Below threshold review: ACM calls in transaction for potential abuse of dominance

On Friday 7 March, the Netherlands Authority for Consumers and Markets (the ACM) announced that it was investigating the acquisition of the Dutch branch of the German company Ziemann by competitor Brink’s. The ACM cannot use the regular merger control rules to investigate the transaction because the notification thresholds are not met, but it is relying on potential breaches of competition law.

This investigation amounts to the first time the ACM decides to review a concentration below the thresholds under other provisions of competition law. The Dutch Competition Act (Mededingingswet) contains a provision (Article 24(1) Competition Act) which explicitly states that “the bringing about of a concentration within the meaning of Article 27 of the Competition Act does not amount to the abuse of a dominant position.” It seems surprising that, notwithstanding this provision, the ACM does not feel restricted to investigate the transaction, at least when it comes to the abuse of dominance provision.

Although the ACM has indicated that it will review this concentration for a potential breach of competition law (in the broad sense), it has also explicitly stated that it will consider whether the prohibition on abuse of dominance has been infringed. The ability to review concentrations that are not notifiable under the national abuse of dominance provision has been confirmed by the Court of Justice in its Towercast ruling of 2023 (see our previous blog post on this topic).

This is an interesting development which fits seamlessly with the recent trend in the Netherlands – and Europe more generally – that the ACM is considering more creative theories of harm, is focused on roll-up transactions, below-the-threshold deals, and is actively calling for increased powers (such as a new competition tool and a call-in power).

Brink’s / Ziemann – What is the transaction about?

Brink's and Ziemann are both active in the transport of cash, for instance to and from brick-and-mortar stores, ATM machines and banks. In its press release, the ACM notes that it has had concerns about the “cash-in transit market” for a while. The ACM notes that the market is characterised by a limited number of market participants, among which Brink’s is one of the (if not the) largest. As a result of the transaction, Ziemann will exit the market as an independent player.

The ACM notes that it cannot exclude – and so wishes to investigate – that the transaction could result in higher prices, reduced quality of service, and reduction in innovation. The parties had not notified their deal to the ACM because it fell below the notification thresholds. 

In its press release, the ACM notes that “since real concerns about competition do exist at first glance, ACM will now investigate whether or not the competition rules have been violated, including the prohibition on abuse of dominance. The investigation will reveal whether or not a violation has indeed been committed.”

Review of non-notifiable transaction fits within recent trends

This investigation fits within the recent trend in the Netherlands, and Europe more generally, that competition authorities are considering and applying increasingly creative ways to review non-notifiable concentrations that raise prima facie competition concerns. Over the past few years, we have seen the renaissance of Article 22 EUMR, amendments of merger control regimes across Europe, the introduction of a new competition call in various national jurisdictions, and indeed the application of the Towercast doctrine (e.g. review of Proximus/EDPnet transaction by the Belgian competition authority).

In the Netherlands specifically, the ACM has called for an increase in powers, by way of a new competition tool (see blog by ACM chairman Snoep, and a recent speech on the same topic), and has actively called out the inherent issue of “serial acquisitions” or “roll-ups” (see blog by Snoep). The ACM has also actively called for a new “call-in” power that would allow the ACM to call-in transactions that may raise competition issues in the Netherlands and/or refer them to the European Commission (see recent press release).

As of the beginning of the year, the ACM has also slightly changed its notification procedure by introducing a so-called “intake form” where parties need to list acquisitions over the past years, enabling the ACM at an early stage to determine whether a concentration could fit within a roll-up strategy (and thus require increased scrutiny).

Finally, the ACM cleared a roll-up transaction only a few weeks ago. This transaction (Foresco/DWP/Vierhouten) was the first case where the ACM opened an in-depth investigation given the inherent nature of the deal (being a roll-up case). In its press release on the clearance of that deal, the ACM noted that Foresco had become the market leader by making small acquisitions, and that “a series of smaller acquisitions can have the same harmful effects on competitors, buyers, and consumers as a single major acquisition can.”

Conclusion

Last week’s developments are further evidence of the new policy and priority the ACM has with respect to the review of concentrations. Merging parties should carefully consider whether their transaction may have a prima facie impact on competition, and how to best proceed in the Netherlands, even if the merger control notification thresholds are not met.

For further information, or in case of questions, please feel contact any of the authors.