NMa: high trust, with due regard for risks

'The Dutch government has opted for a “high trust” approach, thus placing greater reliance on the market and allowing businesses more freedom. However, there are limits,’ says Pieter Kalbfleisch, Chairman of the Board of the Netherlands Competition Authority (NMa) at the presentation of the NMa 2006 Annual Report.

Mr. Kalbfleisch warns: 'the principle of “high trust” should not lead to a situation in which risks are disregarded. Bearing this in mind, the NMa chooses an approach that focuses on identified risks to competition. In doing so, we need to be careful not to allow a situation where offenders go unpunished. We aim to act as a partner to discerning consumers and businesses alike in order to protect them against parties that willingly flout competition rules.' The tendency to collude continues to be strong, as is apparent from the large number of cases that are currently handled by the NMa and the European Commissioner for Competition, Ms. Kroes. 'I therefore call on all parties to help eliminate cartels and to inform us of any indications pointing to potential cartels. Making markets work requires a joint effort,' Mr. Kalbfleisch says.

Markets work by promoting competition. Competition is the best guarantee for good quality at favorable prices. It increases the options and opportunities for innovation. Consumer welfare will benefit as a result of that, and it contributes to economic growth. The NMa Chairman refers to the NVM, the Dutch association of real estate agents, which has promised to draw up regulations for improving competition, following an NMa intervention. 'We will all benefit from this', Mr. Kalbfleisch says.

He continues: 'Government organizations are facing budget cuts, so we need to prioritize even more strictly when deciding on cases. Our knowledge of markets grows. We increasingly have a better view of the effects of our interventions, giving us a stronger grip on risks. We will prioritize cases where consumer interests are at stake, and where the chances of getting caught and the seriousness of the violation are evident.’

In its Annual Report 2006, the NMa shows how it has implemented the NMa 2006 Agenda. The NMa focused on the energy and transport markets, media and communications markets, the financial sector, the construction industry and health care. In 2006, the NMa issued 5 statements of objections on the grounds of suspecting a violation of the Dutch Competition Act. It imposed fines in 13 cases (totaling EUR 114.1 million, including 4 non-construction cases and 9 series in the construction industry involving 900 completed cases in the following sectors: civil engineering, installation engineering, building and housing, cables and pipelines, horticultural services, and concrete). Seven cases did not result in a statement of objections, but were completed by means of an alternative instrument, for instance through the implementation of a compliance program in a particular sector. The NMa dealt with 112 complaints and issued decisions in 119 merger and acquisition cases, of which 18 cases concerned the healthcare sector. The NMa published 22 informal opinions and processed 125 administrative appeals against NMa decisions, of which 79 cases concerned the construction industry. The Office of Energy Regulation (DTe) issued a total of 207 decisions and advised the Minister of Economic Affairs on 6 issues. On the basis of a statement of objections, the NMa imposed a fine for violation of the Dutch Electricity Act.

The Office of Transport Regulation of the NMa issued 8 statements of objections on the basis of a reasonable suspicion of violation of the Dutch Railway Act. The Office of Transport Regulation has completed 32 investigations and in 22 cases parties amended their behavior due to intervention by the Office of Transport Regulation. In addition to the Dutch Passenger Transport Act 2000 and the Dutch Railway Act, the NMa also has regulatory powers on the basis of the Dutch Aviation Act as from 1 April 2007. To this end, the NMa recently finalized its approval of the allocation system for costs and revenues, as put forward by Amsterdam Airport Schiphol. The NMa granted a license for four years. On the basis of this calculation system, Schiphol establishes the level of revenues to be generated from tariffs levied for aviation activities, such as landing tariffs and tariffs for passenger and luggage handling. These concern tariffs charged on airline companies. The Dutch Pilotage Act is expected to come into force this year.

NMa 2006 Annual Report