Nma and Dte Annual Report 2000
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NMa and DTe Annual Report NMa and 2000 DTe NMa and DTe Annual Report 2000 Netherlands Competition Authority Annual Report of the Netherlands Competition Authority (NMa) and the Office for Energy Regulation (DTe) Preface 5 2.5 Regulation of the Energy Markets 26 NMa’s main mission is to supervise the proper function- 2.6 OECD and Other Contacts 26 ing of all markets for goods and services. Once again open communication with the outside world, clarity in decision- making and a good ear for warnings of the disruption of Interview with Mr Monti. markets were the important elements of the proper func- European Commissioner for Competition Policy. “Forty years tioning of NMa and DTe in 2001. ago Europe had neither a culture of competition, nor competition legislation.” In the Commission, led by Mr Santer, he was Commissioner for the Internal Market. 28 1 NMa/DTe in 2000 8 NMa and DTe are regulators that operate in a continuously changing environment. Changes occur, for instance, in 3 Office for Energy Regulation 32 legislation and the policy of the European Commission, In 2000 the Gas Act took effect. As of that date the name NMa and DTe are assigned new duties and major economic of the Dutch Electricity Regulatory Service was changed. developments take place. This chapter outlines the most With regard to electricity, the first period of regulation, from important activities of NMa and DTe and the features of 2001 up to and including 2003, was implemented in greater 2000. detail in relation to electricity companies. In addition, a better 1.1 General Observations, Duties and Objectives 9 and more market-oriented method of allocating the available 1.1.1 General 9 cross-border transmission capacity was developed. 1.1.2Activities of NMa 9 3.1 DTe's Position in Relation to Other Parts of NMa 1.1.3 Activities of DTe 9 and in Relation to the Ministry of Economic Affairs 33 1.1.4 A Changing Environment 9 3.2Developments 33 1.1.5 Alertness Remains Important 10 3.3 Decisions 34 1.2Characteristics of 2000 for NMa/DTe 11 3.3.1 Decisions in Relation to Tariffs 35 1.2.1 A More Proactive NMa 11 3.3.2Decisions in Relation to the Amendment 1.2.2 Further Definition of the Norms Contained of Codes 36 in the Competition Act 12 3.3.3 Decisions on Administrative Appeals 37 1.2.3 Requests for Advice 13 3.4 Advice Given to the Minister of Economic Affairs 41 1.2.4 A Reactive Environment 14 3.4.1 Exemption from the Obligation to Appoint 1.2.5 Development of the Energy Markets 14 a Grid Manager 41 1.3 Outlook 15 3.4.2Efficiency Discounts (Price Caps) in Relation to the Supply of Electricity by Licence Holders 41 3.4.3 Conditions in Relation to the Auctioning of Interview with Mr Van Miert. Import Capacity 41 As a member of the European Commission, he was the 3.5 Other Activities 41 architect of European competition policy for almost seven 3.5.1 Charges/Payments 41 years. 18 3.6 Communication and Information 42 2 International Developments and Cooperation 22 Interview with Mr McCarthy. Dutch competition legislation is strongly inspired by European Director-General of Ofgem in London. “During the past legislation. Cooperation with other regulators and the five years, 6 million households have switched from one European Commission has developed well. International supplier to another.” 44 changes in competition legislation and the desire to bring about the uniform application of competition law have had a considerable effect on the way NMa operates. 4 Special Themes in NMa's Policy 48 2.1 European Developments 23 In this chapter, a number of issues, in which NMa was 2.2 Cooperation with the European Commission and involved in 2000 or made choices that determined the EU Member States 24 direction of developments, have been grouped together. 2.3 Support of the D-G for Competition by NMa in 4.1 Regulation of Competition 49 Relation to Verifications at Dutch Undertakings 25 4.1.1 Interpretation of Article 6 of the Competition 2.4 Other European Contacts 26 Act: Purpose and Noticeability 49 2 NMa Annual Report 2000 – Contents 4.1.2Small and Medium-sized Enterprises review showed a sharp increase in the number of cases (SME'S) and Branch Organisations 49 settled. Settlement occurred by means of decisions, 4.1.3 Systems of Approval and Requirements for formal opinions and the withdrawal of applications by the Membership of Branch Organisations 49 parties involved for other reasons. NMa/DTe handled and 4.1.4 Prices and Discounts 50 settled a total of 896 cases. In 1999 this amounted to 651 4.1.5 Information and communication technology 50 cases. 4.2Legal Proceedings 51 6.1 Regulation of Competition 67 4.2.1 Confidentiality of Company Data in 6.1.1 Applications for Exemption 68 Proceedings 51 6.1.2Complaints 70 4.2.2 Imposing of Fines in Practice 52 6.1.3 Orientations 70 4.2.3 Orders Subject to a Penalty 52 6.1.4 Ex Officio Investigations 70 4.3 Monitoring of Concentrations 53 6.1.5 EC Verifications 71 4.3.1 Acquiring Control: Temporary Control and the 6.1.6 Follow-up Inspections 71 Rules Applicable to Statutory Two-Tier Entities 54 6.2Regulation of Concentrations 71 4.3.2Calculating Turnover: Taxes 54 6.2.1 Notification Stage 71 4.3.3 Financial Sector 54 6.2.2 Licensing Stage 71 4.3.4 Amendment to the Competition Act 55 6.2.3 Provision of Information by Undertakings 72 4.3.5 Summary Settlements 55 6.2.4 Concentrations with Multiple Notifications 73 4.3.6 Publication of Decisions 56 6.3 Decisions on Appeal and Decisions Imposing Penalties 73 6.3.1 Decisions on Appeal 73 5 Other Topics Relating to NMa 58 6.3.2Decisions Imposing Penalties 74 In the year under review, NMa has given advice to Ministries 6.4 DTe in Figures 75 on various subjects, either on its own or in cooperation with other organisations, such as OPTA. This chapter also gives attention to the internal management of NMa. 7. Decisions 76 5.1 Advice 59 In 2000, there were various cases which drew broad interest 5.1.1 Digital Video Broadcasting - Terrestrial 59 due to the importance of the cases for a particular market. 5.1.2Radio Frequencies: Zero Base 59 This chapter provides a concise discussion of these cases. 5.1.3 Certification Scheme for Estate Agents 607.1 Decisions with Regard to the Monitoring of 5.1.4 Opinion on Covenants in Relation to the Cartels and Abuse of Dominant Positions 77 Location of Filling Stations 607.2Decisions on Concentrations 88 5.1.5 Report on the Separation of Voice Telephony 7.2.1 Cases Requiring a Licence 88 and Internet Traffic 61 7.2.2 No Licence Required 91 5.2Cooperation within the Regulatory Framework 62 7.2.3 Exemption in Accordance with Article 40 5.2.1 Cooperation with OPTA 62 of the Competition Act 95 5.2.2 Cooperation with the Ministry of Housing, 7.3 Decisions on Administrative Appeals 95 Spatial Planning and the Environment 62 7.4 Decisions Imposing Sanctions 100 5.2.3 Cooperation with the Dutch Central Bank and 7.4.1 Orders Subject to a Penalty Due to a the Dutch Insurance Supervisory Board 63 Refusal to Supply Products and Services 100 5.3 Communication 63 7.4.2Fine and Order Subject to a Penalty Due 5.3.1 Customer Satisfaction Survey amongst to a Breach of the Prohibition on Cartels 101 NMa's Customers 63 7.4.3 No Violation in Accordance with Article 24 5.3.2Transparency 64 of the Competition Act, No Fine 101 5.4 Personnel 64 7.4.4 Fine Due to the Failure to Give Notification 5.5 Finance 65 of a Concentration 103 5.6 Computerisation and Automation 65 Annex I Decisions Taken by NMa/DTe 104 6 The Year 2000 in Figures in 2000 This chapter provides a quantitative impression of NMa/DTe’s most important products. The year under Annex II Court Rulings 122 3 4 Preface Before you is the annual report of the Netherlands Competition Authority (NMa) and the Office for Energy Regulation (DTe) for the year 2000. This report provides the third interim evaluation of the development of NMa/DTe. The Netherlands is undergoing a 'cultural adjustment', according to the former EU Commissioner Karel van Miert. 'Your country has traditionally been one of the genuine cartel countries,' is the mirror that he holds up to us in an interview in this annual report. In every Dutch passport, a description is still given of the industrialisation wave at the beginning of the 20th century, which in our country was characterised by the formation of cartels. The term 'prohibition on cartels' (in Dutch, kartelverbod) is now included in the official list of words comprising the Dutch language. Concepts such as 'monopoly' and 'cartel' have acquired a negative connotation. The Netherlands is also becoming used to NMa/DTe; newspaper headlines no longer refer uncomfortably to 'the cartel police', but use the regulators own name. 5 More important than familiarisation with the regulation the process of notification in cases in which it can reach a of competition, is the fact that the public is becoming decision quickly that there is no reason to fear a restraint used to healthy competitive relations. In the past three on competition. In addition, an indication has been given years, approximately 350 cartels were eliminated.