply.
- Exclusive purchasing: if a dominant company requires buyers to purchase all units of a particular product only from them.
- Favour own services by online platforms: an online platform may not advantage their own services by, for example, increasing their visibility relative to other services.
The Netherlands Authority for Consumers and Markets (Autoriteit Consument en Markt, ACM) may impose fines if abuse is identified.
Reporting abuse of a dominant position
Do you think a company abuses its dominant position? You can report abuse to the ACM.