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ACM fines Dutch rail operator (NS) for an alleged abuse of dominance

ACM fines Dutch rail operator (NS) for an alleged abuse of dominance

ACM fines Dutch rail operator (NS) for an alleged abuse of dominance

03.07.2017 NL law

On 29 June 2017, the Authority for Consumers and Markets (ACM) published the non-confidential version of a decision imposing a fine of EUR 40.95 million on Dutch railway operator NS for an alleged abuse of dominance. The ACM closed its investigation into NS' former CEO and CFO, finding insufficient grounds to hold them personally liable for the alleged infringements (decision I, decision II).

The ACM found that NS abused its dominant position on the 'main railway network' in the Netherlands by committing two separate infringements in relation to a public transportation tender in Limburg in 2014. The winning bidder gained the right to provide all bus and train transportation services in Limburg for a period of 15 years.

The first infringement concerns a predatory pricing allegation. According to the ACM, NS' subsidiary Abellio submitted a "lossmaking bid" in the Limburg tender procedure. The ACM concluded that NS' expected costs (including the cost of capital) would exceed its expected revenue. As a result, the ACM found that its competitors "could not match or surpass NS’ bid without suffering losses themselves".

The second alleged infringement concerns a combination of various forms of conduct. The ACM found that NS (i) received confidential information from a former director of one of its competitors, (ii) delayed its response and provided incomplete information to its competitors when requesting access to NS' facilities in Limburg (e.g. at train stations), and (iii) passed on confidential information it received from competitors to its own subsidiary Abellio. The ACM concluded that these various forms of conduct, taken together, constituted an abuse.

According to the ACM, both infringements were aimed at preventing NS' competitors from "proving themselves in Limburg". According to the ACM, if a competitor had won the tender, this may have led to further decentralization of the main railway network, in which NS holds a dominant position.

NS – and its shareholder the Dutch Ministry of Finance – announced that it will appeal the decision.

This article was published in the Competition Law Newsletter of July 2017. Other articles in this newsletter:

  1. Google gets a record EUR 2.42 billion antitrust fine for its shopping service
  2. Recent European Commission merger decisions signal an increased focus on innovation
  3. New Belgian Act on damage claims for competition law infringements

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