The prohibition on cartels
As of September 1, 2017 the prohibition on cartels applies to all domestic and foreign companies which are active in Curaçao. The prohibition on cartels applies to the following types of market behavior that hinders, restricts or distorts competition:
- agreements between companies;
- concerted practices; or
- decisions of associations of undertakings.
There are also exceptions to the prohibition on cartels. You can read more about the prohibition on cartels and exceptions thereto on this page.
The interpretation of the term “agreement” is extensive. An agreement does not have to be put down in writing but can also be informal or tacit. For example, a verbal gentlemen’s agreement. An agreement only requires consensus on the commercial practices of the companies concerned. The concept “concerted practice” is even broader. When (potential) competitors share commercial information and subsequently adjust their market behavior based on this information, this is considered to be a concerted practice.
Below, we will use the term agreement for all types of market behavior that may fall under the prohibition on cartels.
Both horizontal and vertical agreements may fall under the cartel-prohibition. A horizontal agreement is an agreement between companies that are actual or potential competitors. A vertical agreement is an agreement between companies that are active at different levels in the production chain, such as an agreement between a manufacturer and a wholesale company.
Article 3.1, second paragraph, of the National Ordinance on Competition [in Dutch: Landsverordening inzake concurrentie] comprises several types of agreements which are always in violation of the prohibition on cartels. These hardcore violations severely damage consumer welfare. The following types of agreements between competitors are deemed to be hardcore violations:
- setting selling prices or other terms and conditions of sale;
- setting prices or other bid conditions in tendering processes (bid-rigging);
- limiting or controlling production or sales, including concerted refusal to deal; or
- market sharing, such as clients or regions.
The Fair Trade Authority Curaçao gives high priority to detecting and ending these types of agreements.
Exceptions to the prohibition on cartels
In principle, the National Ordinance on Competition does not make exceptions for hardcore violations. For other kinds of agreements, the prohibition on cartels provides for the following three exceptions:
- De minimis – If the market share of the companies concerned is less than 30%, the prohibition on cartels does not apply in principle.
- Exemption from the prohibition on cartels – Sometimes agreements can contribute positively to the economic development of Curaçao if their advantages outweigh the restriction of competition. Companies that have concluded such agreements, may apply for an exemption from the prohibition on cartels at the FTAC. The involved companies should prove in that case that they meet four cumulative requirements. You can apply for an exemption from the prohibition on cartels by completing the application form for exemption from the prohibition on cartels.
- Block exemption – A block exemption means that certain categories of anti-competitive agreements are exempt from the prohibition on cartels by national decree [in Dutch: Landsbesluit]. This should regard categories of agreements whose benefits in general outweigh their drawbacks. This is the case if the same four requirements are met, which apply to obtain exemption. As yet, there are no block exemptions in force.