Belgian Competition Authority priorities: what to expect in the coming year

August 2022  |  SPECIAL REPORT: COMPETITION & ANTITRUST

Financier Worldwide Magazine

August 2022 Issue

On 12 May 2022, the Belgian Competition Authority (BCA) issued its annual communication setting out its policy priorities for the current year. This publication, which has existed since 2014, explains how the BCA selects its formal investigations and describes its strategic and sectoral priorities for competition policy.

In its communication, the BCA recalls the impact of the coronavirus (COVID-19) outbreak on the economy and the increase in energy prices, which are also affected by Russia’s invasion of Ukraine. Those events disrupt specific sectors, such as food and beverage, construction and industrial, that depend on the international supply of certain raw materials affected by the war in Ukraine.

The BCA also uses this opportunity to draw attention to its new powers following implementation of Directive (EU) 2019/1 of the European Parliament and of the Council of 11 December 2018 (ECN+ Directive) and its increased financial means that should allow it to become more effective.

Strategic priorities

First, the BCA highlights its recent reform following the implementation of the ECN+ Directive, which aims to strengthen national competition authorities (NCAs).

In fact, the ECN+ Directive aims to empower the competition authorities of European Union (EU) member states to be more effective enforcers and to ensure the proper functioning of the internal market. It therefore seeks to strengthen NCAs by ensuring that their independence, resources in the broad sense, and overall enforcement, investigation and fining powers, are guaranteed.

To guarantee the effectiveness of competition law enforcement, an NCA must be able to: (i) carry out inspections (dawn raids); (ii) address requests for information by undertakings and their employees and to interview employees; (iii) impose behavioural and structural remedies; (iv) enforce interim measures and commitments during investigations; and (v) impose fines and periodic penalty payments.

Moreover, the ECN+ Directive aims to prevent a divergent application of the European competition framework by improving cooperation and setting uniform standards for all NCAs when they apply EU competition rules, in parallel with national rules – namely in cases where trade between member states may be affected, or on a standalone basis.

The ECN+ Directive was due to be implemented into national law by 4 February 2021. After a slight delay, the Belgian legislator transposed it via law enacted on 28 February 2022 and published in the Belgian Official Gazette on 7 March 2022.

In light of the ECN+ Directive’s objectives, the transposition introduces several clarifications and modifications to the Belgian Code of Economic Law (CEL) that governs the institutional, procedural and decision making rules of the BCA.

Key amendments to the CEL are as follows. First, it broadens the areas in which the BCA can impose fines of up to 1 percent of worldwide annual turnover on companies, e.g., for failing to notify a notifiable merger and for not respecting interim measures, and issuing periodic penalty payments of up to 1 percent of average daily turnover for, by way of example, providing incomplete or incorrect information in response to requests for information, for missing the deadline to reply, or for not showing up at a hearing. Second, it makes the full set of rules on leniency programmes hard law by incorporating them from the guidelines into the CEL, while relaxing language requirements in this context but making summary leniency applications subject to stricter conditions. Third, it improves cooperation with other NCAs and the European Commission around dawn raids, leniency procedures and other information exchanges. Fourth, it amends the Belgian Criminal Code to allow criminal immunity for bid-rigging infringements when an application for immunity to the BCA has been successful and all information pertaining to the infringement has been received by the public prosecutor. Fifth, it specifies the powers of the BCA in dawn raids (including the screening of digital files) and limits the exclusion of unlawfully obtained evidence in competition law investigations. Sixth, it introduces the option for the BCA to appeal to the Brussels Court of Appeal a judge’s decision not to allow an inspection. Finally, it enables concentration parties to appeal to the Market Court following a decision by the competition prosecutor to refuse the use of the simplified procedure.

The ECN+ Directive also aims to oblige member states to substantively enhance NCAs’ resources. The BCA has for decades requested more financial and human resources to effectively carry out the task of safeguarding competitive market conditions in Belgium by investigating anticompetitive practices. In this regard, the new competition prosecutor general had already announced that an additional budget of €600,000 (of a total budget of €7.5m) had been allocated to the BCA.

Aside from other substantive changes to the CEL, a fee has been introduced for merger filings with the BCA. Under the new law, the notifying parties have to pay a one-off filing fee of €17,450 in the case of a simplified procedure and €52,350 for the normal procedure. The new financial resources and an increase in its annual budget should allow the BCA to be globally more effective as well as active in informal and strategic policy, advocacy and communication.

In addition, the BCA will concentrate its efforts on the potential disruptions caused by the pandemic to specific sectors, addressing issues such as commercial distribution, food value, supply chain disruption, and the provision of financial services and healthcare (including distribution of drugs, vaccines and medical equipment).

Further, the BCA intends to follow-up on the application of competition law in the context of the green and circular economy in Belgium. Healthy competition should encourage undertakings to make more efficient use of raw materials and scarce resources. The BCA will adopt new measures to specify its position to ensure coherence between competition law and sustainability policies.

Sectoral priorities

In line with priority areas identified in previous years, the BCA intends to continue acting in the following sectors: (i) services to undertakings and consumers, particularly the regulated professions, such as financial, legal, accounting and security services; (ii) the food industry, notably concerning distribution contracts between retailers and suppliers that restrict retailers from setting their own prices or offering their services online; (iii) the energy sector, currently an area of specific focus because of the significant increase in prices following the pandemic and the war in Ukraine; (iv) the media sector, which is being scrutinised regarding new developments in terms of content and advertising, with the BCA intending to make sure those initiatives, notably the creation of local platforms with excessive market power, will not lead to new restrictions of competition; (v) the pharmaceutical sector, where the focus is on prices applied by laboratories, competition between wholesalers and dispatchers, and competitive dynamics and innovation by pharmacies, following several investigations that led to the condemnation of wholesalers and the Order of Pharmacists; (vi) the telecommunications sector, including 5G network deployment, which is the subject of a formal investigation announced on 17 June 2022 regarding possible distortions of competition in the rollout of fibre optic networks in Flanders; and (vii) sports competitions, which have been the subject of several investigations following complaints.

The BCA will also address the digitalisation of the economy due to of the risk of abuses of dominance, abuses of economic dependency and infringements of competition law linked to digital transformation in several sectors, notably services to undertakings and public authorities.

However, public procurements are no longer included in the list of priorities. This does not mean, of course, that complaints will not be investigated. As for the types of infringement prioritised, the BCA will seek an appropriate balance between obvious hardcore infringements and more complex or innovative cases.

Analysis grid

The BCA has included for the first time in its annual communication an analysis grid of priority cases, which will be retained for investigations. The factors determining the importance of a case are: (i) the impact of the alleged infringement; (ii) the strategic importance of the case; (iii) the resources that the BCA will need to mobilise; and (iv) the risk the case entails in terms of a potential result.

Conclusion

The end of the pandemic, the arrival of a new competition prosecutor general and additional financial resources should herald a new era for the BCA.

In that respect, its annual communication on policy priorities for 2022 does not set particularly surprising concrete objectives. The sectors that are being specifically monitored remain relatively similar to those of past years. In fact, only the food industry and sports competitions have been added in 2022 to the list of sectoral priorities. Furthermore, communication remains relatively vague in terms of advocacy, guidelines to be adopted, and other informal and strategic policy. Time will tell if the BCA meets its ambitions.

 

Annabelle Lepièce is a partner at CMS Belgium. She can be contacted on +32 (2) 743 6934 or by email: annabelle.lepiece@cms-db.com.

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Annabelle Lepièce

CMS Belgium

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