This is the translation of the judgment.
“HEM”, Plaintiff, v. Defendant sub 1 “ CBL” and Defendants sub 2 through 4 “Jumbo” (in singular form).
1. The procedure
1.1. The progress of the procedure appears from:
- the summons of 13 April 2015 with exhibits;
- CBL’s statement of defence;
- the statement of defence with exhibits of Jumbo;
- the interim judgement of 22 July 2015 whereby an appearance of parties is requested;
- The report of the appearance of the parties on 18 January 2016 and the documents mentioned therein.
1.2. Lastly, a date to deliver the judgement has been set.
2. The facts
2.1. HEM’s objective is to contribute to the sustainable and responsible resolution of social matters through innovations.
2.2. Jumbo is part of the Jumbo group, which is primarily active in the area of foodstuffs and food retail. In addition, it provides services to franchise holders who operate Jumbo supermarkets. In 2012, Jumbo took over the supermarket chain C1000.
2.3. CBL is a trade association of supermarkets and food service companies including almost all active supermarkets (Jumbo included). CBL members control almost 95% of the supermarkets in the Netherlands via own stores/branches and franchise agreements.
2.4. CBL uses a Competition Code which states among others: “participation in meetings, retreats or activities organised by CBL is always voluntary. Any recommendation or advice resulting therefrom is never more than a recommendation or advice: every member of CBL retains at all times the freedom to determine its own policy or to make decisions in all aspects.”
2.5. In terms of volume and sales, most alcoholic beverages and tobacco is sold in supermarkets.
As a result, supermarkets are considered providers of these products within the meaning of the Licensing and Catering Act [Drank- en Horecawet (DHW)] and the Tobacco Act. Based on these laws, it is forbidden to provide alcoholic beverages and tobacco, commercially or otherwise, whether or not free of charge, to persons for whom it has not been determined that they have reached the age of eighteen (until 1 January 2014 the age of sixteen). The age verification takes place based on an identification document. It can only be waived if it concerns a person who unquestionably has reached the age of eighteen (until 1 January 2014 the age of sixteen). The prohibition to sell to underage consumers is hereinafter also referred to as “the provision ban”.
2.6. In 2007, HEM developed the so-called Ageviewer system, which can be used for the age verification. When using the system, an automatic cash register block takes place with every potential purchase of alcohol or tobacco . The cash register will only unblock after a remote age verification carried out by an employee working in HEM’s Verification Center in Breda has taken place.(hereinafter: the verification employee). The remote verification starts by taking a digital image of the customer at the cash register. This image is then displayed on the screen of the verification employee who is to determine whether or not the potential customer has reached the age of eighteen (until 1 January 2014: the age of sixteen). Should that be the case, the cash register will be unblocked and the purchase of the products will be allowed. If the potential buyer has not without doubt reached the age of eighteen (until 1 January 2014: the age of sixteen), he will be asked to place his ID on the terminal. A scan of the ID is then sent to the Verification Center, where the verification employee assesses the validity of the ID based on the received image. The sale of alcohol or tobacco is permitted only after authorisation from the Verification Center. .
2.7. The introduction of the Ageviewer system to the market took place in the fall of 2007.
2.8. Following a pilot, in which leading supermarket franchises participated, C1000 announced the start of the implementation of the Ageviewer system within its stores through a press release on 11 April 2008 titled “C1000 introduces failsafe age verification for alcohol and tobacco sales. However, the implementation of the Ageviewer system was cancelled later on.
2.9. On 2 March 2009, CBL launched the campaign Noggeen20 (hereinafter: the campaign) after that its members approved the content thereof during the member meeting of 12 June 2008. The website of CBL states the following about the campaign: “Every supermarket participates. It is an industry agreement to which all supermarkets have committed.”
2.10. For this campaign, CBL adapted the existing training for cashiers, “Sometimes you must sell no”, to the new age requirement. During the training the employees have the opportunity to practice how to comply with the rules for the sales of alcohol and tobacco. In addition, CBL distributed CD-
ROMS containing information about the identification requirement up to the age of twenty and the law regarding the sale of alcohol and tobacco. Campaign materials, such as cash register stickers and brochures were distributed as well.
2.11. In 2012, the CBL-Code “Responsible alcohol sales in the supermarket” was published. It was subsequently amended in 2013 and 2014. These three versions of the codes are hereinafter jointly referred to as “the Code”.
2.12. The Code is based on a guide written by CBL and the Nederlandse Voedsel en Warenautoriteit [Netherlands Food and Consumer Product Safety Authority] in the context of a pilot that took place in 2010, which reviewed whether the inspection method for compliance with the hygiene requirements could also be used for the compliance with the Licensing and Catering Act. The conversion of that guide into the Code reflected the desire to establish minimum standards within the supermarket industry in order to ensure compliance with the legal requirements for the sale of alcohol and tobacco.
2.13. The Code was created by CBL’s Alcohol and Youth Project Group. CBL presented the Code to its members with the request that they commit to it. All members expressed their support and commitment to the provisions of the Code.
2.14. The introduction of the Code contains the following statement: “(the code) describes what measures the supermarkets shall take to meet these requirements (from the Licensing and Catering Act, addition by the court). All members of CBL commit to this Code and consider the measures provided therein as the minimum standard for the responsible sale of alcohol. In addition to the requirements in the Code, supermarkets can also take chain-specific measures”.
2.15. Part 3 of the Code, titled “Translation legal requirements” states , insofar relevant: “In order to meet the legal requirements, supermarkets shall take measures in their work processes with regard to the point of sales and the sales transaction.( . . . )
3.2 Sales transaction
3.2.1 Age limits
"Supermarkets shall not sell alcohol to youth that have not yet reached the age of 16. In order ascertain that the customer is old enough to purchase alcohol, the cashier shall request customers younger than 20 for their ID when purchasing alcohol. (...)” In the Code of 2014, these ages were raised respectively to age 18 (sales) and age 25 (verificationage).
2.16. The versions from 2013 and 2014 of the Code also state in part 3: “3.2.3 Tools The performance of the age verification consists of four steps: estimate the age (up to age 25), request an ID, calculate the customer’s age based on the date of birth indicated on the ID, and lastly permit or refuse the sale. The first two steps (behaviour) are extensively addressed in trainings and instructions. Tools are provided for the faultless determination of the age. In this way the last step, correct sales, can always be performed properly.”
2.17. Part 4 of the Code, titled “From the law to the work floor” provides , insofar relevant: “In order to ensure that the law is observed, the employees are properly equipped for their task. In this way the compliance with age limits is made easier.
4.1 Instruction of personnel
The instruction of the personnel is essential for the proper execution of the procedures. With this the foundation is laid for the compliance with age limits.
4.1.1 Training
Everyone who performs cash register duties shall be trained. CBL’s training “Sometimes you must sell no” can be attended and tested via the website www.supermarkt.nl. Instead of the CBL-training, supermarkets can develop an equivalent training and test time.
4.1.2 What must the cashier know and be able to do?
After training and instruction, the cashier:
- knows that customers up to age 25 must be asked for ID when purchasing alcohol;
- knows in which way he must verify if the customer has reached the required age;
( . . . ) ”
2.18. In addition to the cashier training mentioned in paragraph 2.10 and CBL’s instructions, various other tools are available to support the age verification i.e. the calculation tool developed by CBL, the so-called “age disk”, ID scanners, and attention signals in the cash register system, such as a sound alert and a block of the cash register when alcohol or tobacco is presented to the cashier.
2.19. Following a report about a possible alleged violation of article 6 of the Competition Act [Mededingingswet (Mw)], the Consumer & Market Authority [Autoriteit Consument & Markt(ACM)] requested information and documents from CBL as well as a statement of its position. CBL specified that: “Supermarkets can use different tools to avoid alcohol being sold to customers under the age of 18. The Ageviewer system is one of those tools. Other tools are for example the calculation tool, the cash register block system, the Ageprint (a fingerprint system) and the ID-swiper. All existing methods and systems have advantages and disadvantages. With regard to the Ageviewer system, CBL has pointed out specifically in the past that (i) it does not prevent resale (an employee cannot judge from a distance if the alcohol is actually purchased for own consumption and (ii) customers find it unpleasant to stand in front of the camera.”
2.20. On 6 October 2014, CBL issued a press release: “(..) CBL members are completely free to determine in which way they implement the age verification with the sale of alcohol and tobacco. Furthermore, the Code is neither meant nor is it to be interpreted as a document that prescribes or excludes certain age verification systems.”
2.21. The Ageviewer system was purchased by approximately one hundred supermarkets and liquor stores that are not CBL members. None of CBL members or their franchise holders have purchased the system. In the meantime, HEM has shut down the operation of the Ageviewer system.
3. The dispute
3.1. HEM asked the court, in a as much as possible provisionally enforceable judgment:
A. to rule that the campaign and the Code are legally void;
B. to rule that Jumbo acted unlawfully towards HEM from 12 June 2008 up to today because it acted in violation with article 6, paragraph 1, Mw;
C. to rule that CBL acted unlawfully towards HEM from 2 March 2009 up to today because it acted in violation with article 6, paragraph 1, Mw;
D. to rule that CBL and Jumbo due to the actions in question are liable for damages towards HEM, and to order CBL and Jumbo severally and jointly to pay the damages suffered by HEM, to be further determined and settled in accordance with the law and to be increased with the applicable statutory interest, to be calculated from the date of this ruling until the day payment has been made in full; and
E. to order CBL and Jumbo severally and jointly liable to pay the costs of these proceedings,being the procedural costs, the extrajudicial costs and the additional costs, which costs must be paid to HEM no later than within 14 days after the date of the ruling, in the absence whereof statutory commercial interest will be due over this amount from the expiration of this period until the day payment has been made in full.
3.2. HEM argues that the campaign and the Code are intended to - or result in - restricted competition and that they are therefore void. CBL and Jumbo are thus liable by virtue of an unlawful act due to a violation of article 6 Mw.
3.3. CBL and Jumbo put forward their defence.
3.4. The parties’ arguments , insofar relevant, are further addressed below.
4. The assessment
Campaign and Code: decisions of a trade association within the meaning of article 6 Mw?
4.1. That CBL is a trade association within the meaning of article 6 Mw is not in dispute nor is it disputed that the campaign and the Code are not legally binding decisions, nor that CBL is not authorised to impose requirements on its members, as is also shown from the Code of Conduct of the Code cited in 2.4, to which it refers in this context. For a decision of a trade association to fall within the meaning of article 6 Mw, it is not required that the decision is legally binding or that it imposes any requirements. HEM rightly points out that every recommendation falls within the scope of this article , regardless of how they should be qualified legally, as long as it represents a true reflection of the desire to coordinate the behaviour of the members of the trade association.
4.2. HEM and the court believe that the campaign and the Code are a truereflection of the desire to coordinate the behaviour of CBL’s members in the respective market by standardising the way in which the age verification is performed through the implementation of minimum standards. The court reasons as follows.
4.3. The desire to coordinate CBL’s members behaviour is shown by the contents of the Code, which contains specific measures and minimum standards. Moreover, these are formulated firmly and without reservation. See for example the citations under 2.16 and 2.17. Part of the campaign is to attend the adapted CBL training “Sometimes you must sell no”. This training is also part of the Code (see “From the law to the work floor”), with the understanding that supermarkets may also develop an equivalent training and test time themselves. Thus, the CBL training or an equivalent training - and the method taught there - is the (minimum) standard. The above demonstrates CBL’s desire to coordinate its members’ behaviour in the respective market.
4.4. This is also shown from the way the campaign and the Code came into being i.e. both came into being during member meetings and are binding in nature. All members of CBL have expressed their support and commitment to the provisions of the Code. The above illustrates CBL’s efforts in ensuring that all its members implement and accept the Code as minimum standard for the sale of alcohol and tobacco.
4.5. The standardising character of the Code is further shown by the fact that all members consider the measures provided therein as the minimum standard for the responsible sale of alcohol and tobacco (see 2.14).
4.6. The above is further confirmed by the fact that CBL’s campaign is regarded as “a directive for CBL members to comply with the law” (statement of defence paragraph 3.8) and the Code as a “form of self-regulation” (statement of defence paragraph 3.7). This self-regulation concerns the majority of the supermarkets in the Netherlands, since the members control about 95% of the supermarkets in the Netherlands via own stores/branches and franchise agreements, and in terms of volume and sales most alcoholic beverages and tobacco are sold in supermarkets.
4.7. CBL refers to the press release mentioned under paragraph 2.20 and emphasises that its members are free to disregard the Code and to take other measures. If, and to what extent, the Code is to be followed is however not a determining factor when assessing whether a decision of a trade association falls within the ambit of article 6 Mw. However, the compliance - just like control and coercion - forms a clear indication of the presence of the desire of the trade association to coordinate the behaviour of its members in the respective market. In this context it is important to stress that none of CBL members use the Ageviewer system, while around a hundred non-CBL members do. Campaign and Code: agreements within the meaning of article 6 Mw?
4.8. It is not disputed that Jumbo is an undertaking within the meaning of article 6 Mw. Just like other CBL members - who control the supermarkets in the Netherlands and together in terms of volume and sales sell most alcoholic beverages - Jumbo has agreed and committed to the campaign and the Code, which, as outlined above, represents the expression of the joint desire to behave in a certain way on the market. Moreover, the Code was prepared by a CBL project group (which by the way was aware of the existence of the Ageviewer system). Thus the campaign and the Code are agreements within the meaning of article 6 Mw. The fact that Jumbo, as it emphasises itself, felt free not to comply with the campaign and the Code, and in practice did not do so fully, does not lead to a different conclusion.
Competition-restricting campaign and Code?
4.9. The next point at issue is whether or not the campaign and the Code, as HEM argues, have a competition-restricting object . The court answers this question affirmatively. Thus, the court does not follow CBL and Jumbo in their argument that the campaign and the Code leave supermarkets entirely free to choose how the age verification is to be performed. In this context, the court reasons as follows.
4.10. The court first addresses the three distinctive steps when performing the age verification. These consist consecutively of:
i) the offering for sale of alcohol or tobacco, which requires the performance of age
ii) the performance of the age verification, by verification;
a) checking whether the customer is younger than 20 (and from 2014: 25),
b) in all cases where the customer is not without doubt older than that age, ask for an ID and
c) to check the ID for relevant authenticity and validity characteristics;
iii) whether or not to complete the alcohol or tobacco sale.
4.11. When using the Ageviewer system, the cash register in step i) is blocked in all cases and the age verification takes place as described under paragraph 2.6. Thereby step ii) sub a) takes place remotely. If the customer is not without doubt older than 20, the cashier will subsequently ask for the ID (step ii) sub b)), after which step ii) sub c) is performed remotely again, by verification of the ID held in front of the screen. Step iii) is performed again by the cashier.
4.12. The Code states (under paragraph 3.2) that the cashier performs the sale. CBL and Jumbo are correct that this mere information does not affect the use of the Ageviewer system: the alcohol or tobacco to be purchased is each time presented to the cashier (step i)), who ultimately completes or does not complete this transaction (step iii). In addition, the Code (under 3.2.1) states that the cashier shall ask a customer who is not without doubt older than 20 for an ID (and from 1 January 2014 older than 25). This is step ii) sub b). CBL and Jumbo rightly argue that the cashier has to perform the same action also when using the Ageviewer system. In this regard, a literal interpretation of the provisions from the Code provides room for the Ageviewer system to be used.
4.13. However, the above does not alter the fact that the campaign and the Code prescribe a method of age verification by the cashier which is irreconcilable with the use of the Ageviewer system. The provisions in the Code about the training of the cashiers with the training offered by CBL - or an equivalent training developed by the supermarket itself - cannot be reconciled with the use of the system. This is because the final tests of this training - thus which all cashiers must meet – entails that the cashier must know: that customers younger than 20 (in the 2014 version: younger than 25) must be asked for their ID when purchasing alcohol, how to verify if the customer has reached the required age, and how to verify the ID for authenticity and validity. When using the Ageviewer system, however, no training is required as all these checks are performed via remote verification . The standard training is thus aimed at teaching the cashier how to perform the entire age verification, including step ii) sub a and c, being performed by the cashier. Therefore, the standard training prescribed by the Code does not align with the Ageviewer system - as step ii) sub a and c are not performed by the cashier. In light of the above, CBL and Jumbo cannot be followed entirely in their argument that the training is also relevant even if the Ageviewer system is used. Should the system be used, the training becomes to a large extent unnecessary.
4.14. The above also applies to the provisions of the Codes from 2013 and 2014, which state that assistance tools can be provided to the cashiers to determine the age of the customer (see paragraph 2.18); this would not make sense since the system uses a remote verification process.
4.15. Given the above, it is clear that the campaign and the Code by their nature restrict competition in the methods of performing age verifications. The competition-restricting object of the campaign and the Code is apparent as CBL and its members, who control the majority of the Dutch supermarkets, have committed to a standardised training, which in fact excludes the application of the Ageviewer system.
4.16. The above also applies if CBL and its members - Jumbo and the other supermarkets - did not have the subjective goal or intention, when preparing the campaign and the Code, to exclude competition with regard to the Ageviewer system by means of the standardised training of cashiers. Whether or not this is the case does not need to be addressed. The court therefore disregards CBL’s negative comments concerning the Ageviewer system.
4.17. CBL and Jumbo emphasise that the campaign and the Code “only” contain a minimum standard, on top of which chain-specific measures can be implemented (see 2.14). This argument could benefit them if the use of the system could be considered an additional measure, on top of the measures contained in the Code. The above shows that this is not the case: the campaign and the Code provide a minimum standard as well as training and assisting tools for the cashiers to perform themselves step ii) sub a and c. These steps , however, are not performed by the cashier when using the system, but by a remote verification employee.
4.18. Now that the campaign and the Code have a competition-restricting object, in their nature and apart from the concrete consequence, they form a noticeable restriction of the competition within the meaning of article 6 Mw. The further dispute concerning the effects of the campaign and the Code do not need to be addressed.
Damage probable?
4.19. HEM requests damages that have yet to be determined. HEM states that it first wants to focus the debate on the liability issue and does not want to complicate the debate unnecessarily with a time-consuming and complicated debate about the estimate of the damages generated over a period of seven years. This does not change the fact that for the assignment of this claim it must be plausible that HEM has incurred damages as a result of the campaign and the Code. HEM is not obligated to state the damages and the progression thereof concretely and specifically. However, it can be expected that HEM proves with sufficient probability that it had suffered damages as a result of the breach.
4.20. HEM states that the effect of the campaign and the Code is that they could only focus on 5% of the supermarkets that are not controlled by CBL members. As a result, it states that it has suffered millions of Euros in the form of (not limited) loss of profits and losses suffered. With this HEM has met its duty to prove probability of damages. Now that CBL and Jumbo did not conduct a specific defence about the probability of the damages stated by HEM, the requirement for referral to the damage assessment procedure has been met. However, CBL and Jumbo have argued that there are many disadvantages to the (use of) the Ageviewer system. Jumbo referred to internal documents of 6 April 2011 and 16 March 2012 (which it has submitted into the proceedings as Exhibit 1 and 2), pointing out disadvantages of the system during a pilot. These identified disadvantages of the Ageviewer system - which undoubtedly (could) have impacted the sales of the Ageviewer system, perhaps also in the case of C1000/Jumbo - shall be addressed in the estimate of the damages in a damages assessment procedure.
Final conclusion
4.21. The above means that the campaign and the Code are void and that CBL and Jumbo by virtue of an unlawful act are both liable for the damages HEM suffered due to the campaign. These damages are to be further determined in a subsequent procedure. Now that CBL and Jumbo are liable towards HEM for the same damages, they are severally and jointly bound based on article 6:102 BW. The claims A through D are awarded.
4.22. CBL and Jumbo, as the losing parties are ordered to pay the costs of these proceedings claimed under E. These are estimated at €1,594.84 (€77,84 for the writ, €613 court fee and €904 (2 points rate II) for attorney fees. For the remainder, the claim under E is rejected. It has neither been stated nor shown that there are grounds for granting extrajudicial costs. There are no grounds for a ruling on the additional costs, now that the procedural costs judgement results in an enforcement order for these additional costs (see SC 19 March 2010, ECLI:NL:HR:2010:BLI 116). There are also no grounds for the awarding of statutory commercial interest, due to the lack of a trade agreement within the meaning of article 6:119a BW.
5. The decision
The court
5.1. rules that the campaign and the Code are void;
5.2. rules that Jumbo has acted unlawfully towards HEM from 12 June 2008 until today, because it has acted in violation of article 6(1) of the Competition Act;
5.3. rules that CBL has acted unlawfully towards HEM from 2 March 2009 until today, because it has acted in violation of article 6(1) of the Competition Act;
5.4. rules that CBL and Jumbo due to these acts are liable for damages towards HEM, and orders CBL and Jumbo, severally and jointly, to pay the damages suffered by HEM, to be further determined and settled in accordance with the law and to be increased with the applicable statutory interest, to be calculated from the date of this ruling until the day payment has been made in full, and 5.5. orders CBL and Jumbo, severally and jointly, to pay the costs of these proceedings, which until this ruling are estimated at €1,594.84.
5.6. declares the ruling referred to under 5.5 provisionally enforceable;
5.7. rejects any additional or other claims.
This judgement was issued by L. Alwin LL.M., D.R. Glass LL.M. and I. Brand LL.M. and publicly announced on 9 March 2016.
