Background
 

The Dutch Ministry of Finance has asked the Consumer and Market Authority (“ACM”) to see if there is reason for launching a study into the savings market and into the savings account interest rates in the Netherlands, which are lagging behind the interest rates of the European Central Bank (“ECB”). The ACM sees sufficient reason for such a probe, and has now announced its decision to commence this probe. 

Ever since the ECB increased the interest rates to counter the high inflation there have been discussions about the passing-on of these increased interest rates to customers who hold saving accounts with Dutch banks. The current high interest rates allowed banks to increase their turnover – and consequently their profits – significantly, as many banks do not tend to raise interest rates to the same degree for saving accounts. 

The profits made by banks on the basis of the discrepancy between the interest rates on loans and the interest rates on savings, has already led to drastic measures from some EU member states. For instance, Belgium and Spain issued a type of state bonds for individuals at an attractive interest rate. Italy recently announced a levy on a specific tax on excess profits. 

In the Netherlands, the effects of such measures were explored but with an outgoing government and forthcoming elections, implementing such measures is difficult. However, in the meantime and for the sake of making a well-considered decision, the government has asked the ACM to investigate the market for saving accounts. The ACM responded on 30 October 2023 that it will indeed look into the Dutch market for saving accounts. 

What is the ACM looking at?

The ACM states that there are indications that Dutch consumers only benefit to a limited extent from the increased interest rates on the European market. The ACM finds that there are providers (including international ones) that, at first glance, offer Dutch savers higher rates than those offered by the major banks in the Netherlands. However, consumers only appear to switch to these banks to a limited extent. That is why the ACM has decided to launch a study into the functioning of the Dutch savings market. In particular, the study will look into why consumers rarely switch and why major banks do not offer higher savings account interest rates.

The ACM has launched a broad market study into the functioning of the savings market and into the effectiveness of competition thereon. This may result in recommendations to the Dutch legislature, for example if it turns out that the market is not functioning well.

What is next?

The ACM enforces compliance with the competition rules, and also has the power to conduct market studies into the functioning of markets. As part of this broad market study into the Dutch savings market, the ACM will also gather information from the sector-specific regulators the Dutch Authority for the Financial Markets (“AFM”) and the Dutch Central Bank (“DNB”), among other relevant market participants. It expects to publish its results before the summer of 2024. 

The Dutch market for saving accounts is dominated by three big banks, i.e., ING, Rabobank, and ABN Amro. Their combined market share is approximately 80%.[1] The obvious question therefore is whether these banks, if indeed (jointly) dominant, abuse their market power or whether there are other factors at play preventing the interest rates on saving accounts from rising. It is noteworthy that the probe of the ACM is of an exploratory nature and will not, at least not directly, result in the establishment of a breach of competition law. Also, the Dutch regulator, although they are lobbying for it, does not have a formal market investigation tool (like in the United Kingdom) that could lead to imposing remedies without the establishment of a breach of competition law.

For more information, please contact Matteo Stainer and Janneke Kohlen.
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[1] https://www.banken.nl/bankensector/marktaandeel; https://www.nu.nl/economie/6288763/ook-abn-amro-pakt-stevige-winst-door-lagere-rentes.html.