NMa: Urgent Measure against Abuse of a Dominant Position by Education Institution

The Netherlands Competition Authority (NMa) has issued an urgent measure (a provisional order subject to a penalty) against Waldeck B.V. Waldeck is the parent company of Leidse Onderwijsinstellingen (LOI) and Studieplan, providers of correspondence courses for private individuals. Waldeck has a dominant position on the market for correspondence education and, according to NMa, abuses its dominant position. According to NMa, Waldeck systematically attempts to drive its competitor, Nationale Handels Academie (NHA), from the market by offering similar courses through Studieplan at loss-making prices. This urgent measure is aimed at ensuring that Waldeck ceases this systematic price cutting.

Such behaviour by a dominant undertaking constitutes a serious infringement of the Competition Act. Companies with a dominant position may compete on the basis of price, quality and service, but may not abuse their position to impede competition. Although consumers appear to benefit in the short-term from the low prices, NMa is of the opinion, on the basis of evidence which has been collected, that it is plausible that Waldeck will increase the price of Studieplan courses as soon as the only real price competitor NHA has disappeared from the market. Studieplan regularly increases the price of courses which are not or are no longer offered by its competitor NHA.

The provisional order subject to a penalty prohibits Waldeck from continuing to offer Studieplan courses at loss-making prices subject to a penalty of € 5,000 a day and a maximum of € 500,000. Studieplan is also required to cease offering a lowest price guarantee. This means that if there is a difference in price with a similar course offered by a competitor, the buyer of the course is repaid two times the price difference.

NMa started an investigation into Waldeck in August 2002 following a complaint by NHA regarding the pricing policy of Studieplan courses. During the investigation, NMa decided to use the instrument of an order subject to a penalty due to the urgent nature of the case.