NMa analyzes effects of competition oversight

The Netherlands Competition Authority (NMa) will analyze the effects of its competition oversight. To that end, the NMa conducted research in 2004 to quantify and analyze the economic results ('outcome') of competition oversight. "We have presented the results in our 2004 Annual Report with some caution, because the methodology of outcome quantification is still a developing field," says Pieter Kalbfleisch, Director-General of the NMa, during the presentation of the 2004 Annual Report. "We are planning on further developing this effect analysis methodology for sector-specific regulation such as the energy and transport sectors."

Effect analysis will become one of the tasks of the yet-to-be-established Office of the Chief Economist at the NMa, which will be created on 1 January 2006. Mr. Kalbfleisch emphasizes that the effects of competition oversight are not limited to quantifiable economic effects: "Competition oversight also has legal and social effects: for instance, cartels not only cause economic harm, but they are also prohibited by law and are socially undesirable."

In its 2004 Annual Report, the NMa explains how it has implemented its 2004 Agenda. The key priorities were the construction sector, the health care sector, the energy sector, and the financial sector. One of the visible results in 2004 was that NMa conducted or is still conducting investigations into various subsectors of the construction sector. The NMa wishes to complete most of the current investigations into the construction industry in 2005. It expects that, after their completion, a form of intensified oversight will still be necessary. The huge number of leniency applications in the construction sector has resulted in a wealth of information. As a result, the NMa has established new violations of the Dutch Competition Act, among other conclusions.

This week, the NMa drew up a statement of objections in landscaping sector. The NMa believes that eight companies have violated the Dutch Competition Act by holding bid-rigging meetings in 2004 in relation to five tender processes held by a large municipality. While the municipality expected to benefit from competition between the companies, the NMa suspects that competition was, in fact, eliminated because of these bid-rigging meetings. The companies in question are now given the opportunity to respond to the statement of objections. The NMa will then determine whether a violation has indeed been committed, and, if so, whether it will impose a fine.

In 2004, the Office of Energy Regulation (DTe) contributed to the preparations for the creation of the free energy market from 1 July 2004. "We think it is important that consumers fully benefit from the free energy market, and that there are not any unnecessary obstacles when switching providers or changing addresses," says Gert Zijl, Director of DTe. To that end, clear arrangements have been made with the energy sector to solve the administrative problems with regard to address changes, switching, and sending the final bills on time. These problems have to be solved by this summer.

One concrete plan for next year is the creation of a so-called Energy Desk. Mr. Zijl explains: 'It is not sufficiently clear to consumers how they can file a complaint and with whom, if they feel that their complaint has not been handled properly by the energy supplier in question. The Energy Desk is the point of contact for such matters.’ By setting up the Energy Desk, DTe aims to increase transparency, which is an important condition for ensuring that markets function well, and for ensuring competition in the free energy market.

In 2004, the NMa drew up four statements of objections because of a suspicion that the Dutch Competition Act had been violated. One case involved 379 companies. In 12 cases, fines were imposed (totaling EUR 78.7 million), 16 applications for exemption were filed, and 199 complaints were processed, and 71 merger and acquisition cases were concluded with a decision. DTe took 272 decisions, and advised the Minister in 20 files. DTe imposed one fine.

The Office of Transport Regulation concluded 14 cases with a decision. In 2004, the Office of Transport Regulation only had statutory powers under the Dutch Passenger Transport Act 2000. On 1 January 2005, the Dutch Railway Act came into force. Bills with regard to the aviation and pilotage sectors are currently being drafted.