The European Antitrust Review 2015 Section 4: Country chapters

Belgium: Overview

This contribution provides an overview of the most important and relevant developments that occurred in Belgium in 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 (the BCE) and abrogating most of the provisions of the current Belgian Act on the Protection of Economic Competition (the APEC). The new act entered into force on 6 September 2013.

Regulatory framework

On 27 December 2012, draft legislation substantially modifying the current competition law was tabled in parliament. After months of discussions, the 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 BCE, which entered into force on 6 September 2013. The most important changes introduced by the BCE occur in the following areas.

New composition of the Belgian Competition Authority

Under the former legislation, the Belgian Competition Authority (BCA) consisted of two distinct components: the Directorate-General for Competition (Competition Service) and the Competition Council, which in turn consisted of the Competition Council stricto sensu (ie, an administrative tribunal), the College of Competition Prosecutors and the registry. Since the entry into force of the BCE, the BCA consists of four distinct components:

  • the president of the BCA;
  • the Competition College, entrusted with decision-making powers;
  • the Competition Board; and
  • the Auditorat, tasked with investigative powers under the direction of the general prosecutor.

New settlement procedure

Article IV.51 BCE establishes a new settlement procedure which allows for the early settlement of investigations in order to save time and money. A 10 per cent reduction in the antitrust fine is offered to undertakings concluding such a settlement with the Auditorat. In such cases, the Auditorat is competent to adopt a final decision, which is deemed equivalent to a decision of the Competition College. The BCE, however, stipulates that no appeal can be lodged against a settlement decision adopted by the Auditorat. At the time of writing, no competition case has yet been settled by the BCA using the procedure introduced by article IV.51 BCE.

Broadening of the personal scope of competition law

In 2009, the minister for economic affairs requested that the Directorate-General for Competition investigates 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 BCE does not follow the director-general’s proposal as it does not establish criminal sanctions. However, one of the major changes under the BCE is the introduction of the possibility of imposing administrative penalties on individuals for direct involvement in hard-core antitrust infringements (with the exception of abuses of a dominant position). The BCE also introduces the possibility for individuals to lodge a personal leniency application.1 At the time of writing, no individual has been condemned for direct involvement in hard-core antitrust infringements.

Cartels

Under the former legislation, article 2 APEC prohibited:

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 BCE 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, or to share markets on behalf of an undertaking or an association of undertakings.

In 2013, the (former) Competition Council mainly took two decisions in relation to cartels, on the basis of former article 2 APEC. At the time of writing, no decision of the Competition College based on the new article IV.1 BCE has been adopted.

Fines imposed on four major flour mills

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 in the coordination of price increases and the 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 in the Netherlands. In view of the specificities of the case and of the fact that fines were already imposed against those mills in the Netherlands, the Competition Council only imposed limited and lump sum fines of €100,000 to three mills and of €70,000 to one of the leniency applicants. The other leniency applicant was granted immunity from fines.2

On 12 March 2014, the Brussels Court of Appeal annulled the fine (of €100,000) imposed on one of the flour mills (Brabomills). The Court considered that in view of the fact that the Council did not impose on Brabomills a fine calculated on the basis of its turnover achieved in Belgium (but rather imposed a lump sum fine), the Court could not assess whether such a fine only punished Brabomills for the infringement it committed in Belgium, or if that fine also covered the infringement committed in the Netherlands, for which Brabomills was already sanctioned in that country. In order to avoid a violation of the non bis in idem principle, the Court annulled the decision of the Competition Council in so far as it imposes a fine on Brabomill.3

Fines imposed in the cement sector

On 30 August 2013, the Competition Council imposed fines for a total amount of approximately €14.7 million on Holcim Belgium, Cimenteries CBR, Compagnie des ciments belges, the sector association Febelcem and the research center CRIC for concerted practices between May 2000 and October 2003 in the cement sector.4 According to the Council, the aim pursued by these undertakings was to protect their commercial interest by delaying the adoption of a licence and of standards rendering possible the use of ground granulated blast furnace slag – commercialised by, among others,  their competitor Orcem – as a component of ready-mix concrete. The case was opened ex officio in 2005 by the College of Competition Prosecutors, following the transmission of information in that regard by the European Commission and by Orcem.

An appeal against the decision of the Competition Council has been lodged before the Brussels Court of Appeal by several of the undertakings involved. On 9 May 2014, the Court of Appeal decided to refer three questions on the interpretation of new provisions of the BCE to the Belgian Supreme Court for a preliminary ruling.5

Abuse of dominance

Article IV.2 BCE 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’.

In 2013, the Competition Council/College did not take any new decisions in relation to restrictive agreements other than cartels (which we have covered above).

The College of Competition Prosecutors nevertheless submitted, on 7 February 2013, a reasoned report to the Competition Council, in a case involving Electrabel (GDF Suez) for an alleged abuse of its dominant position on the Belgian market for generation, wholesale and trading of electricity and on the Belgian market for supply of tertiary reserve services. The Prosecutor in charge indeed concluded that Electrabel engaged in abusive practices concerning, on the one hand, capacity withholding (from 2007 to 2010) and, on the other hand, fictional sale of tertiary reserve (in the years 2006 to 2007). After Electrabel submitted its observations on that reasoned report (regarded as a ‘statement of objections’ since the entry into force of the BCE), the case gave rise to the first Prosecution body’s ‘draft decision’ within the meaning of the BCE, filed on 29 November 2013 to the president of the new Belgian Competition Authority. Electrabel then submitted a written reply to the Competition College, which had at least one month and at most two months from that moment to organise an oral hearing. At the time of writing, no decision has yet been adopted in that case. In all likelihood, it is in that case that the new Competition College will render its first decision in relation to an abuse of dominance.

It is also worth noting that in July 2013, the College of Competition Prosecutors conducted inspections at the premises of the Loterie Nationale/Nationale Loterij in Belgium. The prosecutors were looking for evidence of concerted practices or abuse of dominant position in the gambling sector in Belgium.

Merger control

The BCE requires that parties to a concentration notify the transaction to the Auditorat when two cumulative turnover thresholds are met.6 This is the case when two of the undertakings7 involved in the transaction each have a turnover in Belgium8 amounting to €40 million. In addition, all undertakings concerned must jointly 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.9 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 IV.11 BCE 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.10 This obligation is subject to heavy fines, which can be as high as 10 per cent of each of the parties’ turnover in Belgium.11 In exceptional circumstances, the Competition Council can grant a derogation from the suspension obligation.12

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 such as 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 simplified procedure has as its advantage that the competition prosecutor will render a decision within 15 working days.14 The transaction is tacitly approved when the prosecutor does not send a letter within the 15 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 from the day following the day on which the notification was received and declared to be complete. In order to render its decision, the Competition College relies on the draft decision submitted by the prosecutor in charge of the case. Such draft decision must be submitted to the College within 25 working days following the day on which the transaction was notified or was declared complete. A copy of this draft decision 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 draft decision is submitted to the College. 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 day-delay for submitting the draft decision is extended by five working days when the parties offer such commitments.

When the draft decision is submitted, the case is officially pending before a chamber of the Competition College. The parties can submit comments to the draft decision 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 BCE;
  • that the transaction is approved, either with or without conditions; or
  • that a supplementary investigation must be initiated in view of the serious doubts concerning the admissibility of the proposed concentration.

In any event, the College’s chamber hearing the case may authorise an extension of 15 working days if so requested by the notifying parties. When the Competition College does not take a decision within the deadline of 40 working days (which may be extended if commitments are offered or if requested by the notifying parties), the transaction is tacitly approved.

When the College initiates a supplementary investigation, the prosecutor will submit a supplementary draft decision within 30 working days after the Competition College’s decision to initiate the supplementary investigation. The parties have 20 working days to offer commitments. If commitments are indeed offered, the deadline of 30 working days is extended by the time taken by the notifying parties to offer such commitments. The supplementary draft decision is submitted to the Competition College and a copy is sent to the notifying parties.

Within 10 working days following the submission of the supplementary draft decision, the parties concerned can lodge written observations to the College and the prosecutor. The latter has five working days to submit a supplementary report to the College. The parties can again respond in writing to this supplementary report until the day before the hearing.

At the end of the supplementary investigation, the Competition College can clear conditionally or unconditionally, or block the concentration. When the Competition College does not take a decision within the standard deadline of 60 working days (which may be extended in case of commitments or at the express request of the parties), the transaction is tacitly approved.

In 2013, 24 concentrations were notified to the College of Competition Prosecutors/Prosecution Body, which is much higher than the years before.15 However, the great majority of the decisions (21) were taken by the Prosecution Body on the basis of the simplified procedure, and therefore only consist of one or two pages.16

Two decisions adopted in 2013 nevertheless draw our attention.

In the first case, Koninklijke Belgische Touring Club/Touring Club Royal de Belgique (Touring) notified on 30 August 2013 to the College of Competition Prosecutors its intention to acquire sole control over Autoveiligheid NV and its subsidiary Bureau voor Technishe Controle NV, both active in the legally required periodical inspection of vehicles and in the organisation of the legal driving test (ie, a market totally regulated by the authorities).

In view of Touring’s commercial activities on other markets and therefore of the risk that Touring could make use of certain information available in the driving test centres in order to develop its commercial activities, the Competition College finally decided to subject the clearance of that operation to conditions: Touring should indeed take actions to ensure an operational and structural separation between testing and exam activities of the target undertakings on the one hand, and the commercial activities of the Touring Group on the other hand.17

The second case concerns the clearance by the Competition College of the creation of the joint venture Mediahuis by the media groups Corelio and Concentra, notified on 31 July 2013 to the College of Competition Prosecutors. Both parties planned to entrust Mediahuis with the printing and editing activities of their own newspapers – including, among others, Corelio’s De Standaard and Het Nieuwsblad, and Concentra’s Gazet van Antwerpen and Het Belang van Limburg – which all have a large readership in Flanders.

In view of the importance of the combined market shares (ie, more than 60 per cent) of the parties on the markets concerned18 and of several identified risks linked to the operation (such as a potential risk of deterioration in quality and in the diversity of the newspapers in Flanders, or a potential risk of the creation or strengthening of a dominant position), the prosecution concluded in its reasoned report that the proposed transaction may significantly affect competition on the markets concerned and that a supplementary investigation procedure should be initiated. As a result, the undertakings concerned offered a number of commitments. Despite these commitments, the competition prosecutor maintained that a second phase investigation should be opened.

In its final decision of 24 October 2013,19 the Competition College did not follow the prosecution and decided to clear the operation, subject to the condition that the parties maintain all their newspapers in operation with a sufficient staff of journalists and correspondents, and with their own board of editors, for at least five years.

At the time of writing, the BCA has adopted four decisions on the basis of the simplified procedure and one decision under the normal procedure.

The latter decision relates to the takeover of the press groups Éditions de l’Avenir and L’Avenir Advertising by Tecteo Services Group (Tecteo), active in the energy, telecommunication and audiovisual sectors. The parties notified the contemplated operation to the BCA on 5 November 2013, but the notification was only deemed complete on 10 January 2014. On 7 February 2014, the prosecutor in charge of the case informed Tecteo that the notified concentration raised serious doubts as to its compatibility in view of the fact that following the operation, Tecteo will have access to confidential commercial information of its competitors when they reserve publicity space in the papers of the target groups.

On 14 February 2014, Tecteo offered commitments in order to avoid such a risk, and a few days later the prosecutor proposed supplementary conditions. On 12 March 2014, Tecteo accepted the prosecutor’s conditions and on 26 March 2014, the Competition College cleared the transaction, subject to commitments. These commitments, valid for a period of five years starting from the date of the College’s decision, concern, in essence:

  • the expiry date (date and hour) imposed on the advertisers for the transmission of the commercial data to the distributor;
  • the conditions on which commercial data is treated, complete with the rules of confidentiality; and
  • the annual control of the observance of these commitments.20

Notes

  1. Article IV.46 BCE.
  2. 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.
  3. Decision of the Brussels Court of Appeal of 12 March 2014 in case 2013/MR/6, Brabomills v the BCA, available on the Belgian Competition Authority website.
  4. Decision No. 2013-I/O-34 of 30 August 2013, case CONC-I/O-05/0075 Cimenteries CBR SA, Holcim (Belgium) SA, Compagnie des ciments belges SA, Febelcem ASBL and CRIC, available on the Belgian Competition Authority website.
  5. Decision of the Brussels Court of Appeal of 9 May 2014 in case 2013/MR/11-15, Holcim (Belgium) and others v the BCA, available on the Belgian Competition Authority website.
  6. Article IV.7, §1 BCE.
  7. An undertaking encompasses more than a legal entity. Article I, 1, 1°, BCE defines an undertaking as any natural person or legal entity which pursues on a lasting basis an economic activity.
  8. Belgian turnover is turnover realised during the previous financial year in Belgium (ie, from sales in Belgium and exports from Belgium) (article IV.8, §1, BCE).
  9. Article IV.11 BCE.
  10. Article IV.10, §5, BCE.
  11. Article IV.72 BCE.
  12. Article IV.10, §7, BCE.
  13. Rules adopted by the General Assembly of the Competition Council on 8th June 2007, available on the BCA website.
  14. Article I. 1, 9° BCE defines the concept of ‘working days’ as all calendar days, excluding Sundays and legal holidays. Saturdays are therefore included within the time-limits prescribed by the BCE.
  15. For instance, only 14 concentrations were notified to the Belgian Competition Authority in 2012.
  16. The simplified procedure can only be used if certain conditions are met, 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 simplified procedure has as its advantage that the Prosecutor will render a decision within 20 working days. See the rules adopted by the General Assembly of the Competition Council on 8th June 2007, available on the Belgian Competition Authority website.
  17. Decision No BMA-2013-C/C-02 of 24 October 2013 in case No MEDE-C/C-13/0023, available on the Belgian Competition Authority website.
  18. The markets concerned by the operation are the following: the Belgian market for Dutch (national and regional) newspapers, with the exception of the business papers; the Belgian market for national advertising in Dutch newspapers (business papers and free papers included), and the markets for regional advertising in Dutch (paid-for and free) newspapers, free local papers and thematic papers in the province of Antwerp and of Limburg.
  19. Decision No BMA-2013-C/C-03 of 25 October 2013 in case No MEDE-C/C-13/0020, available on the Belgian Competition Authority website.
  20. Decision No ABC-2014-C/C-03 of 26 March 2014 in case No CONC-C/C-13-0030, TECTEO/EDA-AVENIR ADVERTISING, 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 advisor for the most complex transactions, disputes, and projects. Our practice areas include: corporate, mergers and acquisitions, bankingand finance, dispute resolution, tax, competition law, employment and pension law, energy/industry, real estate, and TMT and IP law.

Our competition and regulation group assists multi-national clients in various sectors of the economy in 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 groundbreaking on a 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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