• The Dutch Competition Authority has Imposed Fines on The Management Firms of Investment Funds for Anticompetitive Practices Committed By Companies in Their Portfolios
  • April 23, 2015
  • Law Firm: Dentons Canada LLP - Toronto Office
  • On December 30, 2014, the Dutch Competition Authority for the first time ordered management firms to pay fines of between €450,000 and €1.5 million for their involvement in the “packaged flour” cartel.

    The Dutch Authority imposed sanctions on these management firms because in the case at hand they exercised a decisive influence on the companies who participated in the packaged flour cartel. These fines were imposed despite the fact that investment funds held these companies on a temporary basis and that the management firms were not aware of the anticompetitive practices.

    The Dutch Authority’s position is in line with the decision of the European Commission concerning the investment bank Goldman Sachs (GS), which was condemned for the anticompetitive behavior of one of the companies owned by its investment fund GS Capital Partners. The European Commission specified at the time the criteria for the existence of a decisive influence allowing the management company’s liability to be incurred, noting in particular that GS actively participated in the management of the company in question and received monthly reports on the company’s activity.

    Thus, the management firms of investment funds are in no way protected from the risks related to competition law when they exercise a decisive influence on the companies that their funds hold. Consequently, they will have to use suitable monitoring tools to ensure that antitrust regulations are respected by companies in their portfolio.