Joint ventures cannot be used for circumventing competition rules. The Netherlands Authority for Consumers and Markets (ACM) investigated the joint venture Port Towage Amsterdam (PTA). This joint venture was created by two towing companies, Svitzer and Iskes. ACM looked into this joint venture, and identified that this collaboration may be at odds with competition rules
In order to eliminate the anticompetitive risks that ACM had identified, Svitzer and Iskes looked at various options, and eventually decided on dissolving the joint venture PTA. Svitzer acquires PTA from Iskes, including the towboats and PTA’s crew members, and, over the next four years, Svitzer’s rates for port towing services will not increase more than the rate of inflation. This is a commitment that the companies have made to ACM. ACM did not establish any violation.
ACM’s opinion is that, when businesses say that they will create a new business, they will actually have to create a joint venture that acts independently from their parent companies.
Martijn Snoep, Chairman of the Board of ACM, explains: ‘ACM was concerned about the structure of the joint venture PTA. The ships and crew remained in possession of and employed with Iskes and Svitzer, whereas PTA set the rates for towing services in the port of Amsterdam. Svitzer and Iskes said that PTA was a new, independent business, but we were not so sure about that.’
A full-function joint venture should truly be full-function
The commitment that Svitzer and Iskes have made sends an important signal to businesses that are thinking about creating a full-function joint venture. This also means that a joint venture needs to be able to function independently from its parent companies.
What was the case about?
Towing companies help sea-going vessels navigate safely into and out of ports. For many years, Svitzer has provided towing services in the port of Amsterdam and the nearby port city of IJmuiden. In 2007, Iskes entered this market. Iskes’ entry created competition between the two of them, and led to a decrease in towing rates for clients and customers. In 2014, Svitzer and Iskes created a joint venture, Port Towage Amsterdam (PTA), which acquired all towing services in the Amsterdam region from Svitzer and Iskes.
20-12-2019 Commitment of Svitzer and Iskes (in Dutch)