Local governments do too little to prevent unfair competition

Local governments in the Netherlands are insufficiently informed about the Dutch Act on Government and Free Markets, and take too few measures to prevent unfair competition with the private sector. This is one of the findings of a study of the Netherlands Authority for Consumers and Markets (ACM) into the level of familiarity among local governments and businesses with this particular law. The goal of the Act on Government and Free Markets is to make sure that competition between government organizations and private companies takes place in a fair manner. ‘We are calling on local governments to check whether they are applying the rules correctly in order to prevent any violations from occurring,’ Member of the Board of ACM Anita Vegter reacts.

The law has been in effect for a year now, and provides for a transitional period until July 1, 2014 for existing cases. This year, ACM will be checking whether local governments comply with the rules. ACM can already take action against new cases of unfair competition. That is why it is important that businesses know that they have the opportunity to file their complaints with ACM about unfair competition by local governments. Ms. Vegter adds: ‘Businesses are denied the opportunity for fair competition if local governments do not play by the rules when engaging in economic activities, for example, property rentals, business-waste collection, and sports facility rentals.’

Since July 1, 2012, local governments competing with private companies must comply with these new rules to prevent unfair competition with businesses. These rules have been laid down in the Dutch Act on Government and Free Markets. They do not apply to elementary and higher education, public TV and radio, economic activities of general interest that governments carry out, or in case of state aid. A complete list of exceptions can be found on www.acm.nl. Companies can file their complaints about unfair competition by local governments with acm.nl. More information on the Act on Government and Free Markets itself can be found there as well.