An overview of the Belgian Competition Authority’s activity

August 2019  |  SPECIAL REPORT: COMPETITION & ANTITRUST

Financier Worldwide Magazine

August 2019 Issue

2018 marked the 25th anniversary of the Belgian Competition Authority (BCA). On that occasion, the BCA took stock of its activity and priorities for the future. Its findings and conclusions were recently published, on 17 June 2019, in its 2018 annual report. This document, available in French and Dutch, also includes an annex on the enforcement priorities for 2019 that was published in February 2019.

The 2018 annual report revealed that, compared with 2017, the BCA devoted most of its time to dealing with an increase in merger control activity, which led to a slight decrease in antitrust investigations, even though the number of potential infringement cases remains high.

Regarding its activities relating to antitrust, the BCA rejected two requests for interim measures and imposed interim measures in two other cases. It also decided to close two investigations following commitments received from the companies involved and on the basis of the policy of priorities and available means. The BCA did not adopt any final decision on the merits (although the Prosecution Service submitted one draft decision to the Competition College in the ‘Order of Pharmacists’ case). No fines were thus imposed.

Among the decisions on interim measures, the Competition College imposed conditions on a company which produced covers for intelligent electricity meter boxes. The company had obtained an exclusive right to produce the covers following a public tender, and was suspected of abusing its monopoly position. The increase in requests for interim measures is the result of a significant reform of the procedure in 2013 and of positive decisions issued by the BCA in recent years.

Among the decisions made to close a case, one concerned the International Equestrian Federation (IEF). In 2015 and 2016, the Investigation and Prosecution Service (IPS) received several complaints against the IEF, including concerns over the transparency of the process and sanctions imposed for participation at events not approved by the IEF. The Competition College had imposed provisional measures in 2015, which were confirmed by the Market Court in 2016. After being informed of the IPS’s preliminary analysis, the IEF decided to offer commitments. The BCA considered the commitments sufficient and closed its investigation. Consequently, the IPS did not take a position on whether or not the IEF had infringed competition law.

In terms of merger control, the BCA approved 28 merger transactions under the simplified procedure (compared to 19 in 2017). It also cleared nine merger cases in first phase investigations (two with commitments), in a wide range of sectors, including automotive, cinema, commercial advertising and telecommunications. No second phase investigations were initiated.

As in 2017, the BCA was also involved in various disputes before the Belgian courts. The BCA’s decisions have been the subject of four judgments by the Brussels Court of Appeal and four by the Court of Cassation. These judgments went mainly against the BCA.

Indeed, the Market Court (a division of the Court of Appeal) ruled in three appeals proceedings against the BCA’s decisions and granted a request to challenge the members of the Competition College (following a resumption of proceedings by the College with the same composition). In the case concerning Kinepolis, the Market Court concluded that one of the conditions imposed was unfounded, as it was insufficiently and inefficiently justified. Following its judgment, the Competition College (with the same composition) decided to publish a more detailed explanatory memorandum in support of its opinion. This decision was challenged before the Market Court, which ruled that doing so had deprived the parties concerned of the possibility to challenge the members of the College. The Market Court therefore annulled the decision.

Concerning litigation before the Court of Cassation, the Court dismissed the appeal in cassation brought by the BCA against two judgments of the Court of Appeal in which it was held that the searches in question were unlawful.

The Court of Cassation also confirmed a judgment of the Court of Appeal which rightly ruled out the existence of a restrictive competitive practice on the grounds that the consultation between the companies concerned was solely for the purpose of lobbying in the context of public standardisation and certification bodies.

Finally, in the bpost case, the Court of Cassation ruled in favour of the BCA. In 2013, the BCA had condemned bpost for an abuse of dominance and imposed a fine of €37m. This decision had been overturned in 2016 by the Court of Appeal. In 2018, the Court of Cassation annulled the judgment and sent the case back to the Court of Appeal, which will now review the case on the merits.

At national level, the BCA drafted an amicus curiae for the Antwerp Court of Appeal concerning a dispute between educational publisher Van In, which also supplies schools, and Standaard Boekhandel, which sells educational material to individuals and institutional buyers, including schools. It also rendered several formal opinions (principally on draft decisions of the BIPT Council in the telecommunications sector), and submitted for public consultation a guide on the exchange of market and price information.

The BCA also maintained its contribution to the activities of the European Competition Network – which brings together the national competition authorities of EU Member States and the European Commission (EC) – and various other international forums.

In terms of advocacy and policy support work, the BCA mainly focused on reforming Book IV of the Code of Economic Law, as well as on the legislative initiative on abuse of economic dependence, which both passed into law, and were published on 24 May 2019. Book IV of the Code is already in force (10 days after publication), while the law on abuse of economic dependence will enter into force on 1 June 2020.

The primary objective of these amendments is to improve compliance with competition law and the functioning of the BCA with a view to making proceedings more efficient – in terms of deadlines and fines up to 10 percent of a company’s worldwide turnover, for instance. In this respect, the BCA has been empowered to sanction the abuse of economic dependence, either ex officio or following a complaint, with fines of up to 2 percent of the turnover of the company concerned. Penalties may also be imposed for failing to comply with the BCA’s decisions.

The BCA’s annual report also provides an opportunity to review the financial impact of its activities on the consumer. It concludes that the positive effects of its activities in 2018 for consumer welfare outweighed the costs. It considers that its economic impact ranges from €7.5m to €13m (depending on the methodology used). This lower economic impact, as compared to previous years, is mostly due to the fact that there were no infringement decisions in 2018 and that, in calculating economic impact, draft decisions or dawn raids carried out by the IPS are not taken into account.

Finally, as for priorities, although it will obviously continue to pursue serious breaches of competition law in all sectors, the BCA intends to focus its actions mainly in the sectors listed below.

First, the telecommunications market. The BCA will in particular ensure that competition between operators and market access are not hindered, in particular for joint offers.

Second, the distribution sector. Relations with suppliers, in some cases, have restrictive effects on competition between brands or between suppliers, for example when they restrict distributors in setting their prices or from the possibility of providing their services online.

Third, business and consumer services. The focus here will be to apply competition law to professional associations where they infringe the rules, and advocating the abolition of entry restrictions linked to the legal form in which a company provides its services.

Fourth, public procurement. The BCA notes that contracting authorities submit contracts annually for approximately €50bn (representing 10 to 15 percent of GDP), which are particularly vulnerable to cartels, since quantities do not adjust in line with price changes.

Fifth, the pharmaceutical sector. Particular attention will be paid to laboratory pricing, competition between wholesalers and distributors, competitive dynamics and innovation at the level of pharmacists.

Finally, the logistics sector. In view of Belgium’s geographical position and the density of its road, rail and waterway network, the BCA will ensure that healthy competition develops in this sector.

 

Annabelle Lepièce is a partner and Marguerite Soete is an associate at CMS Law. Ms Lepièce can be contacted on +32 (2) 743 69 34 or by email: annabelle.lepiece@cms-db.com. Ms Soete can be contacted on +32 (2) 674 85 51 or by email: marguerite.soete@cms-db.com.

© Financier Worldwide

BY

Annabelle Lepièce and Marguerite Soete

CMS Law

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