A whole variety of situations may arise in which businesses experience competition from government authorities. Just a few possible examples include the operation of car parks or bicycle parking facilities by municipal authorities, the leasing of real estate held by government bodies, the lending of CDs and DVDs by a municipal library and music or sport-related education provided by a government institution. The Dutch Act on Government and Free Market obliges government authorities to comply with a number of rules of conduct when undertaking activities of this kind, with a view to countering unfair competition from government.

The following rules of conduct apply:

  • Requirement to include all costs: governments should include in the sales price at least all the costs of economic activities
  • Prohibition against preferential treatment: governments are not allowed to give preferential treatment to their own government undertakings, over their competitors.
  • Use of data (for other purposes): data acquired by governments in exercising their authority under public law may only be used in exercising economic activities, if other organisations or undertakings are able to also use that same data (according to the same conditions).
  • Separation of roles: if governments exercise a specific economic activity and in respect of that activity assume the role of administrative body, they must guarantee that the same persons are not involved in the administrative and economic activities.

The Authority for Consumers & Markets (ACM) is responsible for supervising compliance with the rules of conduct. The ACM is authorised to carry out supervision at its own discretion or can act in response to the complaints or signals for example from disadvantaged undertakings. The ACM can decide to announce that it has observed a violation of the rules of conduct; if it considers that such a notice is insufficient, it can impose an Order for incremental penalty payments on the government body, to bring about an end to the violation. Disadvantaged undertakings can also institute proceedings before the civil courts.

BANNING has special expertise in the field of market and government-related issues. Our client base includes both government bodies and businesses.