By Law of 28 February 2022, the Belgian legislator has transposed the ECN+ Directive that seeks to strengthen national competition authorities. Aside from other substantive changes to the Belgian competition law rulebook, a fee is introduced for merger filings with the Belgian Competition Authority. The Law enters into force on 17 March 2022.
Directive (EU) 2019/1 of the European Parliament and of the Council of 11 December 2018 to empower the competition authorities of the Member States to be more effective enforcers and to ensure the proper functioning of the internal market, called the ECN+ Directive, seeks to strengthen national competition authorities (NCAs) by ensuring that their (i) independence, (ii) resources in the broad sense and (iii) effective overall enforcement, investigation and fining powers are guaranteed. To guarantee the effectiveness of competition law enforcement, an NCA must in particular be able to:
- carry out inspections (dawn raids);
- address requests for information to undertakings and its employees and interview the employees;
- impose behavioural and structural remedies;
- enforce interim measures and commitments during its investigation; and
- impose fines and periodic penalty payments.
Moreover, the ECN+ Directive aims at preventing a divergent application of the European competition framework by improving cooperation and by applying uniform standards for all NCAs when they apply EU competition rules, in parallel with national rules, namely in cases where trade between Member States may be affected or on a stand-alone basis.
The ECN+ Directive had to be implemented into national law by 4 February 2021. With a slight delay, the Belgian legislator has transposed the ECN+ Directive by the Law enacted on 28 February 2022 and published in Belgium’s Official Gazette on 7 March 2022.
In light of the ECN+ Directive’s above-mentioned objectives, the transposition introduces several clarifications and modifications to the Belgian Code of Economic Law (CEL) that governs the institutional, procedural and decision-making rules of the Belgian Competition Authority (BCA).
Key amendments include:
- broadening the areas in which the BCA can impose (i) fines of up to 1% of worldwide annual turnover on companies, e.g. for failing to notify a notifiable merger and for not respecting interim measures, and (ii) periodic penalty payments of up to 1% of average daily turnover, e.g. for providing incomplete or incorrect information in response to requests for information or missing the deadline to reply, or for not showing up at a hearing;
- making the full set of rules on leniency programmes hard law by incorporating them in the CEL from the guidelines, while relaxing language requirements in this context but making summary leniency applications subject to stricter conditions;
- improving cooperation with other NCAs and the European Commission around dawn raids, leniency procedures and other information exchanges;
- amending the Belgian Criminal Code to allow criminal immunity for bid-rigging infringements when an application for immunity to the BCA has been fruitful and all information pertaining to the infringement has reached the public prosecutor;
- limiting the exclusion of unlawfully obtained evidence in competition law investigations;
- introducing the option for the BCA to appeal a judge’s decision not to allow an inspection to the Brussels Court of Appeal; and
- enabling concentration parties to appeal the decision by the Competition Prosecutor refusing the use of the simplified procedure to the Market Court.
The ECN+ Directive also has as its objective to oblige Member States to substantively enhance NCAs’ resources. The BCA has for decades requested more financial and human resources to effectively carry out the task of safeguarding competitive market conditions in Belgium by investigating anticompetitive practices. In this regard, the new Competition Prosecutor General announced that an additional budget of EUR 600,000 (on a total budget of EUR 7.5 million) had been allocated to the BCA.
From now on, undertakings that notify their transactions under the merger control procedure will also contribute to the BCA’s financing. Under the new Law, the notifying parties will have to pay a one-off filing fee of EUR 17,450 in the case of a simplified procedure and EUR 52,350 for the normal procedure. This fee is expected to generate around EUR 800,000 per year.
Thanks to these additional resources, the BCA plans on setting up a team to focus on mergers while the rest of the staff will continue to focus on investigations relating to competition law infringements.
These new rules have entered into force on 17 March 2022.
Annabelle Lepièce - Partner, Brussels
Sander De Volder - Junior Associate, Brussels
