Since August 2020, the Belgian Competition Authority (BCA) has had special competence regarding abuse of economic dependence. The prohibition on abuse of economic dependence laid down in Article IV.2/1 of the Economic Law Code covers the situation in which a company abuses the relative economic dependence of another company (e.g. a supplier or a customer) when one is an indispensable economic partner for the other.
To demonstrate the existence of an abuse of economic dependence, three cumulative conditions must be met:
- the existence of a position of economic dependence (implying 1. the absence of a reasonably equivalent alternative, and 2. the possibility for a company to impose conditions/services impossible to obtain under normal market circumstances);
- abuse of this position (refusal to supply, discriminatory conditions, excessive prices, etc.); and
- the possibility of this abuse affecting competition on the Belgian market or a substantial part of it.
Under the Code of Economic Law, the ABC is empowered to impose temporary measures, fines and sanctions in cases of abuse of economic dependence. Despite numerous complaints, no formal decision has yet been taken in this area. Up to now, this issue has mainly been the subject of judgments by tribunals and courts.
For the first time, on 28 November 2023, the ABC announced that it had opened an ex officio investigation into abuse of economic dependence in the agricultural sector, following a preliminary investigation that revealed serious indications of possible infringement.
This sector was already considered to be potentially affected by the new ban during the process of adopting the law. Indeed, the parliamentary work highlighting concentrated economic sectors explicitly mentions the agricultural sector, given that farmers are often "suppliers to large companies [...] so that it is virtually, if not totally, impossible for them to escape their contractual obligations to their co-contractor".
Since the law came into force, the ABC has been contacted by companies reporting abuses of economic dependence in their commercial relationships. Thanks to these cases, the ABC has established an analytical framework for this type of restrictive practice. Unfortunately, this framework has not been published, despite the fact that publication of the guidelines was announced three years ago.
The investigation in question concerns one of Belgium's main agricultural sectors, and more specifically a product Belgium is a major EU producer of, although this was not specified in the ABC press release. The organisation of this sector is characterised by a high concentration of buyers while supply from farmers is highly fragmented. As a result, a possible economic dependence of farmers active in this specific sector is likely to affect competition on the Belgian market.
The ABC's decision is expected to be adopted in 2024.
Annabelle Lepièce
Nawal Bouzinab-Chuitar
