On 19 August 2015, the District Court of the Hague ("District Court") handed down its judgment in a dispute between a Dutch swimming pool and the municipality of Zuidplas. According to Article 25j of the Dutch Competition Act ("DCA"), the government is prohibited from favouring "public undertakings" over other undertakings. This judgment provides for a strict interpretation of the term "public undertaking", defined in Article 25g DCA.
The prohibition of Article 25j applies only to "public undertakings", that is, undertakings of which a governmental body "determines the policy" or in which a governmental body participates. Moreover, Article 25g DCA delineates four situations that qualify as "determining the policy" of an undertaking, that is when a governmental body (i) has a majority of the voting rights, (ii) is in a position to appoint the majority of the management, (iii) is the parent company or (iv) specific situations laid down in separate policy rules. The District Court ruled that the legal definition of "determining the policy", used to assess whether an undertaking is "public" should be interpreted strictly.
Before the District Court, the swimming pool claimed that the municipality of Zuidplas had infringed Article 25j DCA by giving an unfair advantage to competing swimming pools in the municipality. In this case, however, the District Court stated that the four situations provided in Article 25g DCA are intended to be exhaustive and should be interpreted strictly. Therefore, although amendments to the articles of association and other specific agreements were subject to approval by the municipality and the municipality was involved in the financial accounting of the undertaking concerned, these factors did not qualify as "determining the policy" within the meaning of Article 25g DCA. Consequently, Article 25j DCA did not apply.
Articles 25j and 25g DCA were introduced in July 2012, by the Public Enterprises Market Activities Act (Wet Markt en Overheid). This is the first time a court rules on the question of whether a governmental body is in a position to "determine the policy" of a public undertaking in the sense of the Public Enterprises Market Activities Act.