Three municipal parking garages in the western Dutch town of Hilversum competed unfairly with commercial parking garages and with a parking lot. The rates of the municipal car parks did not include all costs. This has been revealed by a decision of the Netherlands Authority for Consumers and Markets (ACM).
What was the problem?
Parking company Q-park Nederland owns two parking garages and a parking lot in downtown Hilversum. The company had filed a complaint with ACM about unfair competition by the municipality of Hilversum.
The municipality owns three parking garages where visitors can park: ‘Gooiland’, ‘Gooische Brink’, and ‘Leeuwenhoek’. In the period of 2016 - 2019, the municipality charged too low rates for these parking garages, and, as a result thereof, these garages were running at a loss. The municipality compensated that loss with taxpayers’ money, among other methods. That is unfair competition. Municipalities may engage in commercial activities, such as operating parking garages, but, if they do so, must include all costs in their rates. If they do not, they violate the Dutch law on competitive neutrality, the Dutch Act on Government and Free Markets. The municipality of Hilversum will change its rates.
Governments must compete fairly vis-à-vis commercial businesses
There are special rules in place for governments that engage in commercial activities. These rules are laid down in the Dutch law on competitive neutrality, the Dutch Act on Government and Free Markets, which is part of the Dutch Competition Act. These rules ensure that governments do not compete unfairly with commercial businesses. ACM enforces compliance with these rules.