Reform Belgian Competition Regime

28 July 2006

Wilko Van Weert

July 2006

On 10 July 2006, two new laws were formally adopted which will replace the current Belgian Competition Act of 1999. The new Competition Act and the new Act establishing the Competition Council (collectively, the “new Act”) are due to come into force as a single coordinated text on 1 October 2006. The new laws aim to strengthen the Belgian competition authority, whilst adapting Belgian competition law to the current updated position at the EU level. They contain a number of substantive, procedural and institutional changes, the most significant of which are summarised below.

Substantive Changes

Restrictive Practices

  • The new Act abolishes the notification procedure by which companies seek to gain exemption from the prohibition of anti-competitive agreements. In line with EU law, companies must now, instead, proceed on the basis of self-assessment of their agreements and practices. Any current notifications before the Competition Council will lapse.

  • The new Act makes clear that agreements which come under any EU Block Exemption Regulation will automatically be considered exempt, even if they fall exclusively within Belgian Law.

  • It will be possible under the new Act for the competition authority to accept ‘commitments’ in order to close investigations into infringements.

  • The leniency procedure adopted in 2004 will have a formal legal basis. Under that procedure, a company that is party to a restrictive practice can obtain immunity or reduced fines under certain conditions.

Merger Control

  • The admissibility test for proposed concentrations will change so that concentrations that would “significantly impede effective competition” must be blocked. This is slightly broader than the current “create or strengthen a dominant position” test. It brings the test in line with the recent changes in the EU Merger Regulation.

  • The thresholds triggering the notification of a concentration that were adopted in 2005 are now integrated into the new Act, i.e. when the aggregate Belgian turnover is more that €100 million and at least two of the parties have an individual Belgian turnover of €40 million.

  • As with restrictive practice investigations, it is made explicit that the competition authority will have the ability to deal with commitments in the context of merger control (i.e. to authorise a proposed concentration on the basis that certain commitments are made by one or more parties).

Procedural Changes

Restrictive Practices

  • The maximum level of fines for procedural infringements and penalty payments will be set by reference to a percentage of the undertaking’s turnover, rather than an absolute figure (as it is currently in certain cases).

  • The Competition Council will have the power to determine appeals made against decisions of the newly named Body of Auditors (‘Auditorat’ – see below). Where the outcome turns on the interpretation of a law, it will now only be optional, rather than obligatory, for the body concerned to make a preliminary reference. Further, the Supreme Court, instead of the Court of Appeal, will now have the power to hear such preliminary references.

Merger Control

  • Notification: there will no longer be a time limit within which to file merger control notifications (as long as notification occurs before the concentration is realised), and only the acquiring party will be obliged to notify.

  • The time limits within which a decision is given will be extended (40 working days for first-phase decisions and 60 for second-phase, with the possibility of extensions where e.g. commitments are given).

  • There is a stricter rule governing the implementation of concentrations, which will not be able to take place until the Competition Council has cleared the operation (‘standstill obligation’). This replaces the current prohibition on taking any irreversible measure leading to a lasting change in the structure of the market before the concentration is cleared.

  • Under the new simplified authorisation procedure, if the necessary conditions are met, the Auditor will confirm by letter within 20 working days that a proposed concentration poses no competition concerns.

  • As in restrictive practices cases, decisions of the Competition Council may be appealed to the Brussels Court of Appeal. The new Act makes clear that that Court will have full jurisdiction (including the possibility of substituting its own decision for that of the Council).

Institutional Changes

  • As mentioned above, the current Body of Reporters will be known as the Body of Auditors, and will become a division of the Competition Council (the decision-making body), rather than the Competition Service (the investigating body).

  • The Body of Auditors will consist of 6 to 10 members and will have the power to deal with complaints and applications for interim relief in relation to restrictive practices, notifications of concentrations, and the confidentiality of information submitted by the parties. It will have extensive powers of investigation, and will be assisted by the Competition Service in its duties. The Competition Council will act as an appeals body in relation to these decisions.

  • The composition of the Competition Council will also change: it will consist of 6 part-time and 6 full-time members, who will have to be appointed anew (as opposed to the current 16 part-time and 4 full-time members).

Source: The two laws making up the new Belgian Competition Act can be found in French here: 10 JUIN 2006. - Loi sur la protection de la concurrence économique; 10 JUIN 2006. - Loi instituant un Conseil de la concurrence.