Watch out for fines regarding rate agreements between freelancers

Rate agreements between self-employed professionals fall under the cartel prohibition and are, in principle, prohibited. However, the Netherlands Authority for Consumers and Markets (ACM) describes four situations in its Guidelines on Rate Agreements for Self-Employed Professionals in which self-employed professionals may still agree on their rates together without risking a fine. Those who fall outside these exceptions face a substantial risk of fines: a cartel violation can be costly for the entrepreneur and the executives involved. Below, you can read what is permitted, where the boundaries lie, and how to make agreements safely.

Why are price agreements between entrepreneurs prohibited?

A price agreement is a form of cartel agreement and falls under the cartel prohibition of the Competition Act. The underlying rationale is that by coordinating prices, production, or the division of customers and markets, competitors eliminate mutual competition. This is detrimental to consumers and to the economy as a whole. Not only price agreements are prohibited – agreements regarding production restrictions or market division also fall under this prohibition.

The ACM monitors compliance and assesses whether an agreement constitutes a prohibited cartel agreement. Fines can be substantial. For a cartel violation, the ACM can impose a fine of up to €900,000 or 10% of annual turnover, whichever is higher. In the case of long-term cartels, this maximum can increase further. Executives who were personally involved in the violation can also be fined.

Are self-employed professionals allowed to make rate agreements together?

The short answer: usually not, but there are important exceptions. This is because the cartel prohibition applies only to undertakings. In certain situations, self-employed professionals are not considered undertakings for the purposes of competition rules, or the ACM announces that it will not impose a fine. The ACM has compiled these situations in the *Guidelines for Rate Agreements for Self-Employed Professionals* (the current version dates from 2023 and replaced an earlier version). In these guidelines, the ACM distinguishes roughly four tracks through which collective rate agreements are permitted or remain unfined.

Exception 1: self-employed persons working “side-by-side” or dependently

The cartel prohibition does not apply to those who are not undertakings. According to the ACM, self-employed professionals are treated on the same level as employees in the following situations and are allowed to negotiate their rates together:

• the self-employed person is economically dependent on his client;
• the self-employed professional effectively works “side-by-side” with employees on the payroll and is in practice hardly distinguishable from them;
• The self-employed professional works via a digital labor platform.

If a self-employed professional falls into one of these categories, mutual rate agreements may be permitted to build a stronger negotiating position vis-a-vis the client.

Exception 2: a small market share or small turnover

The cartel prohibition also does not apply to agreements between competitors with a small combined market share. The rationale is: whoever together holds only a small share of the market cannot substantially restrict competition. According to the Guidelines, the following applies to this so-called de minimis exception, among other things:

• the combined market share may not exceed 10 percent in any of the relevant markets ;
• The agreement must not adversely affect trade between EU Member States

In addition, there is a turnover threshold for small groups. If a group of up to eight self-employed professionals primarily providing services enters into agreements among themselves, and their combined annual turnover does not exceed 1.1 million euros, they do not need to first define the relevant market and the cartel prohibition does not apply in principle. The exact calculation of market share and turnover requires precision and demands a well-substantiated, pre-established market definition; always have this reviewed.

Exception 3: benefits outweigh disadvantages

The cartel prohibition may not apply when the benefits of the agreement clearly outweigh the disadvantages. For self-employed professionals, the ACM has translated this into conditions that must be met cumulatively:

• there remains sufficient room for competition among self-employed professionals;
• a fair share of the benefits flows back to direct and indirect customers and serves not only personal enrichment;
• the agreement ensures an objectively determined level of protection;
• That goal cannot be achieved in a less restrictive way

Exception 4: rate to guarantee the minimum subsistence level

Finally, the ACM announces that it will not impose fines for agreements between and with self-employed professionals regarding a minimum rate intended to safeguard the subsistence minimum – the income required for essential living. This concerns self-employed individuals who agree on a rate together that enables them to provide for their basic living expenses. If such an agreement aligns with this objective, the ACM will, in principle, not intervene. The precise lower limit and substantiation are determined on a case-by-case basis and may change over time.

Practical example: when does it go wrong?

Suppose a group of twelve independent photographers in the same region agrees on a joint hourly rate via a group chat and promises not to undercut each other. None of them is economically dependent on a single client, they do not work alongside employees, and their combined market share in the regional market exceeds 10 percent. Such an agreement falls outside all four exceptions and is, in principle, a prohibited cartel agreement.

If, on the other hand, that same group consisted of at most eight self-employed individuals with a combined turnover of less than 1.1 million euros, then the de minimis exemption might well offer protection. The difference therefore lies in the facts and the figures – and that is precisely where things go wrong in practice. You should therefore have any agreement that is “on the edge” legally reviewed in advance.

What are the risks if you do it wrong?

Anyone making price agreements outside the exceptions risks an ACM investigation and a hefty fine (up to 900,000 euros or 10% of annual turnover, and more for prolonged violations). In addition, a prohibited agreement may void , involved directors face personal risk, and reputational damage may result. The exceptions are subject to strict scrutiny , and the ACM exercises active supervision. An agreement that just falls outside the rules is therefore a real risk.

Step-by-step plan: how to make secure pricing agreements

1. Determine your position. Are you economically dependent, do you work side-by-side, or via a platform? Then your situation may fall outside the cartel prohibition.
2. Calculate the thresholds. Does the combined market share remain below 10%, or does it involve a maximum of eight self-employed professionals with a combined turnover of less than 1.1 million euros? Substantiate this carefully and define the market definition in advance.
3. Assess the objective. Is it about the subsistence minimum or about demonstrable benefits for customers? Document this.
4. Have it legally checked. A legal expert assesses the agreement against the Guidelines and records it in a legally sound cooperation agreement.

Are you unsure whether your appointment is permitted? Our corporate will assess the situation and help you avoid a fine.

Frequently asked questions about rate agreements between freelancers

Are rate agreements between self-employed professionals always prohibited?

No. In principle, they fall under the cartel prohibition, but the ACM describes four situations – working side-by-side or dependently, a small market share or low turnover, decisive advantages, and safeguarding the minimum subsistence level – in which agreements are permitted or remain unpenalized.

How high is the fine for illegal price agreements?

For a cartel infringement, the ACM can impose a fine of up to 900,000 euros or 10% of annual turnover, whichever is higher. In the case of long-term cartels, this maximum can increase further, and involved executives can also be fined.

What is the Guideline for Rate Agreements for Self-Employed Professionals?

That is the ACM guideline (current version from 2023), which states when self-employed professionals may make agreements together regarding rates and employment conditions without violating the cartel prohibition.

Does the cartel prohibition also apply to self-employed professionals via a platform?

Self-employed professionals working via a digital labor platform are, in principle, not considered undertakings by the ACM for those activities. They are therefore allowed to make agreements among themselves regarding their rates.

Do I need to include a rate agreement in a contract?

Yes, that is wise. A written, legally reviewed agreement makes the arrangement binding and helps demonstrate that you remain within the exceptions. Have this drafted by a lawyer.

Need help with tariff agreements or an ACM question?

Do you want to be certain that your rate agreement complies with ACM regulations? Our legal experts review the agreement, formalize it, and help you avoid a fine. View our expertise in contract law or our legal assistance for entrepreneurs, or schedule a free intake consultation immediately.