The Competitive Trading Act encourages businesses by strengthening competition.
Anti-competitive practices are not allowed and neither is abuse of a dominant position. Mergers, takeovers, certain types of venture, etc. with a combined turnover above a specific threshold are concerned in this regard.
The Dutch Competition Act prohibits cartels. A cartel is an agreement between businesses that impairs, limits or rigs competition. Within a cartel, competitors agree on e.g. price, market distribution, or the boycotting of certain suppliers or clients.
Arrangements between suppliers and clients, e.g. fixing the retail price for the consumer, rank as cartel agreements.
Abuse of dominant position
The Competition Act forbids businesses from abusing a dominant position. A business can be said to have attained a dominant position if it can act independently of competitors and clients. Abuse includes:
- offering products at below cost price in order to ward off newcomers;
- tie-in sales: selling entirely disparate products as part of a package;
- charging excessive prices for products.
The Dutch Consumer Authority promotes fair trade between businesses and consumers, taking the economic interest of consumers as its starting point. A consumer aggrieved about an unfair trading practice can report it to the consumer rights body, ConsuWijzer.
National competition authorities
The Dutch Competition Authority (NMa) is responsible for applying the Competitive Trading Act.
Strict provisions govern company mergers
An entrepreneur wishing to pursue a merger must notify this intention to the Dutch Competition Authority (NMa). This obligation depends on the total turnover of both companies.
Within four weeks, the authority reports back on whether a licence is required for the merger. If no licence is required, the merger can begin. In other cases, a licence application must be submitted.
If a business is suspected of breaching the Competition Act, it can be reported to the Dutch Competition Authority (NMa).