Abuse of dominance

Definition of abuse of dominance

How is abuse of dominance defined and identified? What conduct is subject to a per se prohibition?

Article IV.2 of the CEL mirrors article 102 of the TFEU and contains the same non-exhaustive list of the types of conduct that may constitute an abuse. The BCA and Belgian courts will generally rely on precedents of the European Commission and EU courts, and on the Commission’s Guidance Paper on article 82 of the TEC (102 TFEU). The newly introduced article IV.2/1 of the CEL prohibits conduct that rises to the level of an abuse of economic dependency just as it would an abuse of dominance, with the addition of refusals to deal (‘refusing a sale, a purchase or other transaction terms’) to the indicative list of potentially abusive conducts.

As such, the BCA generally follows an effects-based approach to identifying abuse (but certain conduct could be considered as abusive per se, equally in line with EU practice). The BCA and Belgian courts will analyse a dominant player’s conduct based on its actual or likely effect on competition, and will use various tests to assess the conduct’s likely effects. However, courts may occasionally take a more form-based approach (including when applying said tests).

Exploitative and exclusionary practices

Does the concept of abuse cover both exploitative and exclusionary practices?

Yes. Like article 102 of the TFEU, article IV.2 of the CEL covers both exploitative and exclusionary practices.

Link between dominance and abuse

What link must be shown between dominance and abuse? May conduct by a dominant company also be abusive if it occurs on an adjacent market to the dominated market?

While a finding of abuse of dominance requires both dominance and abusive conduct, precedents confirm that the dominance and the abuse need not occur on the same market. In Rendac NV/Incine BVBA (12 November 2002), the Brussels Court of Appeal confirmed the BCA’s decision and held that an undertaking dominant on one market may infringe article IV.2 of the CEL based on an abuse on a neighbouring market where it is not dominant. More recently, in the National Lottery case (22 September 2015), the BCA fined the National Lottery for abusing its dominant position in the market for public lotteries (a legal monopoly) when launching a new product on the neighbouring market for sports betting. The National Lottery had used customer details obtained through its activities on the former market when launching its product on the latter market. It had also obtained commercially sensitive information about competitors, before and after the launch, from retailers (whose turnover largely stems from the sale of lottery products).

Defences

What defences may be raised to allegations of abuse of dominance? When exclusionary intent is shown, are defences an option?

A dominant undertaking’s conduct will not constitute an abuse if it is ‘objectively justified’. The BCA has also recognised the ‘state action defence’ (ie, where the undertaking is engaged in anticompetitive conduct as a result of binding state measures (in Way Up/Belgacom, 22 April 1999, and in Executive Limousine Organisation/BIAC, 28 May 2001)).

Specific forms of abuse

Types of conduct

Rebate schemes

Rebate schemes may constitute an abuse under Belgian competition law. Belgian precedents have concerned the exclusivity, loyalty (or fidelity) or discriminatory aspect of rebates more than the difference between retroactive versus incremental rebates. As under EU law, (genuine) quantity-based rebates typically do not raise concerns in Belgium.

One of the most well-known cases involving rebates is the Presstalis case (decision of 30 July 2012), confirmed by the Brussels Court of Appeal. French media distributor Presstalis granted French publishers an extra rebate for the exclusive right to distribute their publications in Belgium, Canada and Switzerland for a period of one year. The BCA found this rebate to be abusive because of its ‘strong fidelity effect’, which enabled Presstalis to foreclose competitors in the market for the export of French publications and in the market for the distribution of these publications in Belgium (through a privileged relationship with Belgian distributor AMP).

In Algist Bruggeman (22 March 2017), the BCA found that a yeast supplier’s retroactive rebates, based on a full year’s orders, were abusive. Rebates were granted to certain distributors if they sourced (quasi) 100 per cent of their needs of fresh yeast from Algist Bruggeman, and had no objective justification. Algist Bruggeman was also found to have implemented abusive individualised exclusivity and loyalty rebates.

Tying and bundling

Tying and bundling may amount to an abuse of dominance in Belgium, as under EU competition principles.

In a recent precedent, the BCA considered that Algist Bruggeman abused its dominance by tying the supply of liquid yeast to the acquisition of a dosing machine, for which Algist Bruggeman unilaterally set the price and a depreciation period linked to non-compete clauses (22 March 2017).

In an earlier precedent, the Brussels Court of Appeal held that UPC had abused its dominance because of its bundling practices in the distribution of television programmes. UPC offered certain television programmes and benefited from a de facto monopoly in cable television distribution in part of the Brussels Region, and tied its distribution of Canal+’s competing programmes to the use of its decoder and to its management of Canal+ subscriptions (Canal+ Belgique/Wolu TV and UPC Belgium, 18 June 2004).

Exclusive dealing

Exclusive dealing may constitute an abuse under Belgian competition law. The issue of exclusivity and loyalty rebates was illustrated in Presstalis.

In recent years, the BCA’s experience with exclusive practices has occurred through interim measures requests, in the context of which the BCA limits itself to a review of the prima facie (in)validity of the practices (not an in-depth review). In a decision upheld by the Brussels Court of Appeal (7 September 2016), the BCA considered Telenet’s five-year contract for the exclusive broadcasting rights of the Superprestige Cyclo-cross competition constituted an abuse of dominance (5 November 2015). By acquiring these rights, Telenet had acquired a dominant position in the market for the licensing of broadcasting rights for cyclocross races in Flanders after having already acquired similar rights for the UCI World Cup cyclo-cross races for seasons 2016 to 2020. The BCA found that, due to the popularity of such races in Belgium, this could strengthen Telenet’s dominance on the retail market for the provision of television services in Flanders, and constitute a breach of Telenet’s special responsibility by virtue of its strong position in the market.

In another interim measure decision, also upheld by the Brussels Court of Appeal (28 April 2016), the BCA examined an exclusivity clause in the General Regulations of the Fédération Equestre Internationale (FEI), the federation that governs equestrian sports. The clause prohibited athletes and horses from participating in non-FEI accredited events in the six months preceding any FEI accredited event. Because only the latter type of events counted for ranking purpose and because of the timing of FEI competitions, athletes were effectively barred from participating in non-FEI competitions. The BCA found that the conditions of the exclusivity clause and the lack of transparency of the accreditation procedure were aimed to abusively reinforce the FEI’s dominant position and amounted to an abuse.

In 2017, the BCA imposed other interim measures on the FEI and the organisers of one of its accredited competitions, the Global Champions Tour (GCT) (20 December 2017). A Belgian horse rider and her equestrian team complained about a memorandum of understanding (MoU) concluded by the defendants that significantly reduced the share of participants selected based on rankings relative to the share selected based on non-sport related criteria (such as membership of a paying team) in recognised competitions. The Competition College considered that the FEI was dominant in the EU market for the organisation and promotion of show jumping competitions, as only FEI-accredited events are taken into account for ranking purposes. The Competition College found that the reduction of the proportion of invitations for GCT events based on riders’ official rankings from 70 to 30 per cent created a barrier to entry to horse riders who are not members of fee-paying teams and who could have aspired to participate based on their sporting merits, as well as a difference in treatment between GCT events and other FEI-accredited competitions that was not justified by the specificities of the sector. Therefore, the Competition College concluded that the defendants’ practices might constitute an abuse of dominance. The BCA suspended the MoU insofar as it reduced the share of invitations based on the official ranking below 60 per cent. The BCA also imposed penalty payments on the FEI and the GCT organisers for non-compliance (13 April 2018). Later in the same year, the Brussels Court of Appeal, however, annulled the BCA decision to suspend the MoU on grounds of inappropriate reasoning (27 June 2018). The Court ordered three members of the Competition College involved in adopting the annulled decision (including the president of the BCA) to recuse themselves from the Competition College that would be responsible for reviewing the case (7 August 2018).

Predatory pricing

Predatory pricing may amount to an abuse in Belgium, but while there have been complaints alleging predatory pricing, the BCA has not found a company guilty of this practice.

The case most often referred to is the Electrabel case (3 July 2008). The BCA dismissed allegations of Electrabel’s (the incumbent gas operator) predatory pricing between January and October 2007 because a sixth-month period was found too short to constitute a predatory strategy and no competitor had left the market during that period. Because it dismissed the allegations on that basis, the BCA did not carry out a cost-price analysis in this case. As a general matter under Belgian law, temporary below-cost prices when launching a product or liquidating stocks are not considered as abusive.

Price or margin squeezes

Price and margin squeezes can amount to an abuse in Belgium. The BCA practice is generally in line with EU case law.

In the Lampiris/Electrabel case (26 March 2015), Lampiris complained to the BCA that Electrabel, the former incumbent electricity provider, abused its dominant position by engaging in margin squeeze and excessive and discriminatory pricing by incorporating the value of gas emission allowance certificates (which it had received for free from Belgian authorities) into its prices on the wholesale electricity market. Along with the other allegations, the BCA dismissed the margin squeeze claims. Based on the ‘as efficient competitor test’ using Electrabel’s long-run average incremental costs, the BCA found that Electrabel’s margins would have remained positive on the retail market if it paid the prices charged on the wholesale market. Further, Lampiris’ prices had been equal or lower to Electrabel’s prices and covered positive margins, and Lampiris had increased its market share.

One of the main precedents is the Base/Belgacom Mobile case (26 May 2009). For the first time, the BCA found an abusive margin squeeze involving Belgacom, the incumbent telecoms operator in the sale of mobile services for business customers (in particular large private and public entities). After reviewing Belgacom’s strategy in 2004 and 2005, the BCA found a negative margin between Belgacom’s on-net prices for business customers (between two customers on its own network) and the mobile termination rates (MTR) charged by Belgacom to competitors (for terminating a call from their network to its network). The BCA found that these MTR charges were an essential input for competitors and that Belgacom could not have made a normal profit on its on-net communications if it had to pay the MTR rates charged to competitors, before concluding that a margin squeeze may, by its very nature, restrict competition.

Refusals to deal and denied access to essential facilities

In Belgium, a refusal to deal may amount to an abuse of dominant position. Both the BCA and the courts have addressed refusal to deal claims.

The Spira/De Beers saga offers an interesting precedent on refusals to deal. Belgian diamonds dealer Spira had been a ‘sightholder’ (distributor) of rough diamonds from producer De Beers until 2003. When De Beers implemented a ‘supplier of choice’ system in 2003, Spira no longer qualified as ‘sightholder‘. Spira first raised the matter before the European Commission, which rejected its complaint for lack of community dimension and prima facie evidence of an abuse. The General Court dismissed Spira’s appeal in 2013. Spira also complained to the BCA and requested interim measures, obliging De Beers to supply it with rough diamonds. In 2012, the President of the BCA found that there was prima facie evidence that De Beers (with its 40 per cent market share in rough diamonds supply) had abused its dominant position and ordered De Beers to continue supplying rough diamonds to Spira, subject to certain conditions. This temporary obligation was renewed several times. In 2014, the interim measure came to an end, when the BCA’s prosecutors dropped the investigation on the merits, considering the General Court’s 2013 dismissal of Spira’s appeal against the European Commission’s decisions, and the BCA’s other enforcement priorities and limited resources - a decision that was confirmed by the BCA’s College in 2015. This case shows that the BCA is more inclined to adopt interim measures in dominance cases than the European Commission, despite the similarity of the substantive tests at the EU and Belgian levels (see also question 27).

In Mobistar SA/Belgacom SA (22 July 2010, see also question 4), Mobistar sought to offer DSL services without the requirement of fixed-line telephony service. To provide these ‘naked’ DSL services, Mobistar requested access to Belgacom’s DSL wire network. Mobistar complained that Belgacom was charging excessive prices, and that the tariff should be non-discriminatory and sufficiently unbundled to ensure a reasonable profit margin. But the BCA dismissed Mobistar’s request for access. It found that Mobistar’s existing wholesale access was sufficient and that Belgacom’s tariff was sufficiently unbundled, respected the principle of ‘cost orientation’, and had been approved by the BIPT (the Belgian telecoms regulator).

In VRT/Norkring Belgium (23 January 2019), the BCA imposed interim measures on broadcaster NV Norkring Belgium to ensure continuity of the Flemish Radio and Television Broadcasting organisation’s (VRT) public mission of FM broadcasting. The VRT enters into Service Level Agreements (SLAs) with broadcasters, which then submit FM broadcasts through masts. In Belgium, some of these masts belong to broadcaster NV Norkring Belgium, which had an SLA for FM broadcasting services in place until March 2019. After that SLA expired and following a public tender, VRT awarded a new SLA to BV Broadcast Technology & Development (Broadcast Partners). However, Broadcast Partners was unable to enter into an agreement on reasonable terms with Norkring for the use of its masts. The BCA held that the general economic interest of continuing the VRT’s public service mission to provide FM broadcasts was sufficiently important that an abuse was prima facie likely if such continuity was not guaranteed. The BCA required Norkring to provide the transmission masts for FM transmissions under the same conditions that it offered in its tendering bid, until an agreement had been reached, or until the court ruled on the matter, and in any case, not after the decision on the merits of the case had been taken by the BCA. The case on the merits is still ongoing.

The BCA recently dismissed a request for interim measures in a case involving the supply of raw meteorological data. The Great Circle, a software company, had alleged that the Royal Meteorological Institute of Belgium (RMI) abused its dominance by refusing to provide it with the data needed to operate its marine weather software. The BCA considered that there was no prima facie evidence that RMI was dominant in the relevant market or committed an abuse and therefore rejected The Great Circle’s request (15 February 2019).

Belgian courts have also turned to somewhat more flexible or unorthodox tests to find refusals to deal. In Ducati/DD Bikes, Ducati (lawfully) terminated its dealership agreement with dealer-repairer DD Bikes, and refused to further supply spare parts and equipment. On appeal, the Ghent Court of Appeal (1 October 2014) established that Ducati, through its official dealers, was dominant in the market for maintenance and repair of Ducati motorbikes. Without any reference to EU or other precedents, the Court applied its own test to determine whether an abuse existed. The Court concluded that Ducati’s refusal to supply was abusive, subjecting Ducati to supply obligations to ensure that DD Bikes could continue to offer aftersales services for Ducati motorbikes.

Predatory product design or a failure to disclose new technology

In theory, Belgian law does not exclude a predatory product design or a failure to disclose new technology from constituting an abuse of dominance. To date, however, there have been no precedents.

Price discrimination

Price discrimination may amount to an abuse under Belgian law. It generally concerns equivalent transactions being treated differently, resulting in a material competitive disadvantage (article IV.2(2)(3) CEL).

In Lampiris/Electrabel, Lampiris had raised a price discrimination and other price-related claims against Electrabel, the incumbent electricity producer and provider. The BCA held that services offered by Electrabel on the electricity wholesale market were different from those offered on the retail market, making the price differences non-discriminatory (26 March 2015).

In the bpost case, the BCA reviewed the ‘per sender’ rebate scheme set up by bpost, the incumbent postal operator. Under the scheme, direct senders could qualify for significant volume rebates, unlike intermediaries whose significant volumes were consolidated from mail processed for different senders. While not formally reaching a finding of discrimination, the BCA imposed a fine of €37 million on bpost (10 December 2012) for a breach of equal treatment. According to the BCA, the grant of rebates prevented the development of intermediaries. Bpost’s tariff model had previously been subject to an investigation by the BIPT (the Belgian telecoms regulator), resulting in a €2.3 million fine for bpost (20 July 2011). In March 2016, the Brussels Court of Appeal annulled BIPT’s fine. Interestingly, in November 2016, the Brussels Court of Appeal annulled the BCA’s fine as well. According to the Court, the BCA had breached the ne bis in idem principle by fining bpost, given that the BIPT had already sanctioned bpost’s conduct. But this ruling was overturned by the Supreme Court in 2018, which held that the Brussels Court of Appeal improperly applied the ne bis in idem principle by disregarding whether the proceedings before these two distinct authorities could have complementary objectives (22 November 2018).

In TECO/ABB, the BCA imposed interim measures on ABB Industrial Solutions BVBA (ABB), a producer of ‘smart’ electricity meter boxes (3 September 2018). Interestingly, ABB obtained the exclusive right to produce the lids for these boxes by acquiring GE Industrial Solutions (GE), which had obtained this monopoly in a public tender from the Flemish energy grid net operator Eandis (now Fluvius). The College found it not manifestly unreasonable to assume prima facie that ABB abused its dominant position by charging other companies in the market, dependent on it for such lids, a substantially higher price than the price charged to Eandis as offered in the tender bid by GE. ABB did this in combination with the subsequent lowering of its prices for electricity meter boxes, allowing it to squeeze the margin, and creating uncertainties in supplies to other companies by failing to apply a strict supply policy. Therefore, the BCA required ABB to maintain a non-discriminatory pricing policy and processing of orders, by applying price reductions for products it sells in competition with the lids, and for electricity boxes or their components (regardless of the configuration of orders), as well as refraining from price increases that were not objectively justifiable.

Belgian courts have also dealt with discrimination cases, however, without always establishing an actual competitive disadvantage from the discriminatory conduct.

In SABAM, the Brussels Court of Appeal found that, while the prices differed, the services provided by SABAM, the Belgian collecting society, to major customers were equivalent to those provided to the other customers (SABAM is the Belgian authors’ rights collecting society) (3 November 2005). It concluded that the different prices were discriminatory, without investigating the existence of an actual competitive disadvantage on the downstream market. In AMP, the Brussels Court of Appeal again had to examine the pricing regime applied to large versus smaller retailers by a supplier (AMP, the exclusive distributor of the main newspapers in Belgium). Relying on an expert economic report to find the price discrimination, the court considered that AMP’s increase in the fixed minimum monthly distribution fees was discriminatory because only smaller retailers paid the fixed fee, whereas large retailers paid a variable percentage, so that smaller retailers paid a higher relative price.

Exploitative prices or terms of supply

Exploitative prices or terms of supply may amount to an abuse of dominance in Belgium. Excessive pricing cases are not uncommon before the BCA or the courts. Actual findings, however, are much less frequent.

An interesting case involving Electrabel, the incumbent electricity provider, was decided by the BCA in 2014 (this case is distinct from the Lampiris/Electrabel and NMBS/Electrabel, mentioned in other questions, and in which the excessive pricing claims were dismissed by the BCA and the Brussels Court of Appeal, respectively). Electrabel faced abuse of dominance allegations in relation to its tertiary production reserve policy (ie, the management of reserve capacities on the Belpex electricity exchange, for the electricity wholesale market). After finding that Electrabel was dominant both in the market for the production and wholesale trade of electricity and in the market for the supply of the tertiary reserve in Belgium, the BCA found the margin scale for the sale of reserve capacity to be excessive. Electrabel’s ‘pricing scale’ governing the release of reserve capacity involved margins of 50 to 200 per cent above the average wholesale price per MWh achieved on the Belpex trading platform in 2008, which was seen as ‘excessively disproportionate’ when considering the marginal cost of production (18 July 2014).

A few years earlier, the BCA had investigated another excessive pricing case against Electrabel, regarding an increase of its natural gas prices (Electrabel NV, 3 July 2008). In that case, the BCA had conditioned carrying out a full cost-price analysis on a comparison of Electrabel’s prices with certain benchmarks. After comparing the prices with other providers’ prices, pre-liberalisation regulated prices, and average prices in neighbouring EU member states, the BCA concluded that there were insufficient indications of excessive prices to warrant a cost-price analysis.

In Proximus/Alpha 11, the BCA investigated ex officio whether Proximus had abused its dominant position on the wholesale market in its interactions with Alpha 11, a group of telecommunication services providers. Alpha had provided the BCA with information that Proximus kept its prices, and hence Alpha 11’s costs, artificially high, thereby foreclosing Alpha 11 from the market and preventing it from launching a television platform ‘Choice’. The BCA, however, closed the investigation due to insufficient evidence found to indicate such conduct or strategy by Proximus (10 July 2019).

In the AMP case (see question 21), the Brussels Court of Appeal found that the increase in the fixed minimum monthly fees was excessive, having already found that it was discriminatory. Relying on the expert economic report used for the assessment of discrimination, the court found that a lower fee increase would have sufficed because the increase lacked a costs-based justification (29 May 2012).

In Festival organizers/SABAM, the Brussels Commercial Court ordered SABAM, the Belgian collecting society, to cease and desist its pricing practices (12 April 2018). The Court concluded that SABAM had a de facto monopoly in the collection and distribution of authors’ musical copyrights. Relying on European Courts precedent on excessive pricing (C-402/85 Basset, 1987; STIM C-52/07 11, 2008), the court held that SABAM failed to justify its pricing practices as having a reasonable relation to the economic value of the product supplied. SABAM significantly increased tariffs for concerts and music festivals without objective economic justifications (ie, since 2017, it raised tariffs to 17 per cent and 37 per cent respectively, depending on the size of festivals for services that remained the same in terms of nature and cost), determined prices on the basis of a festival’s total turnover (including turnover unrelated to music and thus for services not provided), and used pricing methods unrelated to actual use of music (while alternative methods of calculation that quantify use do not require additional costs). On appeal, the Brussels Court of Appeal (10 April 2019) stayed the proceedings to request a non-binding opinion (amicus curiae) from the European Commission on whether SABAM’s tariffs are an infringement of article 102 of the TFEU.

In another case between SABAM and two other festivals, the Antwerp Commercial Court stayed the proceedings to refer the case to the Court of Justice for a preliminary ruling about whether an abuse exists under article 102 of the TFEU, whether or not read in conjunction with article 16 of Directive 2014/26/EU on collective rights management, when a collecting society (with a factual monopoly in a member state) applies a remuneration model with a fixed rate, instead of a rate that takes account of the precise share of the protected music repertoire played during the event, and whether the licence fees depend on external elements (28 February 2019).

Abuse of administrative or government process

In principle, Belgian law does not exclude an abuse of administrative or government process from constituting an abuse of dominance. To date, however, there are no precedents.

Mergers and acquisitions as exclusionary practices

The question of whether mergers and acquisitions that do not meet notification thresholds can be subject to review under article IV.2 of the CEL (and, in fact, article IV.1 of the CEL) is a longstanding one, which seems to receive a positive, if qualified, response.

In 2006, the Brussels Court of Appeal held that a transaction that does not meet the Belgian notification thresholds may be reviewed under articles 101 and 102 of the TFEU or articles IV.1 and IV.2 of the CEL (Gabriella Rocco & Centro di Medicina Omeopatica Napoletano v Dano-Invest and others, 15 December 2006).

In 2016, the BCA had the opportunity to address the question, after receiving a request for interim measures to suspend the non-notifiable acquisition of Brouwerij Besteels by AB InBev (Alken-Maes/AB InBev, 21 November 2016). Alken-Maes contended that the acquisition constituted an abuse of AB InBev’s dominance. The BCA referred to the ECJ’s Continental Can judgment and acknowledged that concentrations can lead to an abuse of dominance, but also noted the potential harm of interim measures against transactions. In a decision upheld by the Brussels Court of Appeal (28 June 2017), the BCA then held that an acquisition escaping merger control can be assessed from an abuse of dominance perspective if there are prima facie restrictions on competition, distinct from the effect of the concentration itself, which can be qualified prima facie as an abuse of dominance. This was not the case in the transaction at hand.

Other abuses

As with article 102 of the TFEU, the list of abuses in article IV.2 of the CEL is not exhaustive. While generally relying on EU precedents and guidance, the BCA and the Belgian courts assess conduct on a case-by-case basis so that they may find other types of abuses.

In the 2017 Algist Bruggeman case (see question 14), the circulation of a biased internal report on a competitor was found to constitute abusive denigrating practices. The BCA considered that the objective of the report was to create uncertainty about the microbiological aspects and quality of the competing yeast, and to discourage distributors or bakeries from suppling or using the product.

In the National Lottery case (see question 12), the BCA found that the National Lottery had abused its dominant position by leveraging customers’ contact details obtained through its legal monopoly in the market for public lotteries. The National Lottery used these contact details when launching a new product on the neighbouring market for sports betting (by sending a one-off email to the customers).

In the 2014 Electrabel excessive pricing case, the claims included an abuse resulting from Electrabel’s excessive electricity reserves, ie, from withholding electricity. The BCA dismissed this claim and found that the additional reserve capacity maintained was explained by the risk that Electrabel be required to pay penalties in the event of negative imbalance positions in the market (18 July 2014).

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