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NMa Presents Its Annual Report 2002 on Its New Website

The Netherlands Competition Authority (NMa) today presented its provisional key data for 2002 on its revamped website. This Annual Report contains an overview of NMa's activities in 2002.

Sanctions

In 2002 NMa imposed fines totalling almost EUR 100 million in six cases. In December, NMa imposed a fine for the cartel agreement of the five mobile telephone operators to abolish at the same time the discounts for subscriptions which include a telephone. In 2002 NMa also imposed fines for a system involving exclusion and the refusal to supply goods in the veterinary pharmaceutical trade and for a discount campaign by Texaco against the arrival of a Tango filling station in Nijmegen. The companies involved in these infringements lodged an administrative appeal against the fines. In the case of the telephone operators, the six-week term in which an administrative appeal may be lodged has not yet expired. Within the framework of concentration supervision, a fine was imposed for infringing instructions linked to the licence for the merger which resulted in the creation of Essent in 1999. Fines were imposed on several construction companies for their refusal to co-operate in parts of NMa's investigation.

In 2002 DTe imposed an order subject to a penalty on the electricity producer E.on due to its refusal to provide the requested data on price increases.

Reports

In nine cases, NMa set out its suspicion that an infringement of the prohibition on cartels had been committed in a report, which was followed by a sanctions procedure. Five of these suspected infringements related to the construction sector. The other reports drawn up in 2002 related to mobile telephony, the cleaning branch and the bicycle trade (two reports).

In 2003 NMa is expected to draw up at least ten reports which set out a reasonable suspicion that the law has been infringed. NMa announced this earlier in NMa's Agenda for 2003. Some of the current investigations relate to the construction sector.

Concentrations

In 2002, notification was given of 77 concentrations (mergers, acquisitions and joint ventures). The number of notifications is considerably smaller than in 2001 (135). The increase in the turnover threshold, at which companies are required to notify NMa, in the second half of 2001 affected this reduction. In addition, the economic situation also possibly affected the number of mergers and acquisitions.

Within the framework of concentration supervision, NMa published its Guidelines for Remedies at the end of 2002. These guidelines relate to the content, submission and implementation of restrictions and conditions in relation to concentrations. In its Memorandum on Concentrations in the Energy Sector, which was published in December, NMa set out the provisional insights which it will apply in assessing future concentrations in the energy sector.

Netherlands Transport Regulatory Authority [Vervoerkamer]

Since 1 January 2002, the Netherlands Transport Regulatory Authority, which is being set up within NMa, has supervised municipal transport companies in the Netherlands. The Netherlands Transport Regulatory Authority handled eight cases within this framework in 2002. Three of these were settled by means of a court ruling. The remaining cases will be settled in the first quarter of 2003.

DTe

In addition to the order subject to a penalty referred to above, the Office for Energy Regulation (DTe) took a total of 375 decisions in 2002 and advised the Minister of Economic Affairs on 20 occasions. Since the beginning of 2002, consumers who wish to purchase green electricity may choose their own supplier. Suppliers who wish to supply green electricity must have a licence. In 2002 DTe issued 28 licences to suppliers on the market for green electricity. In total, DTe issued 39 licences for the supply of electricity to captive customers.

DTe supervises the energy companies to ascertain whether they comply with the legislation and regulations. For this purpose DTe, for instance, carried out various audits in 2002 on the premises of the managers of electricity grids and gas networks. The legislation and regulations oblige a grid or network company and a supply company which are part of the same concern to operate independently of each other to promote competition on the market for the supply of gas and electricity. A number of audits gave DTe cause to conduct further investigations.

Administrative and Judicial Appeals

In 2002, 125 administrative appeals against decisions taken by DTe were processed. Of these, 53 were (partially) declared to be well founded. In 2002, the Trade and Industries Appeals Tribunal [College van Beroep voor het bedrijfsleven (CBb)] processed 76 appeals against decisions taken by DTe. The Tribunal ruled that ten judicial appeals were well founded, including the appeal submitted by N.V. Rendo (February 2002) against the electricity supply tariffs for the year 2002. This resulted in a review of the system of price caps for electricity supply companies. This price cap (efficiency discount) was set at 10 percent per annum for all companies.

The Trade and Industries Appeals Tribunal handed down a similar ruling on the price-cap method applied to electricity grid managers (November 2002). In this ruling, the court decided that the efficiency incentive determined by DTe for each grid manager was in conflict with the Electricity Act of 1998. DTe's aim in imposing this incentive was to ensure that grid companies, which by nature are monopolists in their areas, operate more efficiently and lower their tariffs every year. Following this ruling by the Trade and Industries Appeals Tribunal, DTe took no tariff decisions in 2002 with regard to the use of the electricity grids in the year 2003. This means that for the time being the grid tariffs for 2002 will also apply in 2003. By doing so, DTe aims to restore calm to the market and provide customers with clarity.

Of the 61 administrative appeals against decisions in competition cases, one was declared to be partly founded in 2002. NMa withdrew a fine imposed in 2001 on Deutsche Post and Trans-o-flex for the provision of incorrect data in relation to a merger. Last year the court in Rotterdam concluded 18 judicial appeals against decisions taken by NMa. In 17 cases, the court ruled that the appeal was unfounded or inadmissible. The court also ruled that the appeal of NOS in the case relating to programme listings was unfounded. The court confirmed NMa's standpoint that NOS and HMG must provide the programme listings at a reasonable price to third parties. With regard to HMG, the court ruled that there was no evidence of a refusal to supply the listings. The case of HMG was referred back to NMa.

In 2002, the Trade and Industries Appeals Tribunal handed down two rulings in appeals proceedings against cases dealt with by NMa. In both cases, the court found in NMa's favour and the appeal was declared unfounded. One of the rulings related to the conditions which NMa had imposed in granting a licence for the merger of PNEM-Mega and EDON to form Essent in 1999.

Budget and Personnel

The total budget allocated to NMa amounted to EUR 32 million in 2002. In 2002 NMa, including DTe, grew from 187 to 312 employees (formal employment on a full-time basis). Of the new members of staff, approximately two thirds come from the private sector. The Directorate of Competition Supervision, the part of NMa responsible for investigating cartels and abuse of dominant positions, accounts for the largest share of this growth. More than 30 people have been assigned to the investigation of cartels in the construction sector.

Figures for 2002

  • 9 reports due to a reasonable suspicion that the Competition Act was contravened
  • 6 cases in which fines were imposed amounting to a total of EUR 99,633,000
  • 46 requests for exemptions from the prohibition on cartels, which were concluded
  • 184 complaints processed with regard to infringements of the Competition Act
  • 77 notifications of concentrations (mergers, acquisitions and joint ventures)
  • 1 licence required for a concentration (for which no application was submitted)
  • 17 decisions by DTe regarding methods
  • 329 decisions by DTe regarding implementation
  • 29 decisions by DTe regarding enforcement
  • 20 recommendations made by DTe to the Minister of Economic Affairs
  • 3 legal opinions by the Netherlands Transport Regulatory Authority [Vervoerkamer]

The figures presented in this annual report are provisional. Due to administrative processes, the final figures may deviate slightly from these. NMa publishes an annual report each year.

The Annual Report for 2002 will be presented in May 2003.

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