Healthcare Sector in the Spotlight - International Law Office

Cartel Investigations
Lower Merger Thresholds
Revised Guidelines

The Competition Authority has expressed its concern recently over the existence of possible cartels in the healthcare sector. In addition, lower thresholds have been introduced for concentrations between healthcare companies. The authority has also recently revised its healthcare-sector guidelines.

Cartel Investigations

The authority has apparently issued a statement of objections to a number of home care organizations regarding participation in alleged cartels and is awaiting their reply.(1)

During the presentation of its "2008 Agenda", the authority stated that there are signs of home care organizations participating in market-sharing agreements. It has asked them to confess their participation to the Leniency Office in order to receive immunity from a fine or a fine reduction.(2)

Lower Merger Thresholds

As of January 1 2008, healthcare organizations must notify their concentrations to the authority when, in the previous calendar year:(3)

• at least two of the companies concerned each generated a turnover greater than €5.5 million through the provision of healthcare services;
• the combined worldwide turnover of the companies concerned exceeded €55 million; and
• at least two of the companies concerned each achieved a turnover in the Netherlands of at least €10 million.

The second and third threshold relate to the total turnover achieved by the companies concerned, irrespective of whether this was achieved through healthcare-specific activities. The first threshold deals specifically with the turnover achieved through healthcare activities.

Many healthcare concentrations fall outside of the regular concentration thresholds due to low turnovers. However, these concentrations may still have a negative impact on competition due to the often narrow scope of the relevant geographic markets involved. The lowering of the notification thresholds aims to resolve this problem by forcing notification of more healthcare concentrations.

Revised Guidelines

The authority has revised its healthcare-sector guidelines to include the recent changes resulting from the controlled liberalization of this sector.(4) Apart from a clarification of the lower thresholds for healthcare concentrations, the guidelines set out the authority’s views on the definition of the relevant markets in the healthcare sector and the permissibility of cooperation agreements between healthcare providers.
It has also published a flow chart for quick assessment of possible competition concerns in the healthcare sector.(5)

For further information on this topic please contact Martijn Snoep or Jolling De Pree at De Brauw Blackstone Westbroek by telephone (+31 70 328 53 28) or by fax (+31 70 328 53 25) or by email (martijn.snoep@debrauw.com or jolling.depree@debrauw.com).

Endnotes

(1) See the authority's Jaarbericht 2007, p 5.

(2) See the authority's press release of January 10 2008. Apart from the healthcare sector, the authority has designated the following sectors as a priority for 2008: the energy sector, the financial services sector, the food and agriculture business sector and the postal market. For more information see "Competition Authority Adds to Usual Suspects".

(3) See the Ministry of Economic Affair's press release of December 6 2007.

(4) Richtsnoeren voor de zorgsector, December 12 2007.

(5) Stappenplan bij de richtsnoeren voor de zorgsector, December 12 2007.