NMa Prohibits Anti-Peddling Scheme in the Painting Branch

Today the Dutch Competition Authority (NMa) determined that the anti-peddling scheme applied in the painting branch contravenes the prohibition on cartels and is therefore prohibited. In November 1998 NMa indicated in a provisional ruling that various tender schemes in the construction sector did not qualify for exemption. With the exception of the scheme in the painting branch, the other schemes were withdrawn at the time. In its definitive decision NMa has now determined that the schemes, of which if was notified by Vereniging Belangen Behartiging Schildersbedrijf [Association for the Promotion of the Interests of the Painting Sector] limit competition and are therefore prohibited.

This relates to schemes that contain agreements relating to the joint behaviour of companies that submit tenders for painting projects. The participants in the schemes, for instance, are obliged to register at a central point if they wished to submit a tender. Following this, it is decided centrally which supplier will be granted the exclusive right to negotiate with the contractor for a period of two months . The contractor may not negotiate with other suppliers in the interim. According to those involved, this is done to avoid 'peddling'. In NMa's opinion, the contractor is perfectly able to assess the tenders himself and what the branch refers to as 'peddling' is a normal form of competition. The suppliers, who are registered centrally, receive payment for their calculation costs. In the opinion of NMa, this system results in a price increase. Compliance with the schemes may be enforced by imposing sanctions. These elements of the scheme applied in the painting branch were further reasons for the prohibition that has been announced.