Conditions had been imposed by the Belgian Competition Council in 1997 when it granted approval for the concentration of the Group Bert and Group Claeys, which created the Kinepolis Group. In April of this year, the Council, at the request of Kinepolis, assessed the extent to which the market structure had changed since 1997 and concluded that it was no longer justifiable to maintain the conditions imposed.
This decision to grant Kinepolis freedom of action on the Belgian market was immediately challenged by UGC, Utopolis and The Federation of Cinemas in Belgium (FCB), which lodged an appeal. They mainly argued that the Council, when determining Kinepolis’s current market share, had failed to take into account new Kinepolis complexes which opened in Bruges and Ostend, and pointed out that the Council had, on different occasions, departed from the auditor’s analysis.
The Brussels Court ruled in an interim decision that the abolition of the conditions might recreate or further expand the dominant position of the Kinepolis group and therefore suspended the Council’s decision. As a consequence, Kinepolis will have to continue abiding by the conditions for the time being, which implies that it will need to request approval of the Competition Council for each considerable expansion or renovation project and notify reallocation of seats and theatres.
This is the second time that the Brussels Court of appeal overrules the Competition Council in the area of merger control. The first time was in autumn 2005, when the Court annulled the Council’s conditional approval of the acquisition of the Belgian French-language financial newspaper L’Echo by publishing groups De Persgroep and Rossel.