ACM: staying extra alert to businesses taking advantage of current market conditions
The effects of the Russian invasion of Ukraine, among other current events, have been felt by economies across the globe. Markets that the Netherlands Authority for Consumers and Markets (ACM) oversees have thus been affected, too. The high prices for energy, fuel, and groceries have posed a problem for more and more people, many of which are already in financially vulnerable positions. ACM cannot lower those prices, but, in these market circumstances, it stays extra alert to businesses taking advantage of the situation. Think of businesses that mislead consumers by not being clear about cost increases and concealing them in additional costs. Or think of competitors that agree with each other on how to include the higher prices for raw materials in their prices. In addition, ACM makes sure that businesses that supply retailers do not press them to implement price increases, either gently or forcefully. In times like these, people and businesses are hit extra hard by these kinds of abuses. That is why ACM will take action if we have concrete evidence of such behavior.
Martijn Snoep, Chairman of the Board of ACM, adds: ‘Our mission is to ensure that markets work well for people and businesses, now and in the future. We haven’t found any indications that the higher prices are caused by a lack of competition in the Netherlands. However, we do see that this situation is causing a lot of trouble for many people. That is why we will take action immediately if businesses take advantage of the situation.’
ACM is calling on people to file reports about possible abuse, for example on its website. ACM’s consumer information portal ACM ConsuWijzer providers information for consumers that have run into problems because of the high energy prices.
Updates on ACM’s 2022 activities
In early 2022, ACM announced that, in its oversight efforts in 2022, it would focus on energy and sustainability, the digital economy, and the housing market. ACM conducts oversight over markets, and, in that effort, takes into account the interests of all people. In the first half of 2022, consumers contacted ACM almost 30,000 times with their questions and reports. Like in the final months of 2021, a considerable share of those questions were about energy and heat. These questions reveal that many consumers are having a hard time dealing with the increased energy costs. Consumers on variable-rate contracts feel the pinch of energy prices much sooner because their suppliers are allowed to adjust their rates twice a year (or more often if circumstances so require). Consumers on fixed-rate contracts are confronted with the large difference between their old and new rates when their contracts expire.
The energy transition and sustainability
Since last year, there has been a lot of tension on the energy market, caused by scarcity, the Russian invasion of Ukraine, and society’s big push for sustainability. Earlier this year, ACM announced that, in the coming heating season starting on October 1, it will impose additional requirements on energy suppliers that supply or want to supply electricity or natural gas to consumers. At the same time, ACM continues full steam ahead with the creation of conditions for a more sustainable supply of energy. Following an assessment by ACM of system operators’ investment plans, it was revealed that the problem of capacity scarcity (also called congestion) on grids is becoming increasingly urgent. As system operators are not able to complete all of their planned grid expansions on time, ACM finds it important that they are able to give priority to projects that contribute positively to public interests such as the energy transition. At the same time, it is important that system operators do everything in their powers to optimize utilization of the existing capacity. That is why ACM has stimulated system operators to use congestion management more often. It is sometimes necessary that businesses slightly restrict their mutual competition in order to help the energy transition. They can do so under certain conditions. For example, in February 2022, ACM was in favor of two sustainability initiatives where competitors in the energy sector worked together. In order to help a more sustainable economy get off the ground, it is vital that businesses are able to differentiate themselves with on sustainability. However, a study into the use of sustainability claims in various sectors revealed that some businesses present themselves as more sustainable than they actually are. That is why ACM is carrying out follow-up investigations into misleading sustainability claims. A broader study that ACM recently had commissioned into the effects of sustainability labels on consumers revealed that such labels provide consumers too little information for giving them any assurance. In that context, ACM has called on the legislature to create a clear statutory framework for labels.
The digital economy
People and businesses must be protected against online misleading practices and abuses of dominant positions. As part of a broader investigation, Apple recently, at the insistence of ACM, changed its unfair conditions for its App Store. As a result thereof, dating-app providers can now also offer other methods of payment in their apps or refer to payment options on their websites. Following an ACM intervention earlier this year, influencers stopped their misleading practice of buying fake likes on a large scale. In addition, ACM in early 2022 warned tens of thousands of buyers of fake likes and fake followers that they engaged in misleading practices by using such fake reviews. Online misleading practices continue to be one of ACM’s key priorities. After the summer, ACM will publish updated Guidelines on the protection of the online consumer, which will be brought in line with new insights and new rules.
With its oversight efforts, ACM wishes to ensure that the Netherlands is able to reap the benefits of an open and fair digital economy that works for all people and businesses. In June 2022, ACM launched a campaign to help seniors search online more safely. The campaign was prompted by a recent survey, which revealed that one in three seniors (65 and up) are not aware that many consumer problems often begin with an online search and a click on an ad that leads to an untrustworthy site. Access to fast broadband at reasonable prices is a pre-condition for reaping those benefits. ACM in April published a draft decision about the proposals made by telecom operators KPN and Glaspoort regarding lower tariffs and improved conditions for broadband providers that offer their services using KPN’s and Glaspoort’s fiber-optic networks. They put forward these proposals after ACM had launched an investigation into the competitive situation on this market. Other market participants have already been able to submit their opinions about these proposals. ACM will publish its definitive decision soon.
Further digitalization of health care helps improve the quality thereof and reduce the costs. In that context, the systems that health care providers use for exchanging information are crucial. ACM has found indications that health care IT markets currently do not function properly. This spring, ACM published the executive summary of its market survey into health care IT. Following up on that market survey, ACM today publishes its draft guidelines “well-functioning markets for health care IT”. In these guidelines, ACM clarifies what requirements IT suppliers must meet under the Dutch Competition Act, and what the collaborative opportunities for health care providers are when procuring IT services.
The housing market
The Dutch housing market is extremely tight at the moment. ACM has a small role on the housing market, but the protection of consumers against unfair practices by providers on the housing market (rentals and sales) deserves special attention. That is why ACM is conducting a market study into market power on the municipal-land market, with extra attention to plots that can be developed, but where no development is planned. This study is expected to be released in the second half of 2022.
In April 2022, the Dutch Trade and Industry Appeals Tribunal (CBb) handed down its ruling in a case in which ACM had imposed an order subject to periodic penalty payments on a rental agency (in Dutch) forcing it stop charging lessees illegal agency fees. The court confirmed the conclusion that the agency fees were illegal, but also ruled that the relevant law does not grant ACM any powers to enforce that same law. This means that, for now, any lessees that are confronted with agency fees have to go to court themselves. However, the barriers to do so are quite high, particularly in today’s tight housing market. The new bill on “good landlordship”, which was recently submitted by the Minister of the Interior and Kingdom Relations (BZK), proposes to provide municipalities the opportunity to take enforcement action against illegal agency fees.
About ACM
ACM contributes to realizing a healthy economy by ensuring that markets work well for people and businesses, now and in the future. ACM enforces the rules that apply to businesses by tackling unfair commercial practices, and by promoting compliance with those rules. ACM provides information and guidance so that everyone knows these rules, and is able to exercise their rights.