KPN no longer placed under intensified supervision
Dutch telecom company KPN is no longer placed under intensified supervision by the Netherlands Authority for Consumers & Markets (ACM). From July 1, 2014, ACM will scale down its supervision to normal levels. The intensified supervision regime has been into force from December 2011. The reason for KPN having been placed under intensified supervision was the company’s behavior and attitude in various cases in 2011, which included the 2006 and 2010 tenders for fixed-telephony services for the Dutch government (respectively called OT2006 and OT2010). At the time, KPN’s behavior deviated considerably from what had been agreed upon by KPN and ACM in the so-called Compliance Charter of April 2008. That charter governed the rules of conduct that KPN had to comply with vis-à-vis ACM.
Since the decision to place the company under intensified supervision, KPN has taken several measures to improve its compliance, which is the degree to which a company demonstrably observes laws and regulations. In 2013, KPN asked accounting firm KPMG to carry out a study in order to get an independent picture of the effectiveness of its compliance program. The outcomes of this study confirmed ACM’s view that KPN’s efforts had resulted in a clear improvement of the measures that must ensure that KPN fully complies with the regulations ACM enforces.
Moreover, KPN demonstrated it took a constructive attitude towards ACM. For example, KPN recently suspended its legal proceedings against the fines for OT2006 and OT2010, and it promised ACM it would no longer automatically legally challenge publication of ACM fines. As a result, transparency will increase, while the number of legal proceedings will decrease.
KPN has promised to further improve its compliance program in the future, and has indicated that it is willing to learn lessons from the past and willing to develop a relationship of trust with ACM in its day-to-day operations. As a basis for this relationship, ACM and KPN have agreed on a new Compliance Charter, replacing the 2008 Compliance Charter.