Netherlands: Dutch ACM clarifies possibilities of self-employed workers to negotiate working conditions collectively

The Dutch Authority for Consumers & Markets (ACM) issued new Guidelines regarding price arrangements for self-employed workers (the Guidelines). The Guidelines specify the circumstances in which self-employed workers can negotiate collectively about prices and other (working) conditions without violating the cartel prohibition of the Dutch Competition Act. The Guidelines also explain situations in which the ACM will not impose fines.

1. Background

In the recent years, the labour market has become more flexible, with an increasing number of self-employed workers. This development has raised concerns, for example about the vulnerable position of self-employed workers, because they often have a weak bargaining position leading to unfavourable terms of employment.

By offering services, products and independently determining their prices, self-employed workers would qualify as ‘undertakings’. Competition law therefore also applies to self-employed workers. The application of competition law to self-employed workers has nevertheless not always been clear. On the one hand, if self-employed workers agreed on (minimum) rates, then this would qualify as prohibited "price agreements". It does not matter whether these agreements are concluded between self-employed workers or collectively imposed on third parties and thereby strengthening the position of the self-employed worker. On the other hand, certain categories of self-employed workers do not actually bear the financial and commercial risks and they would rather qualify as employees (also called as ‘false self-employed’, schijnzelfstandige). This would mean that competition law does not apply to them.

The ACM therefore provides clarity about the scope of the Dutch Competition Act regarding arrangements aimed at improving the position of self-employed workers. These Guidelines replace the 2020 guidelines regarding price arrangements of self-employed workers. The old Guidelines needed to be updated after the European Commission published its Guidelines on collective agreements of self-employed people. These Commission Guidelines clarify under which circumstances self-employed people can negotiate their working conditions collectively without the risk of EU competition law standing in the way.

2. The Guidelines

The Guidelines are divided into three parts: a) application of competition law on self-employed workers, b) types of agreements on which competition law does not apply and c) how the ACM will monitor its Guidelines.

a. Application of competition law on self-employed workers

In the first part of the Guidelines, the ACM provides a general framework for the application of competition law for self-employed workers. The ACM explains in which situations competition law does not apply at all. This is in the case of the bagatelle exception (Article 7 of the Dutch Competition Act) and the exception for efficiency improvements (Article 6 (3) Dutch Competition Act).

The bagatelle exception applies in two situations: i) if no more than eight undertakings participate in the agreement, with a joint total turnover not exceeding EUR 1.1 million, or ii) the combined market share of the self-employed workers does not exceed 10%. With regard to Article 6 (3) of the Dutch Competition Act, the ACM considers certain restrictions of competition justifiable if they objectively contribute to achieving a higher level of consumer welfare and the efficiencies outweigh the restriction of competition. For the application of this justification in this context, the ACM specified four cumulative conditions:

1. The arrangements safeguard an objectively justified level of social protection;
2. Without the arrangements, the level of protection cannot be established, and the arrangements do not go beyond what is necessary to achieve this objective;
3. The direct and indirect buyers will get a fair share of the benefits of the arrangements; and
4. There will be sufficient room for competition between self-employed workers.

The ACM furthermore explains that competition law does not apply to two specific groups of self-employed workers. First of all, self-employed workers that are part of an economic entity can negotiate about working conditions within that entity. An economic entity exists when the members structurally pursue a joint economic goal, and the individual members cannot freely decide on their market behaviour. Secondly, competition law does not apply to agreements made by the false self-employed. False self-employed workers do not qualify as an undertaking, but as an employee if:

1. They act under the supervision of their employer with regard to working hours, place, and the content of their work;
2. They do not bear commercial risks; and
3. For the duration of the contractual relationship, they form part of that employer’s undertaking.

b. Types of agreements on which competition law does not apply

In the second part of the Guidelines, the ACM explains that competition law does not apply to agreements between certain categories of self-employed workers and their clients. With reference to case law of the European Court of Justice and Article 16 of the Dutch Competition Act, the ACM reiterates that collective labour agreements fall outside the scope of the cartel prohibition if the collective labour agreement is the result of a social dialogue and if the workers concerned are false self-employed workers. The ACM notes that this exception does not apply to self-employed workers that qualify as undertakings.

The ACM explains that collective agreements fall outside the scope of the cartel prohibition if they are concluded by the self-employed worker who:

1. is economically dependent on their client,
2. works de facto side-by-side with employees, or
3. works through a digital labour platform.

With those three categories, the ACM aligns with the Commission Guidelines. Self-employed workers that fall within one of these categories are allowed to collectively negotiate with clients about their renumeration and other working conditions.

c. Monitoring by the ACM

The ACM lastly explains how it will monitor its Guidelines. The ACM sets out two situations in which it will not impose fines. Firstly, the ACM will not impose any fines if self-employed workers have insufficient bargaining power vis-à-vis their clients. Secondly, the ACM will not impose fines in case of arrangements regarding working conditions, and price arrangements in particular, which aim to protect the required level for being able to economically support oneself.

3. Conclusion

In summary, these Guidelines provide clarity for self-employed workers to negotiate about rates and other working conditions. One of the key takeaways is that the cartel prohibition does not apply to ‘false self-employed’ workers. Furthermore, workers that are in situations similar to those of employees are allowed to negotiate about rates and other working conditions. It is important to note that the ACM Guidelines need to be assessed on a case-by-case basis.

For more information, please contact Pauline Kuipers, Reshmi Rampersad and Sander Wagemakers.

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