Martijn Snoep, Chairman of the Netherlands Authority for Consumers and Markets (ACM), has called (7 November) for urgent updates to Dutch competition law to address the rising issue of reduced competition, which is contributing to lower quality, higher prices, and less innovation in markets across Europe and the U.S.
Snoep’s recent blog post outlines ACM’s proposals for strengthening competition regulations, focusing on preventing unchecked acquisitions and implementing new regulatory tools to intervene in markets with limited competition.
Addressing Gaps in Transaction Scrutiny
Snoep argues that existing competition regulations are insufficient in scrutinizing smaller, incremental acquisitions, often referred to as “roll-up acquisitions,” that fall below financial thresholds but still harm competition. He advocates a “call-in power” that would allow ACM to review such acquisitions selectively based on competition concerns, regardless of financial thresholds. This power, recently backed by a Dutch House of Representatives motion, is intended to stop powerful companies from further consolidating their market positions by repeatedly acquiring smaller competitors without regulatory oversight.
Introducing a ‘New Competition Tool’ (NCT)
ACM’s second proposed reform is the establishment of a “New Competition Tool” (NCT), which would empower the authority to impose regulatory measures in markets with insufficient competition. This tool could address practices that hinder competition, such as high entry barriers for new competitors and buyer switching difficulties. The NCT is intended to restore competition by enabling interventions that would lower costs, improve quality, and encourage innovation. Several European nations, including the UK and Germany, have adopted similar powers, with examples like the UK’s current investigation into rising veterinary costs due to market consolidation. The Dutch Ministry of Economic Affairs is expected to propose a draft of the NCT in early 2025, after considering potential impacts on public interests, such as national security.
Safeguards Against Regulatory Overreach
Addressing concerns about overreach, Snoep outlines three proposed safeguards, or “guardrails,” to ensure ACM’s expanded powers are applied fairly:
- Thorough Economic Analysis: ACM would be required to conduct a comprehensive market analysis before imposing any measure to ensure proportionality and relevance to competition goals.
- Judicial Oversight: Courts would continue to review ACM’s actions, ensuring they are evidence-based and in line with due process.
- Ministerial Review for Public Interest: Finally, Snoep suggests a provision for ministerial intervention, allowing the Minister of Economic Affairs to annul ACM-imposed measures if they conflict with non-competition public interests, such as national security or privacy. This review process mirrors the current framework that allows ministerial clearance for acquisitions initially blocked by ACM.
A Broader EU Context
Snoep emphasizes that these reforms are aligned with recent EU-level recommendations, including those from former ECB president Mario Draghi, who advocates for similar powers across Europe to bolster competitive practices. Snoep argues that ACM’s proposed tools are consistent with longstanding practices in other regulated sectors, such as telecoms and energy, and are essential for fostering a more dynamic and competitive economy.
The ACM’s proposals signal a significant step in modernizing competition law to reflect the evolving landscape of global markets, aiming to support innovation and protect consumer interests in the face of increasingly consolidated industries.
Source: https://www.acm.nl/en/publications/blog-martijn-snoep-updating-competition-enforcement
