NMa: airlines and railway undertakings unable to stand their ground against Schiphol airport and infrastructure manager ProRail
The Netherlands Competition Authority (NMa) has found that airlines have no buyer power vis-à-vis Amsterdam airport Schiphol, and that rail transport undertakings have none either vis-à-vis infrastructure managers ProRail and Keyrail. Buyer power is an economic concept describing a situation where a buyer can offer a counterweight to a supplier during negotiations. In direct negotiations on, for example, tariffs, airlines and railway undertakings are not able to stand their ground. Yet, the whole idea behind the sector-specific regulatory framework upon its introduction was that they could, according to the NMa’s study ‘Buyer power in the aviation and rail industries.’
Buyer power was a key starting point when the choice was made for a light regulatory regime for the aviation and rail industries. The aim of that regulatory regime was to help create a level playing field where all participants would have equal opportunities. In practice however, when negotiations appear to be unsuccessful, users often turn to the ministry or lawmakers in order to exert pressure, with mixed results. There are thus insufficient guarantees that such a course of action will actually enable buyers to stand their ground. That is why it is necessary to use the findings of this study as a starting point for further discussion with relevant parties about strengthening rail and aviation regulation.
The NMa is charged with regulation on airlines’ access to Schiphol airport and rail undertakings’ access to the rail infrastructure. The NMa wanted to find out to what extent airlines and railway undertakings were able to use their buyer power vis-à-vis suppliers, both in passenger transport and in freight transport. The NMa looked into buyer power last spring. A previous study in other countries revealed that buyer power is often lacking or is often poorly realized. Those findings have now been confirmed in the Netherlands. Schiphol, ProRail and Keyrail are statutorily required to consult their users when adjusting their tariffs. In practice, objections raised by users often (or even always) fall on deaf ears. The Dutch Ministry of Infrastructure and the Environment has put into action a plan to improve this situation. For example, the Dutch Aviation Act will be evaluated, and the negotiability of rail tariffs will be better explained.
On January 1, 2013, the NMa will merge with the Netherlands Consumer Authority and the Independent Post and Telecommunications Authority of the Netherlands (OPTA), creating a new authority: The Netherlands Authority for Consumers and Markets (ACM). This new authority aims to ensure that markets work in order to protect consumer interests. To this end, the ACM will focus on three main themes: consumer protection, industry-specific regulation, and competition oversight.
AttachmentsMarket consultation - Summary - Buyer power in the aviation and rail industries (PDF - 30.35 KB)
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