This contribution provides an overview of the most important and relevant developments occurred in Belgium over the past 12 months, illustrated with some recent cases. On 3 April 2013, a new act inserting competition law provisions into the Belgian Code of Economic Law (BCE) and abrogating most of the provisions of the Belgian Act on the Protection of Economic Competition (APEC) was adopted. The new act entered into force before on 6 September 2013. Consequently, this overview covers the first full 12-month period under the new act (ie, June 2014 until 31 May 2015).
On 3 April 2013 the Belgian parliament adopted 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. As a result of this act, a newly composed Belgian Competition Authority (BCA) was created, consisting of four distinct components:
- the president of the BCA;
- the Competition College, entrusted with decision-making powers;
- the competition board; and
- the prosecution body, tasked with investigative powers under the direction of the General Prosecutor.
Another important novelty under the new act was 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). Along therewith, the BCE also introduces the possibility for individuals to lodge a personal leniency application.1 At the time of writing, no individual has yet been prosecuted for direct involvement in hard-core antitrust infringements.
New fining guidelines
Contrary to the guidelines for immunity and leniency applications, which date from 2007, the BCA has in the meantime adopted new fining guidelines. These were adopted on 26 August 2014 and were published in the Belgian Official Gazette of 10 September 2014. The aim of the new fining guidelines is to bring them more in line with the European Commission’s fining guidelines. It is clear that under the new fining guidelines fines are intended to be much higher (mostly as a consequence of the much greater weight given to the duration of the infringement). At the time of writing, no decisions applying the new fining guidelines had been adopted.
First amendment to the BCE relating to competition enforcement
Following the entry into force of the new Competition Act, four cases were reactivated by the BCA. One of these cases concerned an abuse of a dominant position. The three other cases concern alleged cartel behaviour. In these three cases, the parties concerned introduced appeals before the Brussels Court of Appeals questioning the legality of the dawn raids carried out under one of the previous competi- tion acts. As all three cases were relatively old cases, there was a risk that the cases would become time-barred as a result of the statute of limitations. To remedy this, by the act of 2 April 2014 a provision was inserted stating that the statute of limitations is suspended as long as an appeal against a decision of a Prosecutor or the Prosecution body is pending before the Court of Appeals.
Pursuant to article IV.25 BCE, the Competition Board each yearhas to adopt anotesetting outits policy priorities. Thepriorities for2015 were published on 21 April 2015 and also included in the 2014 Annual Report of the BCA, released on 22 May 2015.2 The policy priorities are largely unchanged compared with the 2014 version. For 2015, extra attention will be paid to the following sectors: liberalised sec- tors and network industries, large distributors and their relationships with their suppliers, media and digital economy, financial sector, service providers to companies (and consumers), public tenders.
In Spira v De Beers3 the decision by the Prosecution body not to further investigate the complaint by Spira was, among others, based on the fact that the case did not fit with the BCA’s priority policy (as laid out in its priority policy statement for 2014) since diamonds was not one of the sectors covered by the priority policy note. However, even if it were mentioned, the BCA has now clarified that the need for an overall good allocation of resources may also justify not taking up a particular case. Also in Comptoir de Russie,4 the Prosecution body stated that the agreement between the Régie du Travail Pénitentiaire and the federations of sheltered workshops not to compete for the same clients and not to distort pricing would not be further investigated as it did not fit within the priorities set out in the policy priorities note.5
Guidance on informal opinions of the President of the BCA
On 27 January 2015, the BCA published a guidance note on informal opinions given by the President of the BCA. The note stresses that the possibility of informal opinions is provided for in article IV.20, section 1 BCE. The President establishes a number of criteria that have to be met before a request is eligible for an informal opinion (eg, no other authority is investigating this issue, there is no prec- edent, the issue must be sufficiently important in terms of economic or societal importance). Even if these conditions are met, based on priorities and available resources, the President can always refuse to provide an informal opinion. In principle, such informal opinions will be published.
Cartels – anti-competitive agreements
Article IV.1 BCE 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’. It also 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.
At the time of writing the present contribution, no decision of the Competition College based on the new article IV.1 BCE has been adopted. Other than the cases discussed below, the Prosecution body also decided to close two investigations concerning cargo handling for lack of evidence of illegal behaviour.6
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 (CBR), Compagnie des ciments belges (CCB), Febelcem (ie, the sector association) and CRIC (ie, a research centre) for concerted practices between May 2000 and October 2003 in the cement sector.7 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 among others by 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 that (last) 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.8 The Belgian Supreme Court rendered its decision on 20 November 2014,9 confirming that an appeal could be lodged before the Brussels Court of Appeal, following the procedure provided for in article IV.79 BCE, even for cases before the entry into force of the new competition act. Such cases must be lodged with the BCA as a defendant. The case on the merits is still pending before the Court of Appeals.
Investigation in the paints sector
In the framework of another pending cartel investigation, where the appeal was lodged under the old competition act, the Court of Appeals10 ruled that discussions on the in, or out of, scope character of a document cannot be resolved by the BCA by simply stating that the document in question contains relevant market information. The authority has to provide a specific motivation. Upon receipt of such specific motivation, the defendant can then rebut the BCA’s motivation. If no sufficient motivation can be given, the document at issue must be removed from the file. If the parties cannot agree on the status of the document, the Court of Appeals will have the final word.
Provisional measures in the car sector
By decision of 11 July 2014, the BCA imposed interim measures upon BMW Belgium Luxembourg at the request of a former recognised BMW and Mini dealer (Feltz).11 More specifically, the BCA required BMW to take the necessary steps so that Feltz could remain active in the market as an independent repairer. BMW had to send a letter to Feltz customers stating that they are free to choose where they want their car to be maintained and that they would not lose the warranty on the car if Feltz was chosen for car maintenance. BMW also had to send a letter to all recognised Belgian distributors and repairers confirming that they can sell spare parts and cars to independent car repairers and sellers. Based on developments in the case, the interim measures were lifted six weeks later.12
No cartel between energy companies with regard to green energy certificates
By decision of 12 December 2014, the Prosecution body of the BCA decided to close its investigation into parallel behaviour between sup- pliers of electricity with regard to how fines relating to green energy certificates were charged to final consumers. After organising dawn raids in October 2011 and further investigation, the Prosecution body concluded that the parallel behaviour as to how green energy certificates were charged to final consumers as well as the amount that was actually charged was the result of market transparency and of the regulatory framework. It was not the outcome of any anti- competitive behaviour on the part of the companies investigated.
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.’
The period covered in this overview saw the adoption of one decision finding an abuse of a dominant position, as well as the closure of a number of pending investigations. In the area of virtual printing fees, the prosecution body decided to reject a complaint as the existence of a dominant position held by one of the Hollywood studios could not be proven. Also the existence of a collective domi- nant position was rejected by the Prosecution body.13 With regard to greenhouse gas emission allowances, the BCA also decided to reject a complaint directed against Electrabel14 as it could not find the existence of excessive prices charged by Electrabel by including the opportunity cost of greenhouse gas emission allowances into its resale price. It also could not be established that Electrabel engaged in margin squeezing of the complainant. Finally, no discriminating behaviour on the part of Electrabel could be established.
Also, 2014 saw the first abuse of dominance decision of the new BCA resulting in fines imposed on Electrabel in the amount of €2 million. The (former) College of Competition Prosecutors 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 did indeed conclude that Electrabel engaged in abusive practices concerning, on the one hand, capacity withholding (from 2007 to 2010) and, on the other hand, fictive sale of tertiary reserve (in the years 2006 to 2007). By decision of 18 July 2014, the Competition College concluded that by adopting and applying for sales of parts of the reserved capacity on the Belpex DAM exchange a price scale including an excessive margin of €60/ MWh, Electrabel abused its dominant position on the market for electricity production, wholesale and trade, in violation of former article 3 APEC and of article 102 TFEU (ie, the first abuse reported by the Prosecution body). Applying the former 2011 guidelines for the calculation of fines, given the fact that the Prosecution body’s draft decision had been filed to the President of the Competition College before the entry into force on 1 November 2014 of the new Belgian fining guidelines, the Competition College imposed a fine of €2 million on Electrabel, which is far below the proposal made by the Prosecution body in its draft decision. It is also worth noting that the College expressly indicated in its decision that in view of the modest character of the basic amount of the fine, there was no need to take into account attenuating circumstances in order to further reduce the amount of the fine to be imposed. No appeal against this decision was lodged by Electrabel.
The BCE requires that parties to a concentration notify the transaction to the prosecution body when two cumulative turnover thresholds are met.15 This is the case when two of the undertakings16 involved in the transaction each have a turnover in Belgium17 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.18 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. 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 prosecution body.
Parties are required to suspend completion of the merger until the Competition Council has approved the transaction.19 This obligation is subject to heavy fines, which can be as high as 10 per cent of each of the parties’ turnover in Belgium.20 In exceptional cir- cumstances, the Competition Council can grant a derogation from the suspension obligation.21
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,22 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 competition prosecutor will render a decision within 15 working days.23 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 prosecution body, the Competition College 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 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 College 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 40-working-day deadline (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 30-working-day deadline 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 submission of the sup- plementary 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 (un)conditionally or block the concentration. When the Competition College does not take a decision within the standard 60 working days deadline (which may be extended in case of commitments or at the express request of the parties), the transac- tion is tacitly approved.
In June 2014–May 2015 the BCA took one decision under the regular procedure (all other decisions were taken under the simplified regime). By a decision of 10 June 2014, the Competition College unconditionally cleared the acquisition of Club by ZuidNederlandse Uitgeverij, together with its subsidiary Standaard Boekhandel, also active in the sector of books and newspapers. The Competition College came to the conclusion that both parties were complementary and that there was very little horizontal overlap. As to market definition, the issue whether internet sales had to be included in the relevant market was finally left open. Similarly, the question as to whether French-language books sold in Flanders and Dutch-language books sold in the French-speaking part of the country should be included in the geographic market definition was also left open as it would not influence the outcome of the case.
The Brussels Court of Appeals in the same period dismissed an appeal24 against the decision of the Competition College in Koninklijke Belgische Touring Club/Touring Club Royal de Belgique.25 Furthermore, a somewhat ‘hot’ merger control issue in Belgium relates to third parties’ right of access to the file in merger cases. Indeed, whereas no Belgian competition law provision expressly provides for a right of access to the file for third parties in merger cases, the Brussels Court of Appeals, by judgment of 19 November 2014,26 ordered the BCA to send a merger case file (including an inventory thereof) to the registry of the Court in order for a competitor of the two merging entities to consult the inventory of that file, and thereafter to inform the Court about the documents which should be accessible in order for that competitor to effectively make use of its right of appeal against the BCA decision that had cleared the merger at stake.