NMa: possible big cartel in Dutch flour industry

The Netherlands Competition Authority (NMa) believes there might a big cartel in the Dutch flour industry. Having carried out thorough investigations, the regulator drew up, at the end of 2009, several reports against a number of companies in the flour industry, which the NMa is suspecting to have concluded cartel agreements. Similar investigations have also been carried out in other countries, including Germany, Italy and Belgium. 'The companies in question still have the opportunity to respond, but if it indeed turned out that they have concluded cartel agreements, the ramifications could be very severe indeed. Bread, pasta and other flour-related products are consumed daily by everyone. A cartel such as this one would thus harm everyone in the Netherlands because people are not charged a fair price for their basic foodstuffs,' says Pieter Kalbfleisch, chairman of the Board of the NMa, at the presentation of the NMa Agenda 2010-2011. Because of the suspicion of this cartel's existence and having received other concrete indications, the NMa decided to include the processing industry as one of its focus industries for 2010-2011.

Construction case in southern Netherlands

Furthermore, in the so-called Limburg construction case (named after a southern Dutch province), the NMa will send the first reports to construction companies involved in the case. One of the reasons the NMa was able to track down this case was because the Dutch Public Prosecution Service (OM) had found information that was very useful to the NMa while it was carrying out an investigation of its own into corrupt officials and bribery of government officials. Because of the evidence handed over by the OM, the NMa was able to complete the first reports in January already.



Foreclosure auctions

Mr. Kalbfleisch also touched upon the investigation into foreclosure auctions. For the first time ever, the NMa had asked the public to comment on its analysis of this market. The NMa is very happy with the responses it received. Mr. Kalbfleisch explains: 'This is a topic that a lot of people care about. Everybody that is forced to sell their homes hopes to get a good price, especially in tough economic times like these. Banks are also hoping that consumers get a good price, since it will affect them too.'



Processing industry

The processing industry is a highly diverse segment of the Dutch economy. Undertakings belonging to this industry produce (basic) products from which numerous consumer products are made. Two indicators in the processing industry point to an increased risk of competition-restrictive violations: high levels of concentration and homogenous products. Studies in the Netherlands and abroad suggest 'classic cartels' can be found in this industry. The NMa has found several violations in this industry in the past already, including cartels in the concrete and swimming pool chemicals industries.



Financial and business services

The financial and business services industry continues to be a focus industry. Extra attention will be given to collaborations in both the banking industry and in the insurance industry. The NMa will examine to what extent such collaborations go beyond what is legally permitted, and to what extent they are harmful to small businesses and consumers in particular. Furthermore, as in previous years, the NMa will be keeping a close eye on the tariffs and developments regarding money transfers.
Financial and business services play a significant role in productivity improvement processes at other businesses. The increased attention is the result of the fact that, in recent years, this industry exhibited relatively little innovative efforts, and its labor productivity increased only slightly. In addition, the level of market concentration is on the rise.
The NMa is receiving numerous tip-offs and indications concerning the real estate industry and it will therefore carry out oversight on this industry on a more structural basis, as well as closely watching market developments. Because of its size, increased complexity, and lack of transparency, the real estate industry is prone to violations, both to antitrust law violations, as well as to violations under the Dutch Criminal Code. The NMa is thus backing government initiatives calling for a tougher crackdown on violations in the real estate industry, and is therefore actively seeking cooperation with other criminal investigation services and regulators to combat violations effectively.



Health care industry

In 2010-2011, attention will be focused on various health care subindustries, such as home care, hospitals, pharmaceuticals, and health care insurances. The NMa will soon release new and up-to-date guidelines for the health care industry, in which is explained in greater detail what room the Competition Act offers. The NMa is expecting the home care industry to make significant steps towards full compliance with competition rules. It will support this process where necessary, but it will also monitor its progress and step in where necessary. In addition, the NMa will see to it that the health care insurance market is not impeded by collective competition-restrictive behavior of health care insurance companies.



Setting priorities in the energy and transport markets

The current state of affairs in the energy and transport markets largely determines what regulatory priorities need to be set in them. For the energy market, this means that important developments in technology, renewable energy and increased globalization affect what kind of oversight the market would need. Developments in the transport market are equally diverse, and they differ per segment as well. On top of that, transport legislation is still in flux.



Key figures 2009

In its 2009 Annual Bulletin, the NMa will briefly explain how it carried out the NMa Agenda 2008-2009. A more detailed overview will follow in the Annual Report, to be released in April. Much attention was focused on, among other industries, health care and energy. Fines in 2009 imposed by the NMa under the Competition Act and energy and transport regulations totaled EUR 5.3 million. The NMa concluded 15 formal investigations that led to a suspicion of a violation, resulting in a Statement of Objections. The NMa dealt with 24 complaints, 84 merger and acquisition cases, resulting in a decision, and dealt with 60 objections raised against decisions of the NMa and the Office of Transport Regulation. The Office of Transport Regulation issued 80 decisions and advised the Minister of Economic Affairs in 21 cases, and it dealt with 30 disputes. The NMa handled almost 25,000 questions, indications and tip-offs related to competition, energy and transport. Most of the indications, 22,000 in total, were filed with consumer information portal ConsuWijzer, jointly operated by the Dutch Independent Regulator of Dutch Independent Regulator of Post and Electronic Communications in the Netherlands (OPTA), the Dutch Consumer Authority, and the NMa. The NMa Information line has received 3,000 queries and notifications.