On 13 November 2015, a draft bill introducing into Belgian competition law a new infringement called “abuse of significant dominant position” (the “Draft Bill”) was submitted to the Chamber of Representatives of the Belgian Federal Parliament.
The Draft Bill, submitted by Members of the Parliament, follows the announcement made on 8 July 2015 by the Minister of Economic Affairs and Consumers, Kris Peeters, that he is examining whether, and in what form, a prohibition on the abuse of economic dependence, as is in place in France, could be introduced in Belgium (see VBB on Belgian Business Law, Volume 2015, No. 7, p. 17, available at www.vbb.com).
The aim of the Draft Bill is to protect small companies which are in a relationship of economic dependence vis-à-vis bigger companies. These bigger undertakings may find themselves in a position of “relative” dominance (vis-à-vis certain undertakings only) but not in an “absolute” dominant position on the market, and thus fall outside the scope of Article IV.2 of the Code of Economic Law (“CEL”), which prohibits abuses of a dominant position (the Belgian provision corresponding to Article 102 TFEU). Also, Article IV.2 CEL only applies if the abuse distorts competition in the entire market concerned, which is not necessarily the case where an undertaking commits an abuse of its dominant position vis-à-vis a specific undertaking only.
Therefore, the Draft Bill aims at introducing a second paragraph in Article IV.2 CEL to prohibit “abuses of a significant dominant position”. A “significant dominant position” would include (but would not be limited to) the situation where there is a “link of economic dependence between the buyer and the seller”. This is described in the commentary attached to the Draft Bill as situations where a business relationship is so unbalanced that, in practice, it is impossible for one of the undertakings concerned to turn to another trading partner.
The Draft Bill contains a non-exhaustive list of practices which would be considered as abuses of a significant dominant position:
- to apply dissimilar conditions to equivalent transactions with other trading parties, thereby placing them at a competitive disadvantage;
- to permanently impose on the producer or the supplier of a good a requirement to sell it at a price which does not cover the cost of production, thereby placing the producer or supplier at a competitive disadvantage;
- to permanently impose on a buyer a requirement to acquire goods at a price significantly higher than the market price, thereby placing the buyer at a competitive disadvantage;
- to directly or indirectly impose unfair trading conditions;
- to suddenly terminate an existing commercial relationship, or to threaten to do so.
If the Draft Bill is adopted, undertakings which commit an abuse of a significant dominant position will be subject to a gradual system of sanctions. First, the undertaking concerned will be given the possibility to change its behaviour or end it within a certain deadline. If the undertaking does not comply, the decision establishing the existence of an abuse of significant dominant position will be published in the Belgian Official Journal. Further, if the undertaking still refuses to implement behavioural changes, a fine will be imposed.
It is worth noting that the Draft Bill still has to go through the full parliamentary procedure, which includes discussions and possible amendments to the Draft Bill before it is subject to vote, first in committee and then during a plenary session of the Parliament. This process can be lengthy and it remains to be seen whether it will eventually lead to the adoption and entry into force of the Draft Bill.
