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Annual Report 2002 Nma and Dte

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Annual Report 2002 Nma and Dte Annual Report 2002 NMa and DTe Nederlandse Mededingingsautoriteit Key figures NMa 2002 Reports and fines 2002 2001 Number of reports based on a reasonable suspicion 9 3 that the Competition Act had been contravened Number of cases in which fines were imposed 6 4 Number of fines 21 9 Total fines in € 99,600,000 158,823 (NLG 350,000) Exemptions and complaints · Processed applications for exemptions from 45 165 the prohibition of cartels · Processed complaints with regard to contraventions 187 145 of the Competition Act Concentrations ·Notifications of mergers, acquisitions and 77 135 joint ventures (concentrations) · Decisions on notifications of concentrations 66 138 · Licence required for concentration 1 2 Office of Transport Regulation [Vervoerkamer] ·Cases under consideration relating to 8 - municipal transport companies · Number of cases settled by means of a ruling 3 - DTe · Method decisions 17 13 · Implementation decisions 329 368 · Enforcement decisions 29 28 · Advice to the Minister of Economic Affairs 20 41 ·Total 395 450 Administrative appeals · Processed administrative appeals in competition cases 62 41 · Processed administrative appeals in DTe cases 125 107 Staff · Number of employees at 31 December 303 187 (on a full-time basis) ·Average age of staff 36 36 Budget in € 32 million 27 million Annual Report 2002 NMa and DTe Index foreword summary part 1 • nma in 2002: central issues Mission, Objectives and Strategy 11 Overview of Performance 15 Development of legislation, tasks and role 23 part 2 • objectives and results per task Prohibition of Cartels and of Abuse of Dominant Positions 31 Merger Control 45 Competition Act and Prices 52 Regulation of the Energy Markets by DTe 56 Transport Regulation 69 part 3 • developments in practice Position of the Consumer in Procedures 73 Court Rulings: General Competition Regulation 75 Court Rulings Sector-Specific Regulation: Energy 78 Guidelines for Remedies in Relation to Mergers 81 Assessment of Mergers: Taking into Account Future Developments 83 Assessment of Mergers: The Gatekeeper Function 85 part 4 • decisions The Entire Chain: From Primary Decision to Appeal 89 Summary of Reports and Decisions 91 Overview of Decisions by NMa and DTe in 2002 117 Overview of Court Rulings in 2002 142 Foreword This annual report presents the results of the paths taken by NMa, including DTe and the Office of Transport Regulation, to further consolidate enforcement of the Competition Act [Mededingingswet], the Electricity Act of 1998 [Elektriciteitswet 1998], the Gas Act [Gaswet] and the Passenger Transport Act of 2000 [Wet personenvervoer 2000] and to ensure the effective operation of market forces in the Netherlands. The paths taken were mapped out before 2002 by the first Directors of NMa and DTe, Mr A.W. Kist and Mr J.J. de Jong. Both accepted new positions at the beginning of 2003. In this annual report NMa accounts for the way it has used the instruments at its disposal in 2002 to ensure the operation of markets. In addition, this annual report provides information on the development in the NMa’s work. Finally, the annual report aims to be a reference work for entrepreneurs, professionals in competition law, academics, students and other interested parties. In 2002, the results of a number of investigations which where recently started into infringements of the Competition Act, such as those in the construction industry, were not all publicised. Complex investigations which were started in 2000 and 2001 were also completed. Finally, new investigations were started, the results of which will be made public in 2003. The investigation of infringements and the implementation and enforcement of competition rules and energy legislation is now well established. Experience and case law is developing. In the year under review, NMa also chose to invest in the organisation and technology that supports investigations. With regard to investigated practices and the sanctions imposed, the trend towards achieving better results will prove to be of a lasting nature. To ensure that this is the case, it is important that the extension of NMa’s powers, which was requested and which was raised during the evaluation of the Competition Act and during the parliamentary inquiry into the construction industry, is realised. In DTe’s area of operation, the extension of its powers, for instance to impose fines, has contributed to the effective implementation of its supervisory duties. Strengthening NMa’s ability to act is also important in relation to the new European directive on the implementation of the prohibition of cartels and the prohibition of the abuse of dominant positions contained in the EC Treaty. The new rules will take effect on 1May 2004. The possibility of obtaining an exemption from the prohibition of cartels beforehand will no longer apply, while infringements can be investigated more intensively. It is not desirable that the Netherlands, as an EU Member State, adheres to a regime in the long-term which deviates from this. After all, it is essential for Dutch companies that the level playing field required for healthy and effective competition is realised at the level of the internal market and that they are not confronted with different regimes. The ultimate aim of action taken by NMa is not to impose penalties for infringements, but to ensure effective competition. It is for this reason that NMa wishes to utilise the right instruments in the area of both competition regulation in a visible manner to achieve optimal effects on the market. The accelerated integration of NMa and OPTA, which has been proposed, will increase the effectiveness of regulation of the postal services and telecommunications markets. An increasing number of tasks, in particular sector-specific tasks, have been assigned to NMa. In this regard, it is important that NMa is sufficiently well-equipped with resources and, as was mentioned above, with legal instruments to ensure fair and effective competition or to bring this about by means of regulation. This applies generally and is all the more pressing where society has a considerable interest in regulation and therefore also has high expectations of NMa, for instance in the area of transport, but also in the area of energy. NMa is keen to realise these high expectations. We wish to thank all members of NMa’s staff for their contribution to ensuring that markets functioned well in 2002. Mr R.J.P. Jansen Acting Director-General of the Netherlands Competition Authority Mr G.J.L. Zijl Director of the Office of Energy Regulation Summary Part 1 • NMa in 2002: Central Issues The first part of this annual report deals with the way NMa carried out its mission and describes the objectives and the strategy of NMa and its chambers in 2002. With the aid of a management tool and the application of the Balanced Scorecard, performance and processes were analysed from four perspectives: the Result perspective, the Customer/Environment perspective, the Owner’s perspective and the Internal Organisation perspective. This analysis includes, for instance, with the effects of the Competition Act and NMa and the speed of NMa’s processes. The input necessary for carrying out its duties, namely staff and funding, were also emphasised. In addition to recruitment and selection, training, and other characteristic elements of NMa’s personnel policy, NMa’s financial accountability is discussed. The political and social framework within which NMa operates is subject to continuous change. For this reason, recent and future developments which affected NMa’s tasks and relevant legislation are discussed briefly. Part 2 • Objectives and Results per Task The second part discusses the results of NMa/DTe/Office of Transport Regulation in relation to each of their tasks. Parts of these tasks, such as imposing sanctions for contraventions of the law and monitoring conditions applicable to concentrations (remedies) are discussed in detail. The sectors that are given special priority by NMa are dealt with in separate paragraphs. The intermezzo ‘Competition Law and Prices’ deals with the effects of the Competition Act and NMa’s activities. Attention is given to both the economic effects of competition regulation and the social benefits of competition regulation. Part 3 • Developments in Practice The third part deals with developments in practice. The formal legal position of consumers in relation to competition cases dealt with by NMa is discussed. In addition, court rulings which are important to NMa’s practice and a number of developments in practice, in particular in relation to concentration control, are discussed. Part 4 • Decisions The fourth part of this annual report provides a summary of NMa’s decisions and an overview of the decisions taken by NMa and court rulings in competition cases in 2002. Before this the formal process from guidelines, to decisions and to appeals to the Netherlands Supreme Court is described. 8 part 1 NMa in 2002: Central Issues Annual Report NMa 2002 | Mission, Objectives and Strategy 11 Mission, Objectives and Strategy Mission NMa’s mission: Making markets work. This, in short, is the mission of the Netherlands Competition Making markets work Authority. In practice, this mission is put into effect by monitoring markets and, where necessary and possible, by ‘creating’ markets through regulation. NMa, including its chambers, the Office of Energy Regulation (DTe) and the Office of Transport Regulation (currently being set up), strives to bring about effective competition which benefits consumers and businesses. NMa throws itself into the breach for consumers’ freedom of choice and opportunities for companies to compete. A market system that functions well, in which supply and demand are matched effectively and fairly, contributes to lasting economic development. A competitive environment stimulates innovation and promotes the competitive strength of the private sector in the Netherlands. In addition, competition contributes to optimising the price/quality ratio of goods and services, from which consumers benefit.
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