On 11 March 2010, the Brussels Court of Appeal ruled on the appeal brought by UGC, FCB and Multiscope against the Competition Council’s decision of 1 October 2008. In its 2008 decision the Council held that the conditions imposed in 1997 on the Kinepolis Group, when it granted approval for the merger of Group Bert and Group Claeys, should be partially maintained for an additional period of three years and would be automatically lifted at the expiration of this three-year period. (Belgian Competition Report 2008/Q4).
The Council’s decision of 1 October 2008 was adopted following a judgment of the Court of Appeal on 18 March 2008 annulling the Council’s earlier decision of 16 April 2007, which lifted the conditions that had originally been imposed on Kinepolis (Belgian Competition Report 2008/Q 2).
In its judgment of March 2010, the Court of Appeal took the opportunity to clarify the extent of its powers to review merger control cases. The Court stated that its decision of 18 March 2008 constituted the final decision on the objections submitted to it with respect to all aspects falling under its full jurisdiction. It also clarified that the Council’s competence following this judgment was limited to aspects which the Court had left open, notably in relation to the assessment of the case in light of modified factual circumstances.
The Court then stated that in its judgment of 18 March 2008, it already held that the market situation had not changed since 1997 and that Kinepolis’ market share and buying power had not significantly decreased during the period 1997-2007. It had also already held that the geographic definition of the market was still valid. Further, it had already held that maintaining the requirement for Kinepolis to obtain prior approval for the expansion, renovation or replacement of existing cinema complexes was legally justified. As a result, the Court ruled that the Council could not have analysed these points again as it was not competent to do so, and that the Court itself could not re-assess these points unless there were pertinent and significant factors demonstrating that there had been a change in the market situation in the period between 16 April 2007 and 1 October 2008, which was not the case.
The Court added that the Council’s decision of 1 October 2008 was not sufficiently reasoned as to the assessment of the market situation and as to the reason why the conditions imposed on Kinepolis would be lifted automatically after an additional three years. The Court was of the view that after three years the conditions should be subject to reassessment. In view of the Court’s full jurisdiction, it ruled that its analysis on these points could be substituted for that of the Council to the extent that the Council’s decision lacked reasoning.
Finally, the Court stated that there was no reason to refer the case back to the Council as in its judgments of 18 March 2008 and 11 March 2010 it had already ruled on all relevant points. The Council could adopt a new decision only following a new request from Kinepolis after the expiration of the three years’ period.
In conclusion, the Court annulled the Council’s decision to the extent that it had exceeded its competence after the Court’s judgment of 18 March 2008. However, the Court confirmed the parts of the Council’s reasoning with which it agreed and substituted its reasoning for that of the Council where it had not provided sufficient reasons. Hence, the actual outcome on substance for Kinepolis was the same as in the Council’s October 2008 decision, with the only exception being that Kinepolis will have to re-submit a request to lift the conditions after the expiration of the three years period.