The Netherlands: Public transport: NMa approves joint venture of Veolia Transport and Transdev/Connexxion

01 November 2010

Bastiaan de Bruijne

The Dutch Competition Authority (“NMa”) has granted its approval to Veolia Transport and Transdev/Connexxion to merge their public transport services (bus, train and taxi) into a joint venture.  The decision is based on the “bidding market” concept, whereby in markets characterized by purchasing based on public tenders, high market shares are subject to the consideration that they could change significantly as tenders are won or lost.

The approval follows a second phase investigation by the NMa, following a referral by the European Commission on 12 August. The merger was partly approved by the European Commission (Case COMP/M.5741) and referred to the competition authorities in France and the Netherlands.

Veolia Transport (through its subsidiary Veolia Transport Netherlands) and Transdev (through its subsidiary Connexxion) offer public transport services throughout the Netherlands as well as taxi services (both contracted and non-contracted).

The NMa has reviewed the impact of the merger on the national markets for public transport (road, rail, water) and transport by taxi in the Netherlands. Almost all public transport activities in the Netherlands are subject to public procurement rules. The contracts for public transport in the major cities (Amsterdam, the Hague, Rotterdam) fall outside the scope of this definition, as these are not subject to tendering.

The NMa decision contains extensive analysis of the so-called ‘bidding market’ for public transport in the Netherlands, which results from the fact that contracts are tendered. Market shares of parties may fluctuate regularly when contracts are won or lost. High market shares would therefore not reflect a market position. The main conclusion of the NMa is that despite the joint market shares of more than 50%, enough competitors remain active to maintain an effective ‘bidding market’. A recent market entry also proves that barriers are not too high.

In many aspects, the decision of the NMa reflects the approach of the European Commission in its decision of 11 August 2010 on the DB/Arriva merger (COMP/M.5855).

Source: www.nmanet.nl