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NMa begins enforcement of Dutch Act on Government and Free Markets

Four rules to prevent unfair competition came into effect on July 1, 2012, for situations where the government competes with undertakings. These rules have been laid down in the new Dutch Act on Government and Free Markets, which is an amendment to the Dutch Competition Act. The Netherlands Competition Authority (NMa) will check whether government undertakings comply with them. Chris Fonteijn, Chairman of the Board of the NMa, explains: ‘Businesses must be given the opportunity to do business. Governments should serve the public interest.’

The Act on Government and Free Markets contains the following rules:

Requirement to include all costs

Governments should include in the price the integral costs of a product and/or service. For example, a municipal parks department that also maintains private gardens should fully charge those individuals for those maintenance activities.

Prohibition against preferential treatment

Governments are not allowed to give preferential treatment to their own government undertakings over their competitors, for example, by offering favorable conditions on loans.

Use of data for other purposes

Governments are only allowed to re-use their data for other products and/or services if other organizations or undertakings can use that data, too, and under the same conditions. For example, municipalities may only use the municipal register for sending out commercial mailings if they make that data available to third parties under similar conditions.

Separation of roles

If governments assume the role of administrative body for certain products and/or services, and carry out thereto-related duties themselves, individual government employees cannot be involved in both of these roles. For example, it must be avoided that a local official who handles tree-felling permit applications is also involved in offering tree-felling services.

Existing products or services fall under a two-year transitional period. The NMa cannot take any action in that period. This transitional period does not apply to new activities set up by governments. The rule of conduct on the separation of roles will have a one-year transitional period. The NMa has the power to impose orders subject to periodic penalty payments for violation of these rules.

Exceptions

These new rules do not apply to elementary and higher education, public TV and radio, nor to activities of general interest that the government performs or in case of state aid.