The decisions of the Competition Council that have been published in the Belgian Official Journal between 19 November 2010 and 18 December 2010 are listed in the Annex to this Newsletter.
European Court of Justice Adopts Preliminary Ruling in VEBIC Case about Right of Competition Council to Participate in Appeal
In a judgment of 7 December 2010, the European Court of Justice adopted a preliminary ruling in the VEBIC case relating to the right of the Competition Council to participate in appeals against its own decisions.
In the VEBIC case, the Competition Council imposed a fine of € 29,121 on VEBIC, the Flemish Bakers' Association, for having fixed prices of bread (See, this Newsletter, Volume 2008, No. 2). VEBIC subsequently lodged an appeal against this decision before the Brussels Court of Appeal. In accordance with the Belgian Competition Act, the Competition Council itself was not a party to these appellate proceedings. This led the Brussels Court of Appeal to make a preliminary reference to the European Court of Justice, asking in essence whether a national competition authority is entitled, by virtue of EU Regulation 1/2003, to participate – as a defendant or respondent – in appellate proceedings against its own decisions (See, this Newsletter, Volume 2008, No. 9).
In its recent response to this preliminary reference, the European Court of Justice noted that, according to EU Regulation 1/2003, national competition authorities must ensure that the EU competition rules (Articles 101 and 102 TFEU) are applied effectively in the general interest. The Court then held that this pre-supposes that a national competition authority is entitled to participate in appellate proceedings against its own decisions. The Court therefore concluded that EU Regulation 1/2003 should be interpreted as precluding national rules, which do not allow a national competition authority to participate, as a defendant or respondent, in judicial proceedings brought against a decision that the authority itself has taken. The Court also clarified that it is for the national competition authorities to gauge the extent to which their intervention is necessary and useful, having regard to the effective application of EU competition law.
Belgian Competition Council Amends Condition Imposed on Telenet's Acquisition of Canal+
In a decision of 29 November 2010, the Belgian Competition Council amended a condition that was imposed in 2003 on cable network operator Telenet's acquisition of pay-TV provider Canal+. The condition in question essentially required Telenet to offer its pay-TV content to competing network operators under certain conditions. This condition was intended to prevent foreclosure of competing network operators.
On 25 March 2008, the Competition Council had already granted a request by Telenet to amend this condition in such a way that Telenet would no longer be required to offer competing network operators Telenet's TV broadcasting rights for the upcoming Belgian football seasons (See, this Newsletter, Volume 2008, No. 4). However, on 22 June 2009, this decision was annulled on appeal by the Brussels Court of Appeal. In particular, the Court held that the Competition Council failed to properly examine whether Telenet's possible acquisition of exclusive football TV broadcasting rights would, in the absence of the must-offer condition, create or strengthen Telenet's dominant position.
Following this judgment, Telenet made a new request to the Competition Council to review the condition in question. Following an investigation by the College of Competition Prosecutors and after hearing interested third parties, the Competition Council has again amended this condition in its decision of 29 November 2010, this time requiring Telenet to offer its football TV broadcasting rights to competing network operators only insofar as Telenet acquires all live TV broadcasting rights for the Belgian football competition at the upcoming auction for these rights. While acknowledging that the broadcasting markets are clearly in full evolution, the Competition Council found that there were not yet sufficient reasons to simply abolish the condition imposed on Telenet in 2003. According to the Competition Council, because of the strong position of Telenet on the television market in Flanders and the substantial value that the football broadcasting rights continue to have on the market, potential exclusionary effects may still occur should Telenet obtain the live broadcasting rights exclusively.
College of Prosecutors in Competition Matters Requests European Commission to Refer GDF Suez Acquisition of International Power to Belgian Competition Authorities
On 29 November 2010, GDF Suez notified its acquisition of International Power (the "Acquisition") to the European Commission (the "Commission"). The Acquisition will cause GDF Suez to acquire of a controlling share of 33.3% in T-Power, which will operate a 420 MW combined cycle gas turbine whose start of commercial operation is planned fro June 2011. On the basis of an agreement between T-Power and Essent, the production of T-Power's steam and gas turbine will exclusively be sold to Essent. As a result of the Acquisition, GDF Suez will now become the operator of T-Power's steam and gas turbine.
In the view of the College of Prosecutors in Competition Matters (Auditoraat / Auditorat), the Acquisition will have important consequences for the competition on several electricity markets in Belgium. On the basis of a preliminary examination of the Acquisition, it appears that the Acquisition may further strengthen the dominant position of GDF Suez on the Belgian market for the production, wholesale and trading of electricity as well as on the Belgian market for balancing and other supporting services. Therefore, pursuant to Article 9.2 of Regulation No 139/2004 of 20 January 2004 on the control of concentrations between undertakings, the College of Prosecutors in Competition Matters requested the Commission to refer the examination of the Acquisition to the Belgian competition authorities insofar as it affects the Belgian electricity market.
The Commission now has to decide whether it will deal with the Acquisition alone or whether it will refer part of the Acquisition to the Belgian competition authorities. In 2009, the College of Prosecutors in Competition Matters also requested that the European Commission refer the review of the planned acquisition by French electricity company EDF of SPE, a Belgian electricity provider, to the Belgian Competition Council. The Commission however dismissed this request (See, This Newsletter, Volume 2009, No. 11).
College of Prosecutors in Competition matters Adopts Reasoned Report in Flour Cartel Investigation
On 23 December 2010, the College of Prosecutors in Competition Matters adopted a reasoned report (the "Report") relating to an investigation into restrictive practices on the market for the sale and delivery of flour in Belgium. The investigation was initiated following serious indications of a possible infringement of the Belgian Competition Law and, in 2008, caused the Belgian competition authorities to carry out a dawn raid on the premises of the biggest flour producers.
In the Report, the College of Prosecutors in Competition Matters alleges that the flour producers at issue infringed the Competition Law by exchanging sensitive information and by making bilateral and multilateral agreements to coordinate price increases and achieve customer allocation. The firms will now be given the opportunity to defend themselves against these charges.
The Report follows on the heels of a decision of the Dutch Competition Authority (Nederlandse Mededingingsautoriteit) to impose fines amounting to EUR 81.6 million on flour producers in Belgium, Germany and The Netherlands. The Dutch Competition Authority found that fifteen firms had concluded agreements which restricted competition on the market for the sale and supply of flour in The Netherlands. The Belgian companies fined by the Dutch Competition Authority are Dossche (EUR 22.8 million), Ceres (EUR 12.9 million) and Brabomills (EUR 4.6 million). The Dutch Competition Authority indicated that, throughout the investigation, it cooperated closely with other European competition authorities.
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