As we reported earlier, the Competition Council on 23 December 2011 cleared the acquisition of The Phone House (TPH) by Belgacom, subject to considerable commitments (see Belgian Competition Law Report 2012/Q1). The commitments consisted of the divestiture of over 50 TPH points of sale as well as a number of behavioural commitments, namely an obligation to preserve the multi-operator model in all the acquired TPH points of sale for a period of five years, the transformation of one Belgacom point of sale into a TPH point of sale, and the implementation of a Chinese Walls Policy, in order to preserve the independent operation of TPH.
Shortly after the transaction was closed, Belgacom announced to the Council that one of the TPH points of sale listed for divestiture, had been closed down by Wireless Technologies, the seller. To compensate for this, Belgacom proposed to divest two other outlets which had not previously been ear-marked for divestiture. However one of these newly-proposed points of sale was within a three kilometre radius of the outlet Belgacom had committed to transform into a TPH point of sale. This meant that by transforming the outlet, Belgacom would contravene another commitment not to open any TPH outlets within a three kilometre radius of divested points of sale. Belgacom requested the removal of the obligation to transform the Belgacom point of sale, which would remove the obstacle to the divestiture of the two alternative points of sale.
The Prosecutor objected to the alternative commitments offered by Belgacom, and requested that the Council declare Belgacom’s acquisition of TPH non-permissible since Belgacom had not complied with the commitments. The Council, in a decision of 31 January 2012, rejected the Prosecutor’s request and granted Belgacom’s request to modify the commitments. The Council considered that the alternative points of sale offered by Belgacom were more attractive from a commercial point of view than the point of sale originally listed for divestment and that it would be disproportionate to block the transaction for the reasons given by the Prosecutor
In a separate decision in the same case, the Council on 5 April 2012 imposed a fine of 75,000 EUR on Belgacom for having submitted incorrect or incomplete information in the course of the notification. The Council had requested information regarding the number of new postpaid mobile customers of Proximus (a Belgacom subsidiary) contracted by TPH points of sale but, in the figures provided, Belgacom had omitted the number of postpaid clients that had switched from prepaid to postpaid. Although Belgacom later provided the number sought by the Council, the latter held that the omission had affected the efficient course of proceedings, and imposed a fine. In light of Belgacom’s consistent position and the limited consequences of the failure to provide the correct information, the Council set the fine at a relatively modest level.
Both decisions show that undertakings should be careful when collecting and supplying information to the Council, regardless of whether it relates to the substantive analysis of the case or to the remedy package. It is clear the Prosecutors and Council will not shy away from prosecuting or even fining companies for failure to supply complete and correct information