Window cleaners fined for cartel forming: Ten window cleaners in The Hague have been fined up to €1,000 each by the Dutch competition authority NMa for dividing up the streets in a new residential area between them. This ruling makes it clear to window cleaners nationwide that they cannot make deals with each other about who takes which street,' NMa board member Henk Don said in a statement. Don also said the NMa welcomed a move to set up an official register of window cleaners, as long as it was not anti-competitive and respected the right of householders to choose their own window cleaner.
A summary of the NMa decision of 20 December 2011 Case 6425/Glazenwassers: The Board of Directors of the Dutch Competition Authority (NMa) states in this decision that ten window cleaning companies in 2006 were active in the private market (washing windows at houses) that the prohibition in the Competition Act were violated. These ten companies have broken the law by agreeing with each other that, (from the completion of the new housing, in the Hoorn Zoom, City of Delft) in 2006 to rule over (as much as possible) & divide business from the streets and share between the work between them.
Fines: The Board therefore imposes fines: nine window cleaners get a fine of EURO 1000, one window cleaner received a symbolic fine of EUR 1000 (because of his advanced age in combination with other circumstances, he is no longer active in the window cleaning). While creating a market sharing agreement is a serious offense, the fines are low, because only a low turnover was involved with the deal. For the sole proprietors where in this case the fines are small, it is still a hard fine for the small turnover made. And even if it concerns a relatively small case, the NMa considered it important to act, because many customers had difficulty encountering & finding another window cleaner.
What happened? The ten window cleaners in early 2006 sought contact with each other and decided to "join forces" so to stop other window cleaners ('strong stand') at the expected completion of the Horn Zoom to make a 'closed shop.' Six of the ten window cleaners had met at McDonald's in Delft-Noord and discussed the division of labor in the service delivery of the Horn Zoom. After the meeting at McDonald's, the ten window cleaners continued (telephone) contact. They talked about the shared business drive to the Horn Zoom, the division of work and finding out the date of delivery of services to the district houses. The window cleaners also talked to each other about the 'securing' of the existing positions of the 'group' in Wateringseveld, compared to other groups of window cleaners. The actual distribution of work is no longer in existence there because of FIOD surgery that used some other window cleaners. It remained that an agreement has been reached.
Restriction of competition: The agreement restricted competition, because each window cleaner in the group by the agreement of the decision would have a private, exclusive area with streets, where other window cleaners could not come - nor that of their own group, or others. The new residents of the district were a 'fait accompliace' and have no choice. Because window cleaners usually keep to an "Unwritten rule" not to serve customers in streets or neighborhoods that have a different window cleaner, this also worked as a distribution agreement for any time off needed, covering work between them. Moreover, it commited the group to stand up for each other, and if necessary, stand together against 'Intruders' actions.
No justification: The window cleaners argued that the agreement would be needed for their livelihood (their own area made it possible to operate at lower cost) and "to stop infighting at the door of the customer." The NMa stated it was not a good enough reason for a street or neighborhood to own the distribution of services by a cartel. The NMa considers window cleaners in competition with each other to reduce costs on its own merit, and that nothing should prevent their customers to approach other window cleaners. It is up to consumers to decide which window cleaner could be found at will.
Broader offense unproven: In the report the preliminary findings from the investigation by the NMa, it was suspected that the group were in violation of the Competition for other agreements in the period 2003-2006 within a large area of the Randstad (Hoofddorp-Rotterdam-The Hague-Utrecht). Besides the already mentioned ten window cleaning companies considered, another thirteen other window cleaners who were involved in streets "leased" from a fixed group of lessors. The NMa, after examination of the facts concluded, that these other agreements were not proven and the only agreement on the Horn Zoom case, that the fines were made.
Criminal cases: Cases against some of the companies where previously a criminal investigation was ran which followed convictions for tax evasion, forgery and money laundering. The NMa has an FIOD file from the prosecution, including wiretapping and report interrogations, from which the Council the violation of the prohibition determined the degree of seriousness. The offense for which the NMa fines are imposed, however, is entirely separate from the earlier criminal cases, only the NMa, and not the OM is competent in the field of competition law. The NMa did not think that the window cleaners should be "doubly punished", and saw no reason to refrain from fining. The window cleaners who have received a decision, may lodge an objection, and then possibly appeal to the courts.
NMa fines Dutch window cleaning cartel agreement: The Dutch Competition Authority (NMa) fined ten window cleaners that made an illegal cartel agreement. The ten window cleaners each agreed in 2006 to divide the streets between them in a new neighborhood in Delft, The Hague and thus to determine which street who would perform the window cleaning. "This case makes clear that the NMa agreements on servicing street and neighborhood distribution can not be tolerated," said Henk Don, director of the NMa.
Window cleaners that are "appropriating" leads to the chagrin of many consumers who have no option to go to another window cleaner, can now, if they are dissatisfied. NMa therefore welcomes the initiative of the General Industrial Crafts (HBA) to open a public register where private users can pick window cleaners themselves after registering. An important condition for this list, is that a window cleaner is recognizable and can be identified by a consumer in respect to which window cleaner they would choose. Don:"I hope that through the initiative of the HBA that the 'unwritten rule' to "own" other people's streets has had its day. "It helps consumers to choose a window cleaner who is reliable & to win customers by reputation." Obviously it is important that such a register does not restrict competition. Every reputable window cleaner should be able to participate in this register. The NMa will therefore in consultation with the HBA register set objectives where the requirements are non-discriminatory and clear in advance.
The fines: €1,000 per window cleaner were tailored to the limited extent of each violation. This involved small sole traders with a low turnover. The investigation into the window cleaning cartel was made after the Public Prosecutor (OM), who was investigating the financial fraud by window cleaners, that the cartel material was found. The NMa will join forces (by January 1, 2013) with the Consumer Authority, OPTA under the name Consumer Market Authority (ACM). The new regulator will make markets work for the interests of consumer protection. The ACM will work on three pillars: consumer protection, competition regulation and sector-specific market surveillance.
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