The European Antitrust Review 2014 Section 3: Country chapters

Belgium: Overview

This contribution provides an overview of the most important and relevant developments in Belgium over the past 12 months, illustrated with some recent cases. In the past year, Belgian antitrust law has been marked by an important event: the adoption, on 3 April 2013, of a new act inserting competition law provisions into the Belgian Code of Economic Law and abrogating most of the provisions of the current Belgian Act on the Protection of Economic Competition (the APEC). The new act is expected to enter into force before the end of 2013.

Regulatory framework

On 27 December 2012, draft legislation substantially modifying the current competition law was tabled in Parliament. After months of discussions, the Belgian Parliament adopted on 3 April 2013 an act inserting a new Chapter IV entitled ‘Protection of Competition’ and a new Chapter V entitled ‘Competition and Price Evolution’ into the Belgian Code of Economic Law. At the time of writing, that new act is not yet applicable, but it is expected that it will enter into force before the end of 2013 (most probably on 1 September 2013). The most important changes introduced by the new law will occur in the following areas.

New composition of the Belgian Competition Authority (the BCA)

Under the current legislation, the BCA consists of two distinct components: the Directorate-General for Competition (Competition Service) and the Competition Council. The Competition Council consists of the Competition Council stricto sensu (ie, an administrative tribunal), the College of Competition Prosecutors and the registry. Under the new legislation, the BCA will consist of four distinct components: the president of the BCA, the Competition College, entrusted with decision-making powers, the Competition Board (directiecomité/comité de direction) and the Auditorat, tasked with investigative powers under the direction of the General Prosecutor.

New settlement procedure

Article IV.51 of the new legislation establishes a new settlement procedure which will allow the early settlement of investigations, notably in order to save time and money. A 10 per cent reduction in the antitrust fine will be offered to undertakings concluding such a settlement with the Auditorat. In such cases, the Auditorat will be competent to adopt a final decision, which is deemed equivalent to a decision of the Competition College. The new legislation however stipulates that no appeal can be lodged against a settlement decision adopted by the Auditorat.

Broadening of the personal scope of competition law

In 2009, the minister for economic affairs requested the Directorate-General for Competition to investigate the desirability and feasibility of establishing under the Belgian law criminal sanctions for competition law violations. The request follows from the explicit recommendation formulated in the OECD economic survey about Belgium. Accordingly, on 20 November 2009, the Director-General presented a proposal concerning the introduction of criminal sanctions within the Belgian competition law system. The new legislation does not follow the Director-General’s proposal as it does not establish criminal sanctions. However, one of the major changes under the new legislation is the introduction of a possibility of imposing administrative penalties on individuals for direct involvement in hard-core antitrust infringements (with the exception of abuses of a dominant position). Along therewith, the new legislation also introduces the possibility for individuals to lodge a personal leniency application.1

Cartels

Under the current legislation, article 2 of APEC prohibits ‘agreements between undertakings, all decisions by associations of undertakings and all concerted practices, the aim or consequence of which is to prevent, restrict or distort significantly competition in the Belgian market concerned or in a substantial part of that market’. Article IV.1 of the new act reiterates the same provision, and adds a new section 4 prohibiting natural persons from negotiating or agreeing with competitors in order to fix selling prices, to limit production or selling and/or to share markets on behalf of an undertaking or an association of undertakings.

In 2012, the Competition Council did not take any new decisions in relation to cartels. On 27 April 2012 and on 13 July 2012,2 the president of the Competition Council extended until the end of the year some existing interim measures granted in 2010 to Spira, an Antwerp distributor of rough diamonds. According to those measures, De Beers, which had supplied Spira since 1935, was ordered to continue supplying the latter with rough diamonds.

The Competition Council also quashed two decisions of the College of Prosecutors in relation to alleged anti-competitive practices, both closing the case in light of the prioritisation policy. The Competition Council recalled that a decision rejecting a complaint should at least indicate the factual and legal elements which have played a role in the Prosecutor’s decision not to conduct an investigation. In the absence of such indications, the Council considered in both cases that the College of Prosecutors did not provide sufficient motivation for its decisions rejecting the complaints.3

On 28 February 2013, the Competition Council imposed fines on four major flour mills for a cartel on the market for production and sale of flour in Belgium between 2000 and 2006. The contested practices consisted mainly of coordination of price increases and exchange of commercially sensitive information. The investigation started after the introduction of leniency applications by two of the participating mills, following investigations conducted within the premises of those mills in Germany and the Netherlands. In view of the specificities of the case and of the fact that fines had already been imposed against those mills in the Netherlands, the Competition Council only imposed limited and lump sum fines of €100,000 on three mills and of €70,000 on one of the leniency applicants. The other leniency applicant was granted immunity from fines.4

Until the entry into force of the new legislation, it is not expected that the Competition Council will adopt other decisions in relation to cartels. Decisions in relation to pending cases before the Competition Council will therefore be adopted by the new Competition College, in principle in the course of 2014.

Abuse of dominance

The current article 3 states that ‘without the need for a prior decision to that effect, the abuse by one or more undertakings of a dominant position in the Belgian market concerned or in a substantial part of that market is prohibited’. Article IV.2 of the new legislation reiterates the same prohibition of any abuses of a dominant position.

In 2012, the Belgian Competition Council took three significant decisions in relation to abuses of a dominant position.

On 22 May 2012, Port Real Estate was ordered by the president of the Competition Council to maintain a minimum loading out volume of Liffe-certified Robusta coffee after finding a prima facie abuse of dominance.5 The president indeed found that PRE was abusing its dominant position by deliberately loading out Liffe-certified Robusta coffee (ie, raw coffee beans of the Robusta variety) from its warehouses at an unreasonably low pace.

On 30 July 2012, the Competition Council concluded that Presstalis, active on the world market for the export of French press (magazines and newspapers) sold individually, abused its dominant position through the application of a rebate system awarded to French publishers, and imposed a fine of €245,530.

The case in which the highest fine was imposed concerns an abuse of dominance committed by Bpost (formerly De Post/La Poste) in the Belgian postal sector.6

Indeed, on 10 December 2012, the Competition Council adopted a decision, in which it condemned Bpost for having applied between January 2010 and July 2011 a rebate system called ‘model per sender’. Through that system, Bpost awarded rebates to its largest clients (ie, direct clients and intermediaries) based on the volume of the mail (the commercial rebates) or on the degree to which the mail was prepared for further treatment by Bpost (the operational rebates). However, that system did not apply in the same way to direct clients and intermediaries (ie, companies working between Bpost and the senders, offering a wide variety of services, such as the preparation, collecting, sorting, transporting and distribution of the mail). Indeed, the intermediaries were not allowed to consolidate the mail they treated for their clients, unless they gave Bpost an identification of those clients. If they identified their clients, they received the same rebates as Bpost’s direct clients, but retroactively. Hence the complaints were lodged by several intermediaries with the Competition Council as from 2005.

One of the particularities of that case is that the intermediaries are not only Bpost’s clients, they are also its competitors for access to senders. Another particularity is that on 20 July 2011, the Belgian postal and telecom regulator (IBPT) considered that rebate system incompatible with postal regulations and imposed a fine of €2.3 million on Bpost. One of the arguments invoked by Bpost before the Competition Council was the lack of competence of the Council to apply postal regulations, which fall within the exclusive competence of the IBPT. The Council rejected that claim, considering that competition law fully applies within the postal sector as in any other sector.

As for the analysis of the contested practice, the Competition Council first dealt with the question of the market concerned. According to the Council, this was the market for the postal services related to national industrial mail (direct mail, ie, addressed email with an identical content, such as publicity folders, and admin mail, ie, addressed email with a different content, such as invoices) regardless of whether it fell within the legal monopoly. According to the Council, such a market includes a large variety of activities, such as the preparation, collecting, sorting, transporting and distribution of the mail.

Then, the Council decided to apply both article 3 of APEC and article 102 TFEU, notably in view of the fact that a number of Bpost’s clients are established outside Belgium, which demonstrates that trade between member states was affected by the contested system. As for the dominant position, the Council considered that the very high market share of Bpost (ie, 80 to 100 per cent) was sufficient to establish Bpost’s dominant position on the market concerned.

Concerning the alleged abuse, the Council observed that Bpost’s direct clients and intermediaries are both Bpost’s commercial partners and that the services provided to them by Bpost are mainly identical. Then, the Council indicated that within the framework of the contested system, the conditions awarded to the direct clients were more advantageous than those applicable to the intermediaries. Accordingly, the Council identified the existence of a different treatment between Bpost’s direct clients and the intermediaries. In view of the fact that the intermediaries are also Bpost’s competitors, the Council considered that the different treatment identified was not only discriminatory, but that it had exclusionary effects towards Bpost’s competitors or potential competitors.

Accordingly, the Council considered that the ‘model per sender’ system disadvantaged the intermediaries who were not able to offer the large senders the same conditions as Bpost. It therefore concluded that Bpost abused of its dominant position. In view thereof, the Council imposed a fine of €37.4 million.

Merger control

The current legislation requires that parties to a concentration notify the transaction to the Auditorat when two cumulative turnover thresholds are met.7 This is the case when two of the undertakings8 involved in the transaction each have a turnover in Belgium9 amounting to €40 million. In addition, all undertakings concerned jointly must have €100 million turnover in Belgium. Of course, when a concentration meets the thresholds for a notification at the EU level, no notification at the national level is required.10 Exceptions to this rule are the referral provisions contained in articles 4 and 9 of Regulation 139/2004 on the control of concentrations between undertakings (ECMR). Article 10 of APEC clearly stipulates that in case of a referral of a transaction to the Belgian level, a new notification must be filed with the Auditorat.

Parties are required to suspend completion of the merger until the Competition Council has approved the transaction.11 This obligation is subject to heavy fines, which can be as high as 10 per cent of each of the parties’ turnover in Belgium.12 In exceptional circumstances, the Competition Council can grant a derogation from the suspension obligation.

At the beginning of the merger control procedure, a decision must be taken whether the case will be treated under the simplified merger procedure or under the normal procedure. The simplified procedure can only be used if certain conditions are met,13 for instance if two or more of the parties to the concentration are engaged in business activities in the same product and geographical market (horizontal relationships) provided that their combined market share is less than 25 per cent. The advantage of the simplified procedure is that the Prosecutor will render a decision within 20 working days. The transaction is tacitly approved when the Prosecutor does not send a letter within the 20 working days time limit.

Under the normal procedure, once a concentration has been notified to the Auditorat, the Council has 40 working days to take a decision. This is called the ‘first phase investigation’. The time limit begins to run from the day following the day on which the notification was received and declared to be complete. In order to render its decision, the Council relies on the reasoned report (Report) drafted by the Prosecutor in charge of the case. Such Report must be submitted to the Council within 25 working days following the day on which the transaction was notified or was declared complete. A copy of this Report is sent to the notifying parties.

When the Prosecutor considers that the proposed operation may result in a significant impediment to effective competition, the notifying parties will be informed of this fact at least five working days before the Report is submitted to the Council. The parties then have five working days to offer commitments. If commitments are offered, the time limit of 40 working days will be extended by 15 working days. Also, the 25 working days-delay for submitting the Report is extended by five working days when the parties offer such commitments.

When the Report is submitted, the case is officially pending before a chamber of the Competition Council. The parties can submit comments to the Report in writing until one day before the hearing. A copy must be sent to the Prosecutor.

At the end of the first phase, the Competition Council can decide that the notified transaction does not fall within the scope of the APEC, that the transaction is approved, either with or without conditions or that a second phase of investigation must be opened in view of the serious doubts concerning the admissibility of the proposed concentration. When the Competition Council does not take a decision within the 40 (or 55 in case commitments are offered) working days deadline, the transaction is tacitly approved.

When the Council opens a second phase investigation, the Prosecutor will submit an Additional Report within 30 working days after the Competition Council’s decision opening the second phase investigation. The parties have 20 working days to offer commitments. If commitments are indeed offered, the 30 working day deadline is extended by the time taken by the notifying parties to offer such commitments. The Additional Report is submitted to the Competition Council and a copy is sent to the notifying parties.

Within 10 working days following submission of the Additional Report, the parties concerned can lodge written observations to the Council and the Prosecutor. The latter has five working days to submit a Supplementary Report to the Council. The parties can again respond in writing to this Supplementary Report until the day before the hearing.

At the end of the second phase, the Competition Council can clear (un)conditionally or block the concentration. When the Competition Council does not take a decision within the standard 60 (or 80 at most in case commitments are offered) working days deadline, the transaction is tacitly approved.

The new legislation maintains the above timelines.

In 2012, only 14 concentrations were notified to the Auditorat. This is mainly due to the relatively high merger notification thresholds applicable. Moreover, the majority of the decisions (ie, 10) were taken by the Auditorat on the basis of the simplified procedure. In three decisions, the Competition Council cleared the concentration unconditionally without conducting any in-depth analysis. In the last case, namely the takeover of Flightcare, one of the two suppliers of ‘services on the airside’ (services on tarmac) active at Brussels National Airport under a licence granted by the Belgian government and also performing ‘services on the landside’, by Swissport Handling, the Competition Council cleared the concentration subject to two specific conditions: Swissport Handling is prohibited from making its supplying of services on the airside subject to its supplying of services on the landside to the same airline; and Swissport Handling nor any other undertaking belonging to the same group is allowed to hold more than one of the licences provided by the government for supplying services on the airside.14

Notes

  1. Article IV.46 of the draft legislation.
  2. Decision No. 2012-V/M-19 of 13 July 2012, case MEDE – V/M-12/0002 Diamanthandel A Spira BVBA / De Beers UK Limited and Diamdel NV, available on the Belgian Competition Authority website.
  3. Decision No. 2012-P/K-23 of 27 September 2012, case MEDE-P/K-09/0021 Duma NV and GS International BVBA v Mitsubishi Shoji Kaisha Ltd and Mitsubishi Caterpillar Forklift Europe BV, available on the Belgian Competition Authority website.
  4. Decision No. 2013-I/O-06 of 28 February 2013, case MEDE – I/O – 08/0009, ‘Mededingingsbeperkende praktijken op de markt voor levering en verkoop van meel in België’, available on the Belgian Competition Authority website.
  5. Decision No. 2012-V/M-11 of 22 May 2012, case MEDE – V/M-11/0024 Armajaro Trading Limited / Port Real Estate, available on the Belgian Competition Authority website.
  6. Decision No. 2012-P/K-32 of 10 December 2012, joined cases CONC – P/K-05/0067, CONC – P/K-09/0077, and CONC – P/K-10/0016, Publimail, Link2Biz International and G3 Worldwide Belgium / Bpost, available on the Belgian Competition Authority website.
  7. Article 7, section 1 APEC.
  8. An undertaking encompasses more than a legal entity. Article 1, 1°, APEC defines an undertaking as any natural person or legal entity which pursues on a lasting basis an economic activity.
  9. Belgian turnover is turnover achieved from sales in Belgium and exports from Belgium (Article 86, section 1, APEC).
  10. Article 10 APEC.
  11. Article 9, section 4, APEC.
  12. Article 65 APEC.
  13. Rules adopted by the General Assembly of the Competition Council on 8th June 2007, available on the Belgian Competition Authority website.
  14. Decision No. 2012-C/C-21 of 31 August 2012, case MEDE – C/C-12/0011 Swissport Handling SA / Flightcare SL and Flightcare Belgium NV, available on the Belgian Competition Authority website.

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Hendrik Viaene
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Delphine Gillet
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www.stibbe.be

Stibbe is a leading business law firm with offices in Amsterdam, Brussels, Luxembourg, Dubai, Hong Kong, London and New York. With a history of over 100 years, Stibbe is a full-service firm with over 360 lawyers advising on the laws of Belgium, the Netherlands and Luxembourg, as well as EU law. Clients choose Stibbe as their legal adviser for the most complex transactions, disputes and projects. Our practice areas include: corporate, mergers and acquisitions, banking & finance, dispute resolution, tax, competition law, employment and pension law, energy/industry, real estate, and TMT & IP law.

Our competition & regulation group assists multi-national clients in various sectors of the economy in both litigious and non-litigious matters. Our practice varies from implementing compliance programmes to providing assistance during investigations and proceedings by competition authorities such as the European Commission and the Belgian and Dutch competition authorities.

We ensure the highest level of service and quality by teaming up with specialists from our various other practices to form an inter-disciplinary group specialised in assisting and defending clients in competition and regulatory matters, such as cartel cases and ‘follow-on’ damage claims.

In cartel cases, our group’s work is often of a groundbreaking nature both on the European and national level, as such cases generally involve questions of principle such as the scope of attorney-client privilege, the right to remain silent and the liability of parent companies in case of violations by their subsidiaries.

With regard to ‘follow-on’ damage claims, expert attorneys from our litigation and competition practices have formed an integrated antitrust litigation group. The combined experience of the members of this group is unrivaled by any of our competitors in the Benelux market.

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