Merger reviewi Significant cases
In 2018, about 36 merger decisions were adopted by the BCA, which cleared the majority of the examined concentrations under the simplified procedure. Only one of the decisions involved commitments. This decision will be briefly discussed.
In Volvo/Kant, the BCA allowed the acquisition of Kant, owner of several independent Volvo distributorships and service points. Following the investigation by the BCA, the Auditor found that the transaction would create a significant impediment to effective competition. Although this created the possibility for Volvo to offer commitments, none were offered and a hearing was held. Following the hearing, the president invited Volvo to offer commitments and such commitments (appointing a new independent distributor in the disputed area and closing another distributorship operated by Kant) were accepted by the BCA, thereby avoiding opening a second phase investigation.
In last year's chapter, the BCA decision lifting certain conditions imposed on Kinepolis Group was discussed. These conditions were imposed following the merger of two independent movie theatre companies forming Kinepolis in 1997. They required prior approval for any acquisition of another movie theatre even when notification thresholds were not met. The commitments even required Kinepolis to obtain prior approval for internal growth, leading to a raft of closures of movie theatres in order to replace them by others in other commercially more interesting geographic areas and to avoid the prior authorisation process for internal growth. Finally, a number of commitments were also given relating to not concluding programming agreements with independent movie theatres, and not concluding exclusivity or priority deals between Kinepolis and its daughter, KFD, which is a movie distribution company. Following earlier attempts to lift the conditions between 2006 and 2010, Kinepolis filed a new request in 2017, resulting in a partial lifting of the conditions: as of 31 May 2019, Kinepolis will be allowed to grow internally without having to apply for prior approval. However, Kinepolis saw its potential to expand unchecked as of 31 May 2019 thwarted by two judgments rendered by the Brussels Market Court. First, on 28 February 2018, the 2018 BCA decision was annulled in as far as that decision lifted the requirement of prior approval by the BCA for Kinepolis' internal growth. Following that judgment, the BCA adopted a new decision on 26 April 2018 reconfirming the lifting of the prior approval condition for internal growth as from 26 April 2020. That decision was again annulled by the Brussels Market Court because the BMA was composed of the identical group of individuals that took the 2017 BCA decision.ii Trends, developments and strategies
Belgium has turnover thresholds that are too high when compared with its economy and the average size of companies active in Belgium.
A concentration must be notified when two of the undertakings involved in the transaction each have a turnover in Belgium amounting to €40 million. In addition, all the undertakings concerned must have jointly a €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. 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 BCEL clearly stipulates that in the case of the referral of a transaction to the Belgian level, a new notification must be filed with the Prosecution Body.
Accordingly, only a few transactions must in principle be examined by the BCA, since operations implying undertakings that do not meet these thresholds do not have to be notified, whereas transactions implying bigger companies must rather be notified at the European level.
In May 2017, the BCA published an evaluation report regarding the notification thresholds for concentrations in Belgium. It concluded that these thresholds are already sufficiently high and should not be raised, and that there is also no need to lower them. The Prosecution Body nevertheless proposes that in the event that the notification thresholds would be lowered, this should happen only in relation to certain specific sectors, as this is the case in France, but not in general. In any event, the BCA indicates that a public consultation should be organised should a concrete proposal to modify the notification thresholds be discussed.