Limited effect of Dutch Act on Government and Free Markets on sports facilities, parking garages, and waste collection

The Netherlands Authority for Consumers and Markets (ACM) has assessed how the Dutch Act on Government and Free Markets, an amendment to the Dutch Competition Act, functions in practice in three sectors. These three sectors are commercial-waste collection, commercial exploitation of sports facilities, and that of parking garages. ACM has established that, in these sectors, the law is observed by municipalities, but that it only helps realize equal competitive positions among government organizations and commercial businesses to a limited degree.

The government is active in all these sectors, and it potentially competes with commercial businesses. That is allowed, but, in that case, the government must comply with a number of rules of conduct such as including all costs in their prices. However, those rules do not apply to public-interest activities. Municipalities are allowed to decide for themselves what activities fall under that category.

ACM concludes that, with regard to sports facilities and parking garages, so-called ‘public-interest decisions’ are often used. In such decisions, municipal councils decide that, for example, their local sports centers are a core task of the municipality, and that they are so important to the public interest that it is undesirable to include all costs in the prices. That way, municipalities believe they are able to offer sports facilities at affordable prices, making it accessible for a broad audience. Commercial exploitation of parking garages, too, can be a public-interest activity, according to municipalities, in order to prevent nuisance from improper parking on the street. Most municipalities believe that commercial-waste collection is not a core task, and say they comply with the rules.

Anita Vegter, Member of the Board of ACM, adds: ‘What we observe is that local governments are aware that they must compete with commercial businesses in a fair manner. That is pure gain. At the same time, we can see that many municipalities have deliberately chosen not to have certain activities fall under the law. That is allowed, but it does reduce the effect of this law.’

The Dutch Ministry of Economic Affairs will evaluate the Dutch Act on Government and Free Markets this year. The sector scans are part of ACM’s contribution to that evaluation.