Netherlands Competition Authority Rules in Favor of Carglass in
September 6, 2011
The Netherlands Competition Authority (known as the NMa) recently
issued a ruling in favor of Carglass Netherlands, three years after
a competitor, Auto Mark BV, filed a complaint against the company.
The complaint alleged that the rebate system that Carglass, a Belron-owned
company, uses in its relationship with insurers abuses its dominant
position in the nation's auto glass market, according to the NMa's
NMa looked at the company's position in the market and says it
found that Carglass holds approximately a 40 percent market share,
which NMa did not deem as dominant-negating the need to look at
the rebate abuse claim, according to the decision.
In making their decision, NMa officials say they studied a variety
of aspects of the auto glass repair and replacement industry, such
as the size of the Netherlands' auto glass market and the role insurers
play in the auto glass market. NMa suggests that, in general, insurers
are facing rising claims, and attributes this to possible fraud
and also auto glass companies' sales initiatives, such as approaching
drivers in high-traffic areas.
NMa also suggests claims are on the rise due to national advertising
that educates drivers on the dangers of windshield damage.
NMa follows its look at how insurers' role in auto glass with a
look at how they are responding to rising claims. In its complaint,
Auto Mark suggested that one way insurers limit claims is through
their relationships with "approved" companies or refusing
to reimburse invoices from "unapproved" businesses.
NMa also looked at insurers' negotiation capabilities, and quote
officials from Netherlands-based Glass Garage, who suggested that
insurers' involvement in the market is creating a downward pricing
trend for auto glass businesses.
However, Auto Mark alleged in its complaint that an insurance paradox
also exists, and that insurers are colluding to operate nationwide
chains to keep auto glass prices artificially high, according to
NMa. NMa ruled that this is implausible, though, as more likely
insurers would negotiate lower costs to keep premiums low. NMa also
responded to this claim with an argument that price is not the only
factor of competition, and that other items come into play-such
as 24-hour service, mobile service, etc.
Despite the variety of research included in the NMa decision, ultimately
the group ruled that there was insufficient evidence that Carglass
holds a dominant economic position.
The original complaint was filed in November 2008, and in September
2009 rejected Auto Mark's request for action against the company;
Auto Mark appealed that decision in October 2009, leading to the
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