The Netherlands Competition Authority (NMa) has imposed fines, totaling EUR 18 million, on four major laundries for engaging in market-sharing activities. These industrial laundries wash, among other items, bed linen and working-clothing for health care providers. Total annual turnover in this market is EUR 250 million.
The NMa considers proven that the industrial-laundry cartel have shared the Dutch market at least since January 1, 1998. The laundries involved were each allocated a region. They were not allowed to compete with one another outside their regions. At a later stage, they were prohibited from actively recruiting customers outside their regions. This step was the more reprehensible, given that many health care providers do not switch laundries easily. Documents reveal that the industrial laundries involved were very much aware of the fact that they restricted competition. ‘These players chose collusion over competition,’ says Chris Fonteijn, Chairman of the Board of the NMa, commenting on the fines. Mr. Fonteijn continues: ‘It is very unfortunate that these undertakings, which represent a considerable share of the market, deliberately eliminated competition. Their long-standing market-sharing agreement resulted in health care providers not being offered competitive bids from these industrial laundries, denying them the benefits of full competition.’
The laundries in question organized their collaboration as a franchise. They met several times a year, and they also discussed the market-sharing agreement outside these regular meetings. The cartel had a combined market share of 35 to 50 per cent.