Acm.nl gebruikt cookies om het gebruik van de website te analyseren en het gebruikersgemak te verbeteren. Lees meer over cookies

Speech Anita Vegter over de ervaringen van ACM met de Wet Markt en Overheid

Anita Vegter, bestuurslid ACM, heeft op de European Competition Day in Riga (Letland) gesproken over de ervaringen van ACM met de Wet Markt en Overheid die een bijdrage moet leveren aan gelijke concurrentieverhoudingen tussen overheden en bedrijven.

Meer informatie over de Wet Markt en Overheid

Lees hieronder de volledige speech van Vegter over de ervaringen met de Wet Markt en Overheid.

Volledige speech van Vegter over “ACM’s experience with the enforcement of legislation on competitive neutrality”

1. Introduction

Friends and colleagues, good afternoon,

would like to thank the Latvian authority for inviting me to speak today. I will tell you about ACM’s experiences with the Dutch act on competitive neutrality between public enterprises and private-owned businesses. It is an excellent opportunity for us to exchange views on this topic. This topic is rather special to me because in my role as Board-Member of the Netherlands Authority for Consumers and Markets (or ACM), enforcement of this act falls under my portfolio.

The Dutch act came into force in July 2012. But ACM has actually only been able to enforce the act since July, 2014. Until then, a transitional regime was in place. So our practical experience with the enforcement of this act has been relatively short.

Nevertheless we are already assessing the effectiveness of the act because the act contains a ‘sunset clause’. This means that the act will cease to exist from July 1, 2017, unless the legislature is decides otherwise.

won’t keep you in suspense for long: We do not want the act cancelled. However, secondly, we see that unfortunately, the act helps achieve ‘competitive neutrality’ only to a limited degree. Nevertheless, we think on the balance that the act delivers what it promises to deliver. And the question we need to answer now is, what should it do more? Or should it do more.

Today I will tell you briefly about the background to the legislation, our assessment of its performance, and the questions that we feel still have to be answered.

2. Different aspects of competitive neutrality

Of course, before we begin, I should say that competitive neutrality is much broader than controlling the government as entrepreneur. Competitive neutrality is also about the government as contractor. That’s an aspect that is covered by public procurement rules. And of course the government as shareholder in major energy and telecommunications companies. That’s an important aspect of competitive neutrality that is dealt with by state aid law, competition law and sector-specific regulations. We are fully aware that this particular Dutch act covers only a part of the full picture.

Where the government acts as an entrepreneur, and, just like private businesses, offers products or services on the market, that’s where this legislation applies. For example, think of a government organization that collects waste from businesses, or think of a municipality that commercially exploits a swimming pool. Such activities are not always harmful to citizens. But the risk of unfair competition is not that far away!

3. The government as entrepreneur

Unfair competition occurs if a municipality gives its own waste-management company certain benefits such as cheaper loans, or if that municipality does not include in the prices the commercial-exploitation costs of the pool. If that happens, it creates unequal competitive positions between the public companies and the private businesses that do have to include their costs in their prices, and that rely on commercial banks for their loans.

Unequal competitive positions may lead to businesses losing revenues, deciding not to enter markets, or, at worst, even going bankrupt. There is no level playing field if governments use taxpayers’ money to offer products or services at below cost price.

Is this really a big problem? In theory, it can be. An ACM study has revealed that 83% of all local governments engage in commercial activities. Yet, it took fifteen years of public debate in the Netherlands, before we got these new rules. And I know that some of you are still arguing with your own government for the introduction of these rules.

The Dutch act on competition neutrality between public enterprises and private-owned businesses did not come about without a fight. Legislation on this issue is sensitive because it impinges on the autonomy of governments to decide themselves what is beneficial for their citizens.

It is therefore a very controversial topic. So it won’t come as a surprise to you that the protracted political discussion about this law resulted in a compromise. The law contains a major exception.

4. Key features Dutch Act on Competitive Neutrality

That brings me to the substance of the act. What do these new rules really entail?

First of all, the act applies to all governments, which means all ministries, provinces, and municipalities fall under this act. The scope of this act is thus very wide.

The basic principle of this new law is that governments are free to decide themselves whether or not to enter the market. So there are no barriers to entry for governments that wish to offer products or services on a market.

But if governments do choose to enter a market, they have to comply with the new rules. Two of the most important rules are:

governments must include in their prices the integral costs (which means all costs) of their products or services; and

they are not allowed to give preferential treatment to their own government enterprises over their competitors, for example, by offering favorable conditions on loans.

can hear you thinking: “but don’t the rules on state aid already prohibit this?” They do not – at least not in every situation, for example, if aid is less than EUR 200,000 euro in three years, or if there is no interstate effect. If there is state aid, then the new rules do not apply. Double oversight is thus prevented. And that is a good thing.

ACM enforces compliance with these rules. Governments must cooperate with ACM investigations. If ACM establishes a violation, the government in question must correct this. In the worst case, ACM can impose an order subject to periodic penalty payments if a government fails to end a violation.

The most important exception is that the act does not apply to activities that are public interests. And governments are allowed to define certain activities as public interests. For example, municipalities are allowed to say it is undesirable to charge their citizens the integral costs of the local pool in order to ensure that such services remain accessible to a broad audience.

5. ACM’s experience with new rules

So what is ACM’s experience with these new rules? Do these rules help realize a level playing field?

A recent study revealed that many businesses consider unfair competition by governments a huge problem. In recent years, ACM received approximately 200 complaints. However, more than half of the complaints did not relate to commercial activities by governments. An often heard complaint is that businesses are of the opinion that the government carries out too many activities that could be easily left to the market. For example, think of the police that uses its own vehicles to tow cars from collision scenes, or a municipality that has its offices cleaned or protected by its own employees. These forms of insourcing fall outside the scope of the Dutch act on competitive neutrality between public enterprises and private-owned businesses.

Most complaints (that were considered admissible) concerned municipalities that offer products or services relating to:

  • Sports facilities
  • Marina berths
  • Real estate
  • Trainings and educational programs
  • Commercial waste
  • Motorhome campsites (or RV parks)
  • Parking garages

As you can hear, these are mostly relatively small commercial activities. But that does not take away the fact that the consequences of unfair competition for an individual business owner can be significant!

ACM recently looked into the effect of the Dutch act on competitive neutrality in three of these sectors. We focused specifically on sport facilities, car-parks and company waste disposal. The studies revealed that municipalities do comply with the law, but that this compliance has helped realize equal competitive positions only to a limited extent. One of the main reasons for this is that, in many cases, governments decided that their activities are public interests, rendering the Dutch act on competitive neutrality inapplicable.

Furthermore, we have observed that, in other sectors too, the public-interest exception is used extensively. More than 90% of municipalities have decided that they carry out one or more public-interest activities. What is striking is that private businesses hardly object to such public-interest decisions. However, maybe companies are waking up because just recently, the first lawsuit has been filed against a municipal public-interest decision.

However, that does not mean that the Dutch act on competitive neutrality has not had any effect at all. First of all, the topic of ‘competitive neutrality’ has been put back on the political agenda. Secondly, there are examples of local governments that have changed their practices, either voluntarily or after ACM had urged them to do so. That is pure gain. So the first steps have been taken. The first ACM decisions enforcing the legislation are soon to be published. It is therefore a good thing that we have this law.

6. Conclusion

Let me conclude.

Earlier, I told you about the ‘sunset clause’. The Dutch act on competitive neutrality is currently being evaluated by the Dutch Ministry of Economic Affairs. The results of that evaluation will certainly reignite the debate.

Employers’ organizations are already calling on lawmakers to revise the law. A decision must be made before July 1st, 2017, whether or not the law should continue to exist in its current form.

ACM’s view is – this law is good as far as it goes. But the scope is limited. Municipalities are complying with the legislation. We have made it clear what is permitted by the law, and what is not allowed. However, the effect of the legislation is limited. We will have some small decisions implementing the rules, but as I said, municipalities are largely compliant now. So if we want more changes, we will need other types of rules. And the question is, whether a sharpening of the current rules, would really solve the remaining problems as companies see them. These are more problems relating to insourcing, and state aid issues. There are also roblems, when it comes to the government as shareholder, relating to perceptions and expectations of the government’s role in defending national interests. These are not covered by this legislation.

That is why it is good that we are gathered here in Latvia to exchange our experiences and ideas about questions such as “which rules are effective, and which are not? And how can these rules be enforced efficiently?” I know that this is also a topic that will receive renewed attention from the OECD in June.

Thank you very much for your attention.