NMa Fines Cleaning Services Branch for Price Agreements

The Netherlands Competition Authority (NMa) has imposed fines totalling almost EUR 17 million (EUR 16,975,550) on Ondernemersorganisatie Schoonmaak- en Bedrijfsdiensten (OSB) (the branch organisation representing cleaning services and business services companies in the Netherlands) and the cleaning services companies Gom, Asito and CSU for issuing percentage price increases for the branch. The individual fines are: OSB EUR 2,000,000; Gom Schoonhouden B.V. EUR 4,415,000; Asito B.V. EUR 6,993,550; and CSU Total Care B.V. EUR 3,567,ooo.

Gom, Asito and CSU are amongst the five largest cleaning services groups in the Netherlands. The 650 members of OSB jointly account for 60-70% of the total turnover of cleaning services activities on the Dutch market. The total turnover amounted to EUR 2.4 billion in 2000. The members of OSB account for EUR 1.47 billion of this turnover. Gom, Asito and CSU are members of the general administration of OSB.

The decision confirms suspicions, which NMa set out in a report in August 2002, of which the cleaning services companies and the branch organisation OSB subsequently gave their opinion. NMa has established that OSB annually set the percentage by which its members were required to increase their prices. The percentage price increase was set once a year, halfway through the year. OSB took action to enforce compliance by the customers of cleaning services companies to ensure that its members could in fact implement the price increases. These recommended price increases were issued in any event from January 1998 to mid-2000. This constituted an infringement of the Competition Act. Every entrepreneur is required to set his own tariffs and prices without knowledge of the market behaviour of his competitors. The issuing of percentage price increases by OSB restricted mutual competition between the affiliated cleaning services companies. This eliminated the incentive for companies to work as efficiently as possible and, as a result, customers were disadvantaged and their freedom of choice was limited.

In addition, NMa has also fined the companies Gom, Asito and CSU for the fact that they jointly took the initiative in mid-2000 to increase prices as of 1 July 2000 by 2.5%. OSB subsequently adopted this percentage, after which it informed it is members of this. By doing so, Gom, Asito and CSU deliberately replaced mutual price competition by de facto cooperation and therefore infringed the Competition Act.