Netherlands: Authority for Consumers and Markets

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Mission and strategy of the Authority for Consumers and Markets (ACM)

The ACM's core objective is to promote opportunities and options for consumers and business: opportunities for new products, services, innovation and businesses; options for consumers, who are aware of their rights, in order to enable them to make real and thoughtful choices based on proper information, provided by companies who are unambiguous about the products they offer. These conditions provide the basis for well-functioning markets.

To reach these goals, the ACM has to be well informed about the problems faced by consumers and businesses. Especially in network sectors, such as the markets for energy, telecommunications, transport and post, but also in the general fields of competition and consumer rights. As a multifunctional authority, the ACM combines knowledge in the fields of consumer protection, competition oversight and (network) sector-specific regulation, providing the opportunity to enhance effectiveness and efficiency in oversight and enforcement.

To detect market problems, the ACM executes independent market analyses and presents itself as an organisation that is open to input from the outside world. This openness is one of our core values, and we try to emphasise that by keeping in touch with involved stakeholders, such as consumers, businesses and co-supervisors - both national and international. We stand up to non-compliant undertakings that harm markets and consumer interest, while bearing in mind three conditions for intervention: the harm that the problem inflicts on consumers; the public interest that is at stake; and whether the ACM is able to take action effectively.

Legal basis

The ACM was established by the ACM Establishment Act on 1 April 2013, when three separate market authorities - the Netherlands Competition Authority (NMa), the Independent Post and Telecommunications Authority of the Netherlands (OPTA) and the Netherlands Consumer Authority (CA) - were formed into one new Authority for Consumers and Markets. On 1 August 2014, the Streamlining Act came into force. The ACM implements over 20 pieces of legislation. The Streamlining Act had the objective of harmonising and simplifying various procedural rules and cutting inefficiencies relating to the ACM's operations. Under the Streamlining Act, some competences that previously only applied to competition enforcement were extended to the areas of consumer protection and sector-specific regulation.

To achieve the mission set out above, the ACM is armed with a toolkit of instruments to solve market problems. For instance, the ACM is provided with multiple intervention possibilities. Traditionally, one of the ways of solving market problems is of course to sanction those who break the rules. On the grounds of the 2014 ACM Fining Guidelines, we have the right to fine offending undertakings and their executives. Fining can have a distinct deterrent effect. The new authority has a broader scope, due to its multipurpose character and its broader regulatory framework, which has provided the ACM with new enforcement tools.

In its oversight style, the ACM is not focused on enforcing or imposing sanctions just for the sake of enforcement. Our interventions are characterised by a specific focus on solving the underlying market and consumer problems, while at the same time taking into account the relevant context and market structure. As a result, the effect of our actions - rather than the type of instrument - is the central indication of success for the ACM when we intervene on the market. We aim at choosing the instrument, or a combination of instruments, that is most likely to offer a permanent solution to the problems we face. We wish to tackle the underlying causes of the market problem at hand.

Apart from fines, we may impose orders subject to periodic penalty payments. Commitment decisions are also an important tool. We have the power to impose binding instructions and structural remedies. Another important element of our enforcement practice is our communications policy: the ACM is an open organisation. In this role, we also put a lot of effort in drafting informal guidance opinions and engaging in norm-transmitting dialogue with market participants. Moreover, we present more general analyses or perspectives in vision documents and market scans, while we also involve in advocacy through advising governments in cases related to our fields of interest.

Last year's achievements

Hardcore cartels: anti-cartel campaign

In 2016 the ACM dealt with a variety of market problems. When dealing with hardcore cartels in 2016, the ACM paid special attention to the issue of deterrence. In order to raise the awareness of the general public, the ACM launched a campaign called ‘Cartels Never Go Unnoticed' to encourage people to report possible cartel agreements to the ACM. During the campaign the ACM created investigator profiles on LinkedIn and used these profiles to visit 6,500 LinkedIn profiles of individuals working in the port of Rotterdam or in the ports and transport sector in general. The ACM published fines of €12.5 million in 2016 in the Cold Storage cartel cases and selected the ports and transport sector as one of its key priorities in the 2016-2017 ACM Agenda. The ACM investigators left a trace on the visited profiles, leading to a purpose-built ACM website with more information about cartels. The campaign made use of a humorous video to attract potential whistle-blowers. In the weeks following the campaign, the number of tip-offs received increased and the campaign received national media coverage. The ACM received an honorable mention for this campaign in the 2017 World Bank and ICN Advocacy Awards

Competition in the ready-mix concrete sector

Competition in the ready-mix concrete sector has improved as a result of commitments made to the ACM by a large group in the sector. Ready-mix concrete is an important commodity in the construction industry. This is a sector where fines have been imposed in the past for competition infringements. The ACM observed that there were problems with the structure of the sector, combined with the close ties between the firms and/or their employees that could be harmful to competition. One of the risks was that competition-sensitive information could be exchanged because of close collaborations between competitor firms. In order to solve these problems, seven ready-mix concrete firms made extensive and far-reaching commitments to the ACM. As a result, serious risks for unfair competition have been eliminated. These commitments entail local changes to the market structure of the ready-mix concrete sector. Entry into the market has become easier in the ready-mix concrete sector. Another accomplishment is that it will become easier for others to enter the ready-mix concrete sector. For example, when selling sites, firms are no longer allowed to set conditions on the future use of those sites. The commitments took immediate effect, and they will be valid for the next 10 years. The ACM will check whether the ready-mix concrete firms are abiding by their commitments.

Competition in the financial sector

The Monitor Financial Sector (MFS) is a special team within the ACM, which carries out market studies into competition problems. In this way, the ACM has identified a number of competition problems in the financial sector and the insurance market, and has also made recommendations for policymakers, the sector itself, and other stakeholders. For example, in June 2016, the ACM conducted a study to contribute to the cost-benefit analysis of EU-wide account number portability that the European Commission plans for 2019.The ACM had a research firm develop a framework with which each EU state can get as complete a picture as possible of the benefits of account number portability, rather than focusing purely on the costs.

The ACM fleshed out variants of account number portability. The ACM prefers ‘alias portability', in which consumers and businesses pay using a unique alias, such as a social security number or the registration number with the Chamber of Commerce. The ACM made recommendations to the European Commission and the Dutch Ministry of Finance. The ACM wants consumers and businesses to be able to retain their account numbers when switching banks. In the ACM's view, this is the best way to ensure that consumers and businesses can switch easily, leading to more competition. Direct benefits for Dutch consumers and businesses have been estimated at approximately €400 million over 10 years.

Competition control and sustainability arrangements

In 2016, the ACM drew up basic principles for its oversight of sustainability arrangements (in Dutch), to clarify for businesses under what circumstances their sustainability arrangements may or may not pose any anticompetitive risks. In the absence of complaints, the ACM does not intervene if the sustainability arrangements in question enjoy wide support from all parties involved such as government, citizen representatives, and businesses. Where there appear to be potential anti-competitive problems, the ACM will help seek a swift and effective solution. We also created an interactive ‘decision tree' (in Dutch), which can be found on our website. Businesses can use this decision tree to do an initial check of whether or not their arrangements may pose any anticompetitive concerns. If the arrangements do restrict competition, the benefits of the sustainability arrangements will have to offset the drawback of the restriction of competition. The arrangements will also have to be necessary for actually reaping those benefits, and cannot completely eliminate competition.

The ACM's priorities for 2016-2017

The ACM's priorities for 2016-2017 are set out in the ACM agenda. This document is based on the ACM's own research, complaints received by ConsuWijzer (the ACM's online consumer portal), dialogue with businesses and consumer organisations, online input on social media and information from the ACM's website for businesses, consumers and (governmental) organisations. The ACM agenda sets out six strategic themes on which the ACM will focus in the period 2016-2017:

  • healthy collaboration in healthcare;
  • energy markets in transition;
  • online consumers;
  • ports and transport;
  • clear prices and conditions; and
  • competitive neutrality/governments and free markets.

Healthy collaboration in health care

The ACM wishes to make health insurers and municipalities aware that they collectively bear responsibility for making sure that health care is accessible, affordable, and of high quality. Health care providers and health insurers collaborate in many different ways. Collaborations can sometimes benefit consumers, but sometimes they do not. The ACM sees in the health care market that there is is room for collaborations that offer benefits to consumers (both as patients and insured), for example, if they improve health care affordability or the quality of treatments. However, some forms of cooperation do not benefit consumers, such as price-fixing agreements or unnecessarily restricting the options of consumers when selecting a health care provider. In 2016, we participated in meetings where competition and collaborations in health care were on the agenda. Some of the meetings where we gave presentations include the SIGRA Network Meeting on Youth in June 2016, and the Dutch Association for Logopedics and Phoniatrics (NVLF) in October 2016. In addition, we regularly monitor plans concerning collaborations, for example in the field of obstetrics. We have published general principles and answers to frequently asked questions about cooperation between obstetricians (in Dutch). In 2016, the ACM permitted hospitals and health insurers to collaborate in the collective procurement of some prescription drugs, primary care providers were offered more latitude to launch joint initiatives that improve health care, and we issued informal opinions to provide hospitals with guidance in their planned collaborations in complex care for rare illnesses.

Energy markets in transition

The energy market is undergoing major changes. More and more, energy is generated in a sustainable manner. New services are introduced, and new competitors enter the market. The transition towards a more sustainable supply of energy not only raises questions for the energy sector, but obviously also for the ACM as energy regulator. For example, large-scale investments in solar and wind power will result in more volatile energy-production levels. The ACM plays a role in the process of finding answers to the challenges that we face as a result of the energy transition. That is why the ACM contributed in late-June 2016 to the so-called ‘energy dialogue' (in Dutch), a public debate organised by the Ministry of Economic Affairs. In its contribution, the ACM identified various basic principles, questions and dilemmas regarding the energy transition that we, in our capacity, believe to be important. We also clearly explained how we see our position as regulator with respect to the realisation of sustainability initiatives. The ACM now accords extra weight to sustainability as a public interest next to the previously recognised public interests of affordability and security of the energy supply. Tensions may arise between affordability and security. On the one hand, consumers should not end up paying more for their energy than necessary. On the other hand, energy should always be available to all buyers. Sustainability adds another dimension to this, as it may be at odds with both affordability and security. Against the backdrop of such complex tensions, the ACM sees its task as ensuring the transition towards a sustainable supply of energy is as efficient as possible, while continuing to meet the preconditions of affordability and security. We do so by: continuing to work towards well-functioning markets and towards market integration; giving system operators the opportunity to recoup their efficient costs; and empowering consumers old and new in the market, and protecting them where necessary.

Online consumers

In 2016, the ACM took a closer look at online platforms. This topic has also attracted attention from around the globe. For example, online platforms were a key topic of the European Consumer and Competition Day (ECCD), held on 18 April 2016 in Amsterdam. This one-day conference was jointly organised by the Ministry of Economic Affairs and the ACM. Competition rules and consumer protection rules should not unnecessarily stand in the way of innovation. Online platforms offer consumers many advantages. At the same time, businesses that operate such platforms cannot use their possibly dominant positions to stop innovation or to prevent newcomers from entering the market. To that end, enforcement of the rules may be needed. Over the past year, the ACM focused on: protecting the privacy of consumers online; identifying the benefits and drawbacks of online platforms, and; assessing whether or not the bundling of telecom products is a problem. In December, the ACM published the results of a preliminary investigation into parity agreements on an online food delivery platform. The ACM concludes the agreements are unlikely to lead to consumer harm given market conditions. Competition oversight in online commerce is about striking the right balance between pro-competitive and anticompetitive effects, and hard core labels make it difficult to do so.

In 2016, the ACM took action against online stores for failing to protect consumer rights adequately. These actions resulted in fines for online stores that had failed to inform consumers correctly about the rules regarding order cancellations (right of withdrawal). The ACM imposed fines totalling €590,000 on five online fashion stores. Four of these five stores have filed objections against the ACM's decision. In addition, the ACM imposed a fine of €500,000 on online stores and their directors for violating the rules on refunds when cancelling orders. Appeals of these fines are pending in 2017. The ACM also fined a Dutch tour operator €350,000 for incorrectly displaying prices on its website. The company displayed the prices of trips and individual airline tickets incorrectly because it had failed to list all additional costs directly with the advertised price. These costs were only added to the price later in the booking process. Consumers were thus unable to compare different offers. The ACM had reminded tour operators of this obligation before. This company has also appealed the ACM's decision.

Ports and transport

The ACM requires companies that operate in ports of the Netherlands to compete honestly. Behaviour such as price-fixing and customer-sharing harms the competitive position of the ports, and also harms consumers, who end up paying too much for products that are shipped and redistributed through these ports. As part of the ports and transport section of on the ACM agenda, we focused on education about cartel prevention and dealing with cartels. Our educational efforts consisted of: an anti-cartel campaign; using LinkedIn to reach individuals working in the port of Rotterdam; offering information on the ACM's website about fair competition in the ports; and, in November 2016, issuing a speech at the Port Seminar in Rotterdam. As part of our effort to deal with cartels, we also: imposed fines on various parties in the sector for cartel activities; examined multiple indications about cartel activities; and commissioned a study into the level of compliance with competition rules among businesses active in the ports.

Clear prices and conditions

Consumers are able to choose from many different options. But are consumers also able to make the right choice? That is only possible if prices and conditions are clear. With some products, consumers only find out during the purchasing process that more and more costs need to be added. Think of service fees when purchasing concert tickets or when picking up a new car. We call this phenomenon ‘drip pricing'. Companies must inform consumers before the actual purchase about the price and all additional costs, as well as about the conditions associated with the purchase. Businesses owe such clarity to consumers, but also to one another. After all, if businesses are unclear about their prices and conditions, they help create an uneven playing field. In 2016, we took action on multiple occasions against companies that had failed to inform consumers correctly in advance or purchases. In addition, the ACM ran campaigns advising consumers not to pay for undelivered goods, and not to become entrapped in online subscriptions scams. We also carried out a study into switching barriers that consumers experience in the telecom market.

Competitive neutrality

The Dutch government is a key player in the Dutch economy. The government introduces laws and rules, regulates, and stimulates the economy. However, it is also active in markets, acting as businesses, owners/shareholders and clients. The government thus also participates in the market process. The roles and rules must be clear to every market participant. The ACM oversees local governments that are active in the markets. In our oversight, we also take into account public interests. In certain situations, the market is disrupted if the government interferes in it; we can take action against such market disruptions. The ACM informs governments in a timely manner about the effects of their policies on competition and the market. It protects business owners against unfair competition from government businesses. And we see to it that government businesses compete fairly. Equal opportunities for all businesses help realise healthy competition, and increase the economy's innovative capabilities. In 2016, we focused on calling attention to the potential conflict between the government's commercial interests and public interests; and calling municipalities to account for competing unfairly with commercial businesses.

For the ACM, 2016 has been a record year in terms of defending our decisions in the Dutch courts. Some of these decisions addressed fundamental issues such as the right to publish fining decisions and the ACM's obligation to preserve the confidentiality of information. The ACM continues to improve its legal procedures to ensure a system of effective enforcement, and checks and balances, in which the rights of parties are protected. The ACM's style of oversight, with its emphasis on effect rather than form, has attracted media and political attention. Our focus on deterrence is evident in the anti-cartel campaign we ran in 2016, with its tongue-in-cheek ‘fly on the wall' film, which has proved a successful method of encouraging tip-offs. We hosted a conference on assessing the impact of our interventions in November 2016. Our total outcome in 2016 as an authority is approximately €790 million. The Netherlands has an open economy and our international cooperation within the European Competition Network and the International Competition Network (ICN) is central to improving our enforcement. Taking up the position of vice chair of ICN in 2017 will allow us to contribute more and play a stronger role in explaining the benefits of competition in politically uncertain times.

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