NMa: study provides insight in antitrust risks in property finance industry

A study commissioned by the Netherlands Competition Authority (NMa) and carried out by SEO Economic Research has revealed that the risk of cartels in the property finance market has increased due to the limited number of players in that market, which in recent years has even decreased. That limited number of market participants (indicating a high level of market concentration) offering property finance services combined with a lack of smaller providers and new entrants means that the NMa will be closely following the developments in this market. It will particularly focus on refinancing products and syndicated loans, since the SEO study indicated an elevated risk to competition for these two submarkets.

‘That is why I am calling on everyone to notify us of any potential violations of the Dutch Competition Act, particularly businesses that have recently taken out syndicated loans or that were recently involved in loan refinancing. The NMa will act wherever necessary,’ says Henk Don, member of the Board of the NMa, commenting on the study’s findings.

The study further revealed that property finance customers are not that far behind loan providers when it comes to finance knowledge. In addition, it found that there is increased competition from foreign providers during economic upswings.

The study looked into the level of competition and potential antitrust risks in the property finance market for the period of 2005 through 2009. Its findings are based on data gathered from public records and interviews that were conducted in the first half of 2011. The study was commissioned by the Financial Sector Monitor (MFS), a research team within the NMa that carries out economic research into competition in the financial industry. Based on SEO’s study, MFS has drawn up a memo summarizing the study’s results, which includes the NMa’s view on the study.

The NMa greatly values tip-offs and indications (preferably corroborated by evidence) it receives from consumers and businesses about potential antitrust violations. It are these indications and tip-offs that enable the NMa to increase its knowledge of the financing industry, and to track down possible violations. The NMa annually receives approximately 4,000 indications concerning potential violations of the Dutch Competition Act. Tip-offs can be submitted to the NMa by calling the NMa Information and Tip-Off Line at +31-70-3301306.

Under the NMa leniency program, businesses that have been involved in cartels themselves may qualify for fine reductions. In addition, cartel facilitators or interested individuals can apply for leniency, too. For more information on the NMa leniency program, please visit the leniency section on the NMa’s website.