Concerns about knowledge of and compliance with competition rules in the port sectors
The Netherlands Authority for Consumers and Markets (ACM) believes that the knowledge of competition rules among businesses in the port sectors must improve, as must the rate of compliance with those rules by the same businesses. A study conducted by the VU University Amsterdam has revealed that 70 percent of these companies comply with the Dutch Competition Act, but that there is also a substantial group of firms prepared to ignore those rules. Businesses are apparently insufficiently aware of the basic rules about fair competition. ACM has therefore expressed concern over these results.
Chris Fonteijn, Chairman of the Board of ACM, adds: “ACM wants fair competition in ports, making their business more robust. On the one hand, I’m glad to see that a sizeable majority is aware of and complies with the competition rules. On the other hand, I’m concerned about too large a minority that is insufficiently aware of those rules. We want to change that, together with the Port of Rotterdam, Deltalinqs and other port-related companies. Increasing knowledge and embedding the rules in the sector are critical for raising the rate of compliance.”
What are some of the results of the study?
ACM commissioned the VU University Amsterdam to conduct a study into the level of knowledge and the rate of compliance among companies that are active in the port of Rotterdam as well as among companies that are active elsewhere. These are companies that are active in shipping, storage, transportation, and port-related services. Almost 400 individuals with commercial responsibilities were interviewed.
The study has revealed that companies have insufficient knowledge of the basic rules.
- Approximately 20 percent of the companies do not know that price-fixing agreements are illegal.
- Approximately 55 percent of the companies do not know that it is prohibited to make arrangements with competitors about sharing customers.
It also turns out that approximately 30 percent of the companies are more or less inclined to make cartel agreements or have already done so.
What is the magnitude of this problem?
The port sectors, together with the port-related transport sectors, make up a key component of the Dutch economy. In the port of Rotterdam, for example, over 400 million tons of goods are processed, and it provides jobs to over 180,000 people.
While it seems that the potential for possible violations may be confined to a minority of companies, this group may have a negative effect on trade affecting all companies in the port sectors, even those that do compete fairly. Cartels lead to price increases, reduced quality, and less innovation. That will ultimately hurt shipping volumes, as well as the competitiveness of Dutch ports in the global market.
What will ACM do?
ACM will sit down with the sector in order to work together on creating a port sector that is honest and promotes fair competition. That is why ACM has invited the Port of Rotterdam, which is the port authority, together with Delatlinqs, which is the largest trade association representing companies in the port of Rotterdam, to take part in these discussions. On January 11, 2017, the Port of Rotterdam and Deltalinqs will host a meeting for all companies that are active in the port to discuss fair competition. ACM will be pleased to attend this meeting, too.
Furthermore, ACM will take action against cartels: price-fixing agreements, market-sharing agreements, bid-rigging, and exchanging commercially sensitive information are not allowed. At the moment, several investigations into illegal cartel agreements are underway. ACM can impose fines on companies that do not comply with competition rules.
A new website has been launched (www.acm.nl/havens), which explains the basic rules of the Dutch Competition Act.