Belgian Competition Act which came into effect in September 2013

Koen Platteau outlines the operation of the Belgian Competition Act which came into effect in September 2013.

In September 2013, the entirely redrafted Belgian Competition Act entered into force.  The main changes in the new Belgian Competition Act are of an institutional and procedural nature and seek to make the Belgian Competition Authority more efficient.  The institutional structure has been streamlined and is designed, together with a new set of procedural rules, to remove previous bottlenecks in the procedure.  Interestingly, apart from its traditional powers of enforcement in the competition law area, the new Belgian Competition Authority is also expected to play a role in price control.

Substantive competition law

The substantive provisions of Belgian competition law have remained unchanged.  Thus, the equivalent provisions of Articles 101 and 102 TFEU and the previously existing Belgian merger control rules have found their way into the new Act.

A novelty is that physical persons are now also caught by the competition rules.  The new Act prohibits involvement in hard-core restrictions (price fixing, output restrictions, market sharing) by physical persons acting on behalf of an undertaking or an association of undertakings.  The sanction is an administrative fine of up to €10,000.

The new Belgian Competition Authority

The Belgian Competition Authority used to have a complex structure, and one of the main objectives of the new Act was to create a more coherent entity.  The new Authority is a separate, autonomous entity and has a more streamlined structure.  However, the traditional distinction between investigation and decision-making has been maintained.  Investigations are in the hands of the competition prosecutor-general, a function that also existed in the previous structure, and his/her team.  Decisions in individual cases are now made by a Competition College, a newly created body.  This College is not a permanent body, but it is established for each case on an ad hoc basis.  Each Competition College consists of three members, i.e. the President (or Vice President) and two assessors appointed on an ad hoc basis. 

The President of the new Authority has significant powers.  The President combines representative, policy-making and management functions with involvement in the decision-making process.  At decision-making level, the President is the only person with a full-time mandate.

Procedure

Separation between statement of objections and draft decision

The new Act provides for a two-step procedure, whereby the incriminated parties receive a statement of objections at the investigation stage, and have an opportunity to reply to this statement of objections at that stage of the procedure.  This is a novelty in comparison to the previous regime.  On the basis of the replies, the competition prosecutor then prepares a draft decision, which opens the decision-making phase before a Competition College.

Short time-limits

The strict time-limits that now apply to the incriminated parties are one of the most striking features of the new Belgian Competition Act.

At investigation level, the new Act provides for a time-limit of at least one month, to be set by the competition prosecutor, for the incriminated parties' replies to the statement of objections.

At the decision-making level, the incriminated parties have a time-limit of two months for their defence.  This time-limit starts to run upon the parties having received full access to the file.  The President is entitled to extend the two month time-limit where appropriate.  Interestingly, the Act prohibits parties from submitting pieces of evidence which have not been submitted at investigation level (unless they relate to new facts or objections).  This feature makes the phase of reply at investigation level all the more important.

The Competition College has to organise a hearing between one and two months after the submission of the replies.  The Competition College must adopt a decision within one month after the hearing, thus bringing the duration of the phase before the Competition College to no more than six months.

Leniency

In line with the extension of the scope of the new Act to certain conduct of physical persons, the Act now also provides for leniency applications filed by physical persons.  These applications (and the possible immunity) only relates to the behaviour of the physical persons.  However, it is not excluded that in the same case both the undertaking concerned and the (related) physical person may obtain full immunity, each for their own conduct.

Settlement

Much in line with the settlement procedure that exists at EU level, and as another example of the wish to accelerate the procedure, the new Act now also provides for a settlement procedure before the Belgian Competition Authority.  As at EU level, the reduction of the fine is limited to 10%.  Settlement decisions are made at the level of the competition prosecutor, without any involvement from a Competition College.  As opposed to the EU level, settlement decisions are final and are not subject to appeal.

Interim measures

It is in the area of interim measures that the option for shorter procedures has its most striking impact.  First of all, the investigation phase has been dropped, and the case is directly brought before a Competition College.  Within one month of the submission of a request for interim measures, the case is to be heard, and the Competition College has to render its decision within one month of the hearing.  In the absence of a decision within this time-limit, the request is considered to be rejected.  The time-limits (for the hearing and for the decision) can be extended by a maximum of two weeks.

Appeal

The Brussels Court of Appeal remains the entity in charge of judicial review of the decisions of the Competition College.  The new Act defines more clearly the types of decision that can be appealed.  An appeal can now also be lodged against the use of pieces of evidence obtained via an on-the-spot investigation.  The appeal has to be lodged against the Belgian Competition Authority.  This addresses the issues raised in the Court of Justice's VEBIC judgment.

Price control

In a much criticised move, the new Act now also empowers the Belgian Competition Authority to intervene in price control matters.

The principle is that prices are the result of competitive market forces.  However, the Price Observatory (a department within the Federal Ministry of Economy) is entrusted with the task of monitoring price developments.  When it establishes problems in the area of prices or margins, an abnormal price evolution or a structural market issue, it has to report its findings to the Minister of Economy, the Belgian Competition Authority and, where relevant, the sector regulators.  These principles apply horizontally to all sectors except to pharmaceutical products, where a special regime applies.

On the basis of the report by the Price Observatory, a Competition College can impose interim measures if there is an urgent need to avoid a situation likely to cause serious, imminent and irreparable damage to undertakings or consumers or likely to harm the general economic interest.  Interim measures can be imposed for a maximum term of six months and they can take various forms, such as a price freeze or a price cap.  Within fifteen calendar days after the submission of the report, the Competition College has to organise a hearing with the undertakings or the sector involved.  The Competition College must decide whether to impose interim measures within one month of the hearing.  In the absence of a decision within this time-limit, no interim measures are issued.  The new Act provides that the Belgian Competition Authority cannot impose interim measures in these sectors where price levels can be set by or on the basis of separate legislation.  This is the case in certain regulated sectors such as energy (at least in those areas where the law provides for price regulation).

Interim measures are subject to judicial review by the Brussels Court of Appeal.  The new Act provides that the Court of Appeal has to render its judgment within a period of six months after the decision of the Competition College.

When an interim measure has been adopted, the Minister of Economy has to submit, within a period of six months from the decision of the Competition College, proposals to restructure the relevant sector to the Federal Government.  The new Act does not provide for a time-limit for the Federal Government to act.

Concluding remarks

The new Act reflects high ambitions for the new Belgian Competition Authority.  Many features of the new Act have been designed to make the Belgian Competition Authority more efficient and the procedures swifter and more result-oriented.  This should lead to a shorter time frame between the launch of an investigation and the end decision, which in turn should lead to a higher output.

Concerns have been raised in relation to the short time-limits for the incriminated parties to prepare their defence.  These features may make the judicial review procedure even more important than it already has been to date, thus possibly further extending the overall length of the procedure (even if the speed is expected to be accelerated at the level of the Belgian Competition Authority).

Finally, it remains to be seen how the Belgian Competition Authority will make use of its new powers in price control matters.  This is uncharted territory for the Authority.

This document (and any information accessed through links in this document) is provided for information purposes only and does not constitute legal advice. Professional legal advice should be obtained before taking or refraining from any action as a result of the contents of this document.