Recent developments regarding resale price maintenance

On 13 February 2004, the administrative court of the District Court of Rotterdam rendered a judgment between Secon Group BV against the Director-General of the Netherlands Competition Authority (NMa), whereby Chilly BV and Basilicum BV have presented themselves as interested parties in these proceedings.

As stated, this concerns a ruling on resale price maintenance in which the Court endorses the practice as it has been shaped by the NMa for some time 1).
This case primarily concerned the fact that Secon, which markets the jeans brand G-Star, among other things, refused at some point to supply Basilicum and Chilly because they did not agree with the resale prohibition as laid down in the general terms of Secon was included. In response to this, both parties submitted a complaint to the NMa in 1998. The NMa, in turn, not only assessed the general terms and conditions on the aforementioned point, but also commented on the (minimum) recommended prices included in the general terms and conditions. The NMa ruled that both the resale ban and the ‘recommended’ prices were in violation of Article 6 of the Competition Act (Mw). After Secon lodged an objection against the aforementioned decision, which decision was subsequently upheld by the NMa, Secon lodged an appeal on 28 January 2002 with the District Court of Rotterdam. As stated, minimum recommended prices were included in the general terms and conditions, with one version of the general terms and conditions stipulating that this was not allowed to be deviated from, unless written permission was given by Secon. Another version stipulated that markdowns were not allowed without Secon’s permission.

The Court is of the opinion that the minimum recommended prices are anti-competitive in nature due to the fact that they affect the company in essential aspects of its business policy. The Court therefore ruled that there was prohibited resale price maintenance. The fact that there was also a resale ban reinforced the fact that there was an impermissible violation of company policy. With regard to the question of whether the general terms and conditions are a unilateral legal act or whether this should have been regarded as an agreement, the Court notes that not only agreements fall within the scope of Article 6 Mw, but also mutually agreed facts and behaviour. The Court therefore rules that general terms and conditions also fall under 6 Mw. With regard to the question of whether the anti-competitive provisions also have an appreciable effect, the Court notes that this is irrelevant since these are hardcore restrictions from which no deviation may be made in any case. Reference is made to the settled case law of the Court of Justice.
1) See also current affairs competition law number 4/May 2004 with the note from RM

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