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Home care industry more aware of competition and antitrust rules

‘We are seeing a positive trend as more and more home care providers become aware of competition and of the antitrust rules that come with it. These providers are doing more and more to prevent future mistakes,’ says Henk Don, member of the Board of the Netherlands Competition Authority (NMa). This has been the conclusion the NMa draws following, among other things, talks it has held with supervisory boards of home care providers.

The home care industry was included in the 2010-2011 NMa Agenda as a focus industry. As a result of the positive trends it has observed, in which the home care providers have demonstrated that they value fair competition, the NMa has decided to remove the focus-industry status from the home care industry. ‘This means that we revert to “normal oversight,” where we take the so-called “high-trust approach” as our starting point.’ However, at the same time, Mr. Don gives a stern warning too: ‘There is increased trust in home care undertakings, but if we detect abuses, high fines will follow.’

Next to the constructive talks it has held with home care providers, the NMa has also completed a number of cases from the past.

Commitments made by southern home care providers
Four home care providers based in the south of the Netherlands that had been the subject of ongoing NMa investigations have made commitments to the NMa that they would adjust their behavior so that competition would no longer be jeopardized. When the NMa identified potential antitrust concerns during its investigation, the providers immediately indicated they wanted to resolve these issues straight away. Thanks to the aforementioned commitments, the potential antitrust concerns have been taken away swiftly and effectively, and the NMa investigation can now be completed. The NMa is making the draft commitment decisions available for perusal through June 14, 2011. Interested parties have the opportunity to submit opinions. If the NMa declares the commitments binding after that date, the NMa will close its investigation without officially establishing a violation.

Fines for market-sharing
The NMa has imposed fines on two home care providers, Stichting Careyn Zuwe Aveant and Stichting Vierstroom, of EUR 1,343,000 and EUR 3,000,000 for market-sharing activities. These home care providers had made a far-reaching non-aggression pact as part of the dissolution of a cooperative arrangement (Caraat). The dissolution process had thus resulted in a market-sharing agreement, which constitutes a severe violation of the Dutch Competition Act. The non-aggression pact the providers had made had the objective of eliminating mutual competition. Furthermore, as a result of the pact, the threat of a new entrant, Careyn, in the subsidized health-care market in the region of Midden-Holland had subsided. Competitive pressure on Vierstroom, which already had a very strong position in its operating area, was reduced even further. Healthy competition is extremely critical, because it keeps home care providers sharp to offer the best possible care at the best possible price. The undertakings involved consciously chose to protect each other’s market position instead of competing against one another, according to the NMa. The NMa took into account the financial strength of the home care providers when it determined the level of the fines. NMa fines should not cause undertakings to go bankrupt.

No violations established
In another case, the NMa decided not to impose a fine on three home care providers in the province of South-Holland (Stichting Florence, Stichting Vierstroom, and Stichting Thuiszorg Groot Rijnland, which is now Stichting ActiVite). The NMa has found insufficient evidence that these providers have been guilty of anticompetitive behavior in their province.