The Dutch Competition Authority ends its investigation into a possible wage-fixing cartel between Dutch supermarkets

Following unsuccessful negotiations with the labour unions, Dutch supermarkets allegedly entered into an agreement in which they limited a pay increase of their employees to 2.5 %. The ACM presumed that the supermarkets entered into the agreements because of the failed attempt to come to a collective labour agreement. The trade unions had no part in the arrangement, which for the ACM was proof of a potential cartel. Recently the supermarkets did however succeed in concluding a collective labour agreement with the trade unions, which retroactively covered the arrangement on the limited wage increase between the supermarkets of February of this year. Consequently, the ACM saw no purpose in continuing its investigation.

In its announcement, the ACM refers to the legal framework on collective labour agreements. It states that agreements on labour conditions between competitors have as their object the restriction of competition between employers, especially where there are concerns regarding the recruitment and retention of employees. Such agreements are detrimental to the bargaining position of employees. The ACM continues by stating that even if a collective labour agreement is imminent, coordination between employers on wages and other labour conditions are contrary to competition law. The rationale for this being that up until a collective labour agreement is formed, individual employees are themselves best suited to negotiate and individual employers can unilaterally decide to increase wages. This is especially true in times when markets are characterised by labour shortage. Importantly, the ACM stresses that competition law applies when negotiations for a collective labour agreement have either permanently or temporarily ceased.

The ACM’s approach is in line with the exception for collective labour agreements in article 16 of the Dutch Competition Act, which codifies the case law of the Court of Justice of the EU. In its Albany-judgment the Court of Justice held that the collective bargaining between workers and employers can take place without causing any competition law concerns.

What strikes us as odd is the fact that the ACM sees reason to end its investigation because a subsequent collective labour agreement covers the alleged cartel agreement between the employers, while emphasizing that wage-fixing arrangements between employers outside the scope of a collective labour agreement are incompatible with competition law. This could suggest that employers can be excused from violating competition rules as long as they succeed to afterwards conclude a collective labour agreement that covers their unlawful behaviour. Albeit odd, we do not believe the ACM wishes to encourage employers to pre-empt collective labour agreements by coordinating wages and other labour conditions amongst themselves. We believe ACM’s decision to end the investigation under the given circumstances is grounded on prioritising of resources instead.

For more information contact Pauline Kuipers & Matteo Stainer