Belgian Competition Authority issues new fining guidelines
The Belgian Competition Authority (BCA) has decided to repeal its 2011 Communication on the calculation of fines and replace them with a new set of guidelines which are more in line with European Commission practice.
The BCA explains that its objective is to provide more transparency and legal safety to companies under investigation as to the level potential of fines.
The new Guidelines, issued in late summer, state that, as a matter of principle, fines will be calculated on the basis of the European Commission’s methodology mutatis mutandis, i.e. apart from the concepts of turnover, leniency and recidivism which are specifically defined in the new guidelines to be applied to investigations in Belgium.
For example, the turnover to take into account as a basis of the fine will be, in principle, the turnover that was generated by the company under investigation in Belgium and which is directly or indirectly related to the potential infringement.
The new guidelines came into effect as of 1 November 2014 and apply to all cases, provided that no motivated decisions has been transmitted to the decisional body of the Belgian competition Authority (Collège de la concurrence), except for cases where both the college of the prosecutor has already communicated a range of fines and parties have reached a settlement with the BCA.
The Guidelines are available on the website of the BCA at here.
Compensatory collective redress introduced in Belgium
Recent reform of economic legislation in Belgium included the creation of a collective redress action, which is available since 1 September 2014 under Belgian Economic Code (Book XVII, Title 2).3 As an exception to the rules of Belgian Judicial Code, several consumers can join force in a group which will be headed by an appointed representative to seek redress for a harm deriving from potential violation of by a company of either one of its contractual obligation or by a European regulation or one of many statutes listed in the Code which provide protection to consumer in a certain area of law.
Specific rules apply regarding the nature of the harm, the representation of the group of consumer, the procedure and there is a requirement that for an action for collective redress to be admissible, it has to be more efficient than available actions under civil and commercial law.
According to the Economic Code, such an action may only be initiated by a group representative, i.e. (I) a consumer association with a legal personality and represented on the Consumers’ Council or those which are recognised by the Minister of Economic Affairs or; (II) other associations provided that they fulfill three conditions, i.e. they (i) have had legal a personality for a period which is more than three years, (ii) they are recognised by the Minister of Economy and (iii) that their social purpose is directly related to the collective harm; or (III) the public service of mediation for consumers which may represent a group of consumers only during the negotiation phase of the procedure.
The harm for which redress may be sought must be constituted by a potential violation of by a company of either one of its contractual obligation or by a European regulation or one of the many statutes listed under Art. XVII.37 of the Economic Code (i.e. statutes providing protection to consumers in the fields of competition law, unfair commercial practices, payments and credits, IP, Digital Economy, pharmaceutical products, health protection, insurance, product safety, data protection, etc.).
It should be noted that transitional provisions state that the claim may only be filed for a harm based on a common cause for the consumers which occurred after the entry into force of this law introducing collective redress, i.e. not prior to 1 September 2014.
An action for collective redress which is to be filed only before the Courts of Brussels, follows a three steps procedure where (i) the judge decides on the admissibility of the action based on the description of the group, the representative, the common harm, the choice of the representation system (i.e. opt-in or opt-out), then if the action is deemed admissible (ii) the representative and the defendant have the possibility to negotiate a settlement which would be homologated by the judge and finally (iii) if no settlement is reached the normal procedure is resumed and the judge may rule that the defendant has to indemnify the group of consumers. In practice, a trustee will be appointed to manage the list of consumers and handle the grant of damages.
This collective redress regime does not come with any big surprise features. The aim to avoid abusive litigation, by defining narrowly what type of entity is entitled to represent a group of consumers for the purpose of collective redress, and by making sure early in the process that manifestly unfounded cases are not continued, is typical of the European tendency to look at US class actions with suspicion. In this regard, the Belgian system is similar to the French regime, introduced earlier this year, and coherent with the recommendation published by the European Commission in June 2013.
It is however quite notable that unlike France, and probably inspired by the Netherlands, Belgium has chosen to allow the opt-out representation system (at least regarding consumers living in Belgium).
In any event, in the field of competition law, additional care is now advisable whenever there is a risk of successful collective redress action in Belgium.