Unfair competition between government organizations and private businesses is not allowed

The two-year transitional period of the Dutch Act on Government and Free Markets, an amendment to the Dutch Competition Act, ends on July 1, 2014. The Dutch Act on Government and Free Markets promotes fair competition between government organizations and private businesses. Government organizations have had two years to prepare for the new rules of conduct. The Netherlands Authority for Consumers and Markets (ACM) is responsible for enforcement of this law. ACM will look into complaints from businesses, and will be taking a closer look at three sectors in particular: commercial-waste collection, commercial exploitation of sports facilities, and that of parking garages.

Anita Vegter, Member of the Board of ACM, explains: ‘With the Dutch Act on Government and Free Markets, businesses are given a fair chance to do business. Governments are thus not allowed to take advantage of improper competitive advantages. If they choose to enter a market, they must include in their price all costs they incur. We make sure they do so.’

Obligation to include all costs

Under the Dutch Act on Government and Free Markets, governments must include in their price the integral costs of their product and/or service, when entering a market. In addition, they are not allowed to give preferential treatment to their own government undertakings over their competitors, for example, by offering favorable conditions on loans.

Ms. Vegter adds: ‘Municipalities cannot simply deploy their own trucks for commercial-waste collection, or pay for the operating losses of public parking garages. That is because private businesses are also active in these markets. They cannot be hindered by unfair competition from government organizations.’

ACM will assess each concrete tip-off to see if businesses have been harmed. If such is the case, ACM can impose an order subject to periodic penalty payments.

Send your tip-offs about unfair competition from government organizations to ACM

Businesses that are facing unfair competition from government organizations are invited to submit their tip-offs about government organizations that fail to comply with the rules of conduct in the Dutch Act on Government and Free Markets. More information about this law (in Dutch) can be found on ACM’s website www.acm.nl  such as examples of and exceptions to the rules of conduct. On the website, businesses are also able to submit their tip-offs about possible violations by governments.