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.