NMa: Audit report by Netherlands Court of Audit is a stimulus to further strengthening of competition enforcement

The Netherlands Competition Authority (NMa) has welcomed the recommendations which are today presented by the Netherlands Court of Audit in its report entitled 'Netherlands Competition Authority and market forces'. The NMa has found the report to be a good point of departure for the further enhancement of competition enforcement. 'We are proud that the Court of Audit establishes that the NMa has realised major developments in its relatively short period of activity, resulting in a string of achievements', states Pieter Kalbfleisch, Chairman of the Board at the NMa. 'The NMa is a learning organisation. It is our ambition to look for further development continually.'

In its audit investigation the Court of Audit focused on the question whether sufficient safeguards are in place to ensure an independent, fair, transparent, lawful, efficient and effective implementation of general competition enforcement, while also looking into the issue whether public accountability is satisfactory as regards the NMa's enforcement effort. 'For many of the points under consideration', the Court of Audit has 'a positive image' of the NMa's functioning. 'On most fronts the NMa has soundly developed its enforcement tool kit', states the report. 'There are sufficient safeguards for upholding the legally required functional separation between investigatory and sanctioning practices in cases involving cartels and abuse of a dominant position. These guarantees have proved effective in practice.'

The Court of Audit has also found room for improvement. Its recommendations to the NMa comprise the further specification of guidelines for the implementation of alternative enforcement instruments, which should be made publicly available. The NMa would like to add that there are limits to transparency for an enforcement authority like the NMa. The Court of Audit shows its appreciation for the way in which the NMa has charted the effects of its enforcement interventions, also indicating possibilities for further improvement in this respect. There is also room for improvement to case-processing time. As to these points of improvement, the Court of Audit concludes 'that the NMa is already developing and planning activities with a view to improving a large number of these points'. In its reaction to the report, the NMa has outlined how it will deal with the recommendations.

Kalbfleisch: 'We consider the report to be a stimulus to further pursuing the road we have taken. In addition, the audit investigation puts forward new possibilities for improvement. Wherever viable, we will implement recommendations throughout our organisation. Of course, we need to take into account budget considerations in doing so. Though the investigation did not include the industry-specific regulators within the NMa, the Office of Energy Regulation (DTe) and the Office of Transport Regulation, these divisions will also carry out further improvement wherever necessary and relevant. As regards DTe, recommendations will be implemented provided they are supplementary to the recent evaluation of the Electricity Act and Gas Act by the consultancy agency Twijnstra Gudde. In April 2007 the Minister of Economic Affairs informed the House of Representatives of the Dutch Parliament on the most important conclusions to this evaluation, also setting out his response to the investigation. It is apparent from the evaluation that DTe has matured in its role as regulator and achieved fine results on issues of independence, accessibility, accuracy and professionalism.

The Court of Audit has also examined whether the Minister of Economic Affairs (EZ) sufficiently exercised his responsibility for competition enforcement policy, also including accountability towards Parliament. The Court of Audit concludes that the Ministry of Economic Affairs has thorough knowledge of NMa affairs, without hindering the NMa's independence. The Ministry and the NMa both show that a clear division of roles now governs mutual relations.

The audit report is available on the NMa website: www.acm.nl. The website will also feature further information on progress that is to be made in implementing recommendations.