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Belgium

By Prof Dr J Steenbergen of Loeff Claeys Verbeke Brussels, University of Leuven The amendments are concerned primarily with the rules on merger control and joint ventures. The law of April 26 1999 also addresses a number of procedural issues.

Belgian Competition Law is modelled on the EU rules of competition

The Belgian Competition Act has three chapters:

Chapter one

Article 2 is a virtual copy of Article 81 (ex 85) EC Agreements, decisions by associations of undertakings and concerted practices which have as their object or noticeable effect the prevention, restriction, or distortion of competition within the concerned Belgian market or a substantial part thereof prohibited pursuant to paragraph 1, are null and void pursuant to paragraph 2, unless exempted by application of paragraph 3.

Chapter two

Article 3 prohibits abuses of dominance positions and is the Belgian equivalent of Article 82 (ex 86) EC.

Chapter three

The Articles 9 and following organize a merger control and are modelled on the regulation 4064/89 EC (the Merger Regulation) as modified by regulation 1310/97 EC. The procedure is designed to enable the authorities to verify whether a concentration is likely to result in the creation or strengthening of a dominant position on the Belgian part of the relevant market. When the Council finds that an agreement or practice restricts competition in violation of Article 2 or 3 of the Act a maximum fine of 10% of the total turnover for the previous year and a penalty of BEF250,000 per day may be imposed.

Likewise, the implementation of a non-notified but notifiable concentration or the failure to refrain from acts which impede the reversibility of the concentration or which permanently change the structure of the market in respect of a notified concentration, can give rise to a maximum penalty of 10% of the consolidated turnover of the parties.

The Belgian courts and authorities, almost without exception, refer to the decisions by the Court of Justice, the Court of First Instance and the Commission decisions relating to the equivalent EC law provisions.

It should also be noted that Article 8 stipulates that agreements which benefit from an exemption under Article 85(3) EC (group exemptions as well as individual exemptions) do not need to be notified to the Belgian authorities (in order to request for a Belgian exemption). Article 32 adds that the Competition Service cannot take any action with regard to agreements that benefit from an EC exemption. It follows that no fines can be imposed under the Belgian Competition Act in respect of any agreement that benefits from an EC exemption.

The new Belgian Merger Control rules

Acquisitions and joint ventures

Since the amendments, the Act is applicable to mergers and joint ventures with a "Belgian dimension".

As is the case under the EU Merger Control rules as amended by regulation 1310/97 EC, the Act now distinguishes the following types of joint ventures :

  • Joint ventures which are not full-function, or which are full-function but which do not have a Belgian dimension — these joint ventures may be subject to the rules of Article 2 of the Belgian Competition Act but not to the Merger Control rules. A joint venture is deemed to be full-function if it performs on a lasting basis the functions of an autonomous economic entity.

  • Cooperative joint ventures which are full-function and which do have a Belgian dimension — these joint ventures must be examined according to the procedures organized in the Merger Control rules, but they will be assessed in accordance with the assessment criteria of Article 2 paragraph 1 and 3 of the Belgian Competition Act. A joint venture is deemed to be cooperative if it may lead to a coordination of market behaviour of the parent companies.

  • Concentrative full-function joint ventures with a Belgian dimension — these joint ventures will be examined according to the procedures of the Merger Control rules and they will also be assessed in the light of the assessment criteria of Article 10 of the Belgian Competition Act.

    Concentrations with a Belgian dimension

    Concentrations have, according to Article 11 of the Belgian Competition Law, a Belgian dimension if the undertakings concerned have together a turnover in Belgium of more than euro40 million ($40 million), and at least two of the undertakings concerned have a turnover in Belgium of at least euro15 million.

    It may be recalled that under the previous rules, the main threshold was a market share criterion of 25% of a concerned market in Belgium.

    The amended merger control procedures

    • A first and welcome change is that the law now stipulates that draft agreements may be notified.

    • The time period for a first phase investigation is extended from one month to 45 days.

    • The time period for a second phase investigation has been reduced from 75 to 60 days.

    • The new law introduces — in addition to the first and second phase Merger Control investigations — the possibility to ask the (Belgian) Council of Ministers to review a second phase Merger Control decision of the Competition Council. The Council of Ministers will assess whether it may be justified to authorise a concentration in the light of considerations of general interest, notwithstanding the fact that it has been found that the concentration will create or strengthen a dominant position, likely to affect competition. The new Belgian rules introduce thus a possibility which already exists in several competition law systems such as the Dutch, the French and the German competition laws.

    Contact Details:

    Loeff Claeys Verbeke

    Avenue de Tervuren 268A

    B1150 Brussels

    Belgium

    Tel: +32 2 778 2211

    Fax: +32 2 763 2185

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