Customer allocation and the consequences under the Competition Act

Customer sharing — where competitors agree to leave each other's customers or markets alone — is prohibited under the Competition Act. Such an agreement distorts the fair functioning of the market. Anyone participating risks void agreements and substantial fines from the regulator (ACM).

Cooperation is allowed, disrupting market forces is not

Companies often collaborate strategically, and many of these collaborations are useful and permitted. However, there are limits: agreements that restrict or eliminate normal competition are prohibited. The Competition Act (and European competition law) guards that limit.

What is customer allocation?

In customer division, competitors agree on who serves which customers or territories so that they do not compete with one another. Market division is comparable, where the market is split up among them. The effect is that customers no longer have a real choice and do not benefit from competition on price and quality.

The cartel prohibition

Customer and market sharing fall under the cartel prohibition. These are so-called 'hardcore' agreements: they are almost always prohibited, regardless of intent. Such agreements are void by operation of law, and the regulator can impose heavy fines — not only on the company, but under certain circumstances also on the directors involved.

How do you stay within the rules?

Do not make agreements with competitors regarding customers, territories, prices, or production limits. If you still wish to collaborate—for example, in a purchasing consortium or for a joint project—have it assessed beforehand whether this is permitted. An agreement intended innocently can easily cross the line.

Frequently Asked Questions

Is customer splitting prohibited?

Yes. Agreements between competitors regarding the division of customers or markets fall under the cartel prohibition and are almost always prohibited.

What risks do I run with such an appointment?

The agreement is void and the regulator can impose substantial fines, sometimes also on directors.

Am I not allowed to collaborate with competitors at all then?

Many collaborations are permitted, but agreements that restrict competition are not. Have a collaboration reviewed in advance.

Have a collaboration reviewed under competition law?

Our legal experts review your agreements and draft a cooperation agreement . View our competition lawteam or schedule a free consultation.