ACM sees more and more mergers with anticompetitive risks

The Netherlands Authority for Consumers and Markets (ACM) has seen an increase in the number of mergers that require further investigation because of possible risks for the mergers having negative consequences. At the moment, ACM is conducting several of these more in-depth investigations, for example, in the health care sector. In addition, ACM has also observed that the number of businesses that notify ACM of their merger plans is on the rise again after a dip in 2020. This dip was likely caused by the coronavirus (COVID-19) pandemic. The number of merger notifications in the first half of 2021 was almost the same as the total number of notifications in 2020. Mergers that exceed certain turnover thresholds must be reported to ACM first for approval. Businesses are not granted clearance if their merger is expected to lead to price increases, reduced quality or less innovation as a result of increased market power.

Martijn Snoep, Chairman of the Board of ACM, adds: “Prevention is better than cure. If experience has taught us anything, it is that reining in market power, once that power has already been created, is a time-consuming, costly and complicated endeavor. That is why we thoroughly assess each and every notification we receive. Extensive investigations into risky mergers are important in order to protect people and businesses against market power. If necessary, we are able to take action in advance by forcing the merging parties to sell business units or by blocking the merger altogether.”

State of play of ACM’s focus areas for 2021

Earlier this year, ACM published its focus areas for 2021. In addition to the digital economy and the energy transition, ACM announced that it would devote extra attention to the effects of the coronavirus (COVID-19) pandemic on the economy.

The digital economy

ACM has observed that digital markets do not always work well for people and businesses. That is why, over the past six months, ACM took enforcement action on several occasions against businesses that used online misleading practices. For example, ACM confronted businesses that offered fake reviews, fake followers, and fake likes, and ACM demanded customer databases from businesses that provided these services for other businesses. Over the next six months, ACM will continue to conduct oversight over such practices. Next to enforcement actions, ACM in collaboration with several universities conducted various studies into the question of whether consumer information on company websites are actually easy-to-understand. Those studies examined, among other aspects, the lay-outs of these websites as well as the texts. This has offered valuable insights for ACM’s oversight over the transparency requirements for businesses. Over the next six months, ACM will collaborate with businesses to deepen this study. Earlier this year, ACM also looked at the trends and developments in the roll-out of fiber-optic, where ACM offered to help telecom providers and municipalities execute the roll-out swiftly and efficiently. In addition, ACM pays extra attention to IT in the health care sector. In the recently announced guidelines, the competition rules will be clarified for IT suppliers and other market participants in health care. A draft version of these guidelines is expected to be released this fall. Around the same time, the results of the market study into cloud services should also be ready. ACM’s investigation into whether Apple abuses its dominant position by using unfair conditions in its App Store with regard to online dating in the Netherlands is expected to be completed later this year.

The energy transition

The Netherlands faces the daunting task of achieving carbon neutrality by 2050. For the energy transition to be a success, it is essential that market participants get sufficient latitude for innovation and experiments. At the same time, ACM finds it important that consumer interests such as affordability, security of supply, and safety are properly safeguarded. In this year’s edition of its annual publication InSight, ACM this spring called on the Dutch Ministry of Economic Affairs and Climate Policy (EZK) to introduce new regulations regarding the rights of consumers and the role of system operators in hydrogen experiments in built-up areas. Later this year, ACM will share its opinion of the hydrogen market, the regulation thereof, as well as of the division of roles among various market participants. In addition, ACM has contributed to the discussion about the new Heat Act by outlining various possible systems for the future district-heating market. This spring, ACM sat down with residents of neighborhoods where they had problems with their supply of heat. Following these discussions, ACM asked for the improvement plans of these heat suppliers, and the suppliers were urged to improve their supply of heat. In April 2021, ACM made available for consultation the draft method decisions for the tariffs that system operators are allowed to charge. When setting the tariffs, ACM seeks to strike the right balance between, on the one hand, the room for system operators to invest in the energy transition, and, on the other hand, the short-term and long-term affordability of the supply of energy for users. Furthermore, ACM in the first half of 2021 paid a lot of attention to the importance of correct and clear sustainability claims so that people and businesses are able to have confidence in them. ACM has launched investigations into misleading sustainability claims in three sectors: dairy products, clothing, and energy.

Effects of the coronavirus (COVID-19) pandemic

Over the past six months, ACM’s consumer information portal ACM ConsuWijzer received over 35,000 reports and questions from consumers, the majority of which concerned the coronavirus (COVID-19) pandemic. In addition, ACM ConsuWijzer received many questions about important fundamental consumer rights such as warranties and the cooling-off period. With its campaign ‘you have more rights than you think,’ ACM ConsuWijzer raised awareness among youth of their fundamental rights. ACM also took action against a commercial directory assistance provider that misled callers by forwarding them to a provider of paid tests for coronavirus (COVID-19) instead of forwarding them to the free Public Health Service (GGD).  Callers paid 90 cents per minute for those calls through the directory assistance provider, whereas the GGD operates a toll-free number. Over the past few months, ACM also conducted rigorous follow-up checks on the refund processes for vouchers for cancelled package tours. The whole refund operation is now well underway. In cases where ACM identified shortcomings, it pointed these out to the tour operator in question, after which that operator adjusted its practices.

About ACM

ACM helps ensure that markets work well for people and businesses, now and in the future. ACM enforces rules that apply to businesses by combating unfair commercial practices, and by promoting compliance with those rules. ACM also provides information about the rules so that everyone knows these rules, and is able to exercise their rights.