In a November 21 2016 decision, the Competition Authority established the circumstances in which it will review concentrations that remain below the EU and Belgian notification thresholds.
On September 8 2016 AB InBev announced its acquisition of Bosteels, a brewer of specialty beers. Bosteels' total turnover amounted to approximately €32 million, which was below the EU and Belgian turnover thresholds. As a result, the acquisition fell outside the scope of the EU and Belgian merger control regimes.
Alken-Maes, which is the second largest Belgian brewer and part of the Heineken group, filed a complaint with the Competition Authority regarding the planned acquisition. As an interim measure, Alken-Maes requested that the acquisition be suspended pending review of the complaint.
Under the Competition Act, parties can request interim measures where there is a prima facie violation of the act in regard to restrictive practices. Alken-Maes claimed that, on the basis of Continental Can, the acquisition of Bosteels amounted to an abuse of dominance which violated Belgian and EU competition law.
The Competition Authority did not rule out its ability to intervene against non-reportable concentrations on the basis of the Competition Act's abuse of dominance prohibition. However, it did rule out the possible application of Article 102 of the Treaty on the Functioning of the European Union in such a scenario.
The authority strictly defined its jurisdiction and stated that it will intervene on an interim basis only if there are strong indications that a concentration constitutes an abuse of dominance. In that context, the authority established a two-step test:
- First, there must be prima facie evidence of specific negative consequences for competition other than those that would result from the concentration.
- Second, if such negative consequences are present, they must constitute, prima facie, an abuse which is distinct from the concentration's effects. Should these negative consequences be too closely related to the concentration, the authority will not intervene.
In the present case, the authority held that the above thresholds were not met. It noted that AB InBev had a pre-existing dominant position in the Belgian market, but added that, on the basis of the usual market definitions, its market share would increase only marginally. As a result, the authority could not establish, prima facie, an abuse which was distinct from the concentration's effects. The authority applied the same reasoning on the basis of narrower market definitions. Further, it held that the other negative consequences alleged by Alken-Maes, such as the establishment of barriers for entry for other competitors and increased buying power, were not demonstrated.
On this basis, the authority rejected the request for interim measures.
The most noteworthy part of this decision is the Competition Authority's recognition that, in certain well-defined circumstances, concentrations that fall outside the scope of the Belgian merger control regime may still be subject to review. This is in line with the Brussels Court of Appeal's 2006 judgment in Rocco. However, the circumstances in which this scenario can occur are strictly defined, and the authority emphasised in its decision that concentrations that do not meet the notification thresholds will be subject to authority intervention only in exceptional circumstances.
The standard set by the authority relates to interim relief, which is a powerful instrument in the context of merger control, as it may halt – at least for an interim period – a planned concentration. The parties now await the authority's final decision, in which it is expected to apply the same test.
For further information on this topic please contact Koen Platteau at Simmons & Simmons LLP by telephone (+32 2 542 0960) or email ([email protected]). The Simmons & Simmons LLP website can be accessed at www.simmons-simmons.com.