Effect of NMa enforcement and regulatory activities in second quarter 2007
The Netherlands Competition Authority (NMa) has in the second quarter of this year carried out unannounced company visits to a number of financial institutions and several organisations operating under the Exceptional Medical Expenses Act [AWBZ] in the healthcare sector. In the first and second quarter, the NMa received a total of 8 leniency applications. The Netherlands Court of Audit [Algemene Rekenkamer] recently established that the NMa has developed greatly in the course of its relatively short lifespan, showing fine results. 'The NMa has, in most aspects, successfully developed its enforcement tools', states the Court of Audit. The audit report also sets out that adequate assurances are in place regarding the statutory segregation of tasks pertaining to the investigation and sanctioning of cartels and the abuse of a dominant position.
As regards the assessment of proposed mergers and acquisitions, the NMa received 24 notifications in the second quarter of this year. The Authority adopted 32 clearance decisions and imposed a license requirement on one of the mergers proposed, entailing a more in-depth investigation by the NMa with a view to possible restrictions to competition. The mergers between Cosun and CSM (sugar), between CIMC and Burg Industries (trailers and storage/ process tanks) and between KPN and Tiscali (broadband internet services) were cleared. Upon receiving notification from the energy companies Nuon and Essent, the Authority decided that this proposed merger required a license. In the meantime, Nuon and Essent have submitted a license application. Following the NMa's announcement of an in-depth inquiry into the merger of the Coöperatie Bloemenveiling Aalsmeer U.A. and the Coöperatieve Bloemenveiling FloraHolland U.A. in February this year, parties concerned submitted a license application. The NMa consulted members of the business community and legal profession, as well as other interested parties, on its revised Remedy Guidelines. This document outlines the NMa's work method as regards the conditional clearance of mergers and acquisitions.
In the past quarter, GAU and VvL, branch associations of publishers and writers/ translators respectively, removed normative tariffs for translation work from model contracts at the urgent request of the NMa. As a result, contract parties may by themselves come to an agreement on remuneration. The advertising supervisory body ROTA [Raad van Orde en Toezicht voor het Advertentiewezen] has at the urgent request of the NMa dropped the so-called 'stacking' prohibition [Stapelverbod]. Under the prohibition publishers could not contract more than one advertising agency at the same time. Through increased buying power, advertising agencies may in future purchase advertising space against lower tariffs. The NMa also examined the professional code of conduct put forward by the Royal Dutch Notarial Society [Koninklijke Notariële Beroepsorganisatie (KNB)] for possible restrictions to competition. Its final report contains concrete recommendations to the KNB for removing risks to competition. The KNB has already indicated it will consult its members on a series of revisions. In late May the NMa advised the Minister of Economic Affairs on the formation of combinations in the course of procurement procedures. In April and May of this year, the NMa adopted 13 decisions on appeal in the Civil Engineering and Infrastructure sector [GWW-sector]. In conjunction with the first round of decisions on appeal, adopted in November 2006 (33 decisions), this effort closes a large number of construction cases.
The NMa is the first European competition authority to issue fining guidelines for infringements of energy and transport regulation. The NMa Fining Code 2007 comprises such guidelines alongside fining guidelines for infringements of competition legislation supervised by the NMa. As from now, all new cases come under the Fining Code.
The Office of Energy Regulation [DTe], the chamber within the NMa that regulates the energy sector, for the second time examined complaint processing procedures among the ten largest energy providers. On the basis of its investigation into the profits of the four largest integrated energy companies, DTe concluded that the regulatory framework for transport tariffs has already proved very beneficial to consumers, but requires further tightening. At the request of the Minister of Economic Affairs, DTe reported on potential risks inherent in the arrangement of current network operations. DTe started an examination of information provided on energy companies' websites and published its report on the quality of comparison websites for electricity and gas. The NMa imposed a fine of EUR 95,000 on NRE Netwerk B.V. for charging excessive transport tariffs on approx. 2500 business customers. Also, NRE Netwerk charged consumers with too high a periodic connection tariff. NRE has meanwhile modified its tariffs and will refund excess payments.
The Office of Transport Regulation [Vervoerkamer] approved a calculation system on the basis of which Schiphol shall fix the tariffs charged on airline companies. These involve tariffs for aviation activities, including landing fees and tariffs for passenger and luggage handling. The Office of Transport Regulation pointed out to ProRail that maintenance capacity should already be taken into account when drafting the annual timetable. The organisational division of public transport and non-public transport activities within municipal transport companies proved to be adequate. The Office of Transport Regulation examined this issue with a view to preventing cross-subsidisation.
In the past quarter 2,800 consumers contacted the NMa via ConsuWijzer. The NMa's business helpdesk was contacted approximately 850 times.