Competition in the Netherlands has weakened over the past decade, according to a new report from the Authority for Consumers and Markets (ACM), the country's competition watchdog. The agency warns that declining competition threatens not just prices and product quality, but also innovation and the economy's ability to withstand shocks.
The findings come from the ACM's first annual "State of the Market" report, published Monday alongside its agenda for 2026. The report examined trends from 2011 to 2023 and found troubling patterns across multiple indicators. Market concentration has increased, meaning large companies control more of the market. Fewer new businesses are entering markets, and fewer are leaving. Companies have also found it easier to raise their profit margins.
"That is a worrying development," said Paul de Bijl, the ACM's chief economist. The trends are particularly pronounced in sectors that were already concentrated, such as beverages, telecommunications, and electrical engineering.
Why competition matters
The ACM argues that competition is about more than just keeping prices low. Markets with multiple competing suppliers are more resilient when disruptions occur. If one company fails or cannot deliver, others can step in. With fewer competitors, such shocks hit harder.
Competition also drives innovation. When companies face pressure from rivals, they have stronger incentives to develop new products and improve existing ones. ACM chairman Martijn Snoep pointed to the major transitions facing Dutch society, including energy, digital, and climate, and argued that competition can force the innovation needed to address them.
"What matters is effective competition that delivers well-functioning markets for people and businesses, now and in the future," Snoep said.
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The threat of "killer acquisitions"
One particular concern highlighted in the report is the practice of large companies buying up potential challengers before they can become serious competitors. In sectors like digital services and pharmaceuticals, established firms sometimes acquire promising startups specifically to eliminate future competition. The ACM calls these "killer acquisitions" because they can snuff out innovation before it reaches consumers.
The pharmaceutical industry has received the most scrutiny for this practice. Research has estimated that between 5% and 7% of drug company acquisitions fall into this category, with acquired drug projects being less likely to continue development when they compete with the buyer's existing products. The European Commission published a study in late 2024 finding that roughly 18 pharmaceutical transactions per year between 2014 and 2018 were followed by unexplained discontinuation of overlapping research projects.
The problem for regulators is that many of these acquisitions involve companies too small to trigger mandatory merger reviews. Under current Dutch rules, the ACM can only review mergers where the combined companies have revenues above €150 million and at least two of them individually exceed €30 million. Many startup acquisitions slip under these thresholds.
The Dutch parliament is currently debating legislation that would give the ACM "call-in" powers to review smaller acquisitions that might harm competition, even when they fall below standard thresholds.
Private equity under the microscope
The report also highlights concerns about private equity investors, who have been acquiring businesses across multiple sectors. While the ACM acknowledges that private equity can bring investment and improve productivity, it warns that the strong profit incentives can harm consumers when markets are already concentrated.
The veterinary sector has become a test case. In December, the ACM released a draft report finding that private equity-backed chains now own about 41% of Dutch veterinary practices. The watchdog found evidence that prices rose significantly at some practices after they were acquired by chains, and it has proposed banning bonus structures that tie veterinarians' pay to revenues or profits.
Similar concerns have emerged in childcare, accountancy for small businesses, and healthcare. The ACM describes a pattern of "roll-up" acquisitions, where private equity firms string together many small purchases to build dominant positions in local or specialised markets.
Dependence on American tech
The report also flags what it calls "extreme Dutch dependence" on large non-European technology companies. Cloud services receive particular attention. Dutch businesses and government agencies rely heavily on American providers like Microsoft, Amazon, and Google for computing infrastructure.
These companies hold substantial market power partly because of what the ACM calls "high switching barriers." Moving from one cloud provider to another is expensive, time-consuming, and technically complex. As a result, customers rarely switch, even when they might benefit from doing so.
The European Data Act, which came into force in September 2025, aims to make switching easier by requiring cloud providers to enable data portability. The ACM plans to study how to reduce dependence further, possibly by supporting European alternatives.
No to relaxing merger rules
The ACM explicitly rejected calls from some quarters to loosen merger controls to allow the creation of "European champions," large companies that could compete with American and Chinese giants on the global stage. This debate was reignited by former Italian prime minister Mario Draghi's report on European competitiveness, published in September 2024.
The ACM argues that allowing more mergers would ultimately harm productivity and competition within Europe. Instead, it recommends reducing barriers within the European single market so companies can grow by expanding across borders rather than by eliminating domestic rivals.
Snoep emphasised that competition policy must balance multiple goals. "Competition is not a goal in itself," he said. "It must always be weighed against other public interests."
The agency's 2026 agenda identifies innovation and economic resilience as new priorities alongside existing focus areas of the digital economy, energy transition, and sustainability.
