The Belgian Competition Authority (the BCA) announced last week that it has initiated an ex officio investigation into a possible abuse of economic dependence in the agricultural sector, making this the BCA’s first formal probe under this relatively new prohibition.[1]
The prohibition against an abuse of economic dependence was introduced in the competition law section of the Belgian Code of economic law (the BCEL)[2] through the B2B law of 4 April 2019, and entered into force on 22 August 2020.[3] It prohibits undertakings from abusing their non-dominant position vis-à-vis undertakings that are economically dependent on them, whenever this could affect competition in the Belgian market or in a substantial part thereof. It targets similar types of abusive practices as those targeted by the abuse of dominance prohibition (eg, refusal to supply), but instead of applying to undertakings that hold an absolute dominant position, it applies to undertakings holding a relative dominant position vis-à-vis their customers or suppliers. Infringements may be sanctioned with fines of up to 2% of an undertaking’s annual turnover.[4]
Whilst this kind of competition law infringement does not exist at EU level, various other EU Member States (eg, France, Germany and Italy) sanction a similar type of behaviour. The competition authorities in these Member States have increased their enforcement actions against this type of behaviour in recent years. By way of example, the Italian competition authority imposed interim measures on Meta earlier this year in the context of its ongoing investigation into an alleged abuse of economic dependence by Meta against the Italian Authors’ and Publishers’ Association (SIAE).
It is not entirely surprising that the BCA’s investigation focuses on the agricultural sector. Farmers supplying large companies such as supermarkets are often in a weak contractual position. This has been recognised by the Belgian legislator by specifically referring in its preparatory works to the B2B law of 4 April 2019 to the agri-food supply chain as one of the areas for which the new prohibition could be relevant.[5] Moreover, the agri-food industry was listed as one of the sectors that the BCA would focus on in 2023, according to its most recent annual priority note.[6]
The BCA states in its press release that it has been contacted on several occasions over the last three years by companies alleging abuses of economic dependence in their commercial relations, which has allowed the BCA to establish an analytical framework for the assessment of alleged abuses of economic dependence. This analytical framework will be applied by the BCA in the present proceedings. It will be interesting to see what this analytical framework looks like. Currently, the only available insights into how this new prohibition is applied in practice derive from the case law of the national courts: indeed, cases involving alleged abuses of economic dependence have already been extensively litigated before the Belgian courts, often in combination with unfair market practices claims[7], but unfortunately the resultant judgments are not always consistent (eg, the condition that competition in the Belgian market or in a substantial part thereof could be affected by the abusive behaviour is often not analysed). The BCA’s involvement will hopefully contribute to the consistent application and interpretation of the abuse of economic dependence rules.
Footnotes
[1]See https://www.bma-abc.be/sites/default/files/content/download/files/20231128_Persbericht_57_BMA.pdf (in Dutch); https://www.abc-bma.be/sites/default/files/content/download/files/20231128_ComPres_57_ABC_0.pdf (in French).
[2] Article IV.2/1 of the BCEL.
[3] The law of 4 April 2019 amending the Code of economic law concerning an abuse of economic dependence, unfair terms and unfair market practices between companies, Belgian Official Gazette 24 May 2019. See also the law of 27 May 2020 amending the laws of 4 April 2019 amending the Code of Economic Law concerning an abuse of economic dependence, unfair terms and unfair market practices between companies and of 2 May 2019 regarding amendments to book I ‘Definitions’, book XV ‘Enforcement” and replacing book IV ‘Protection of competition’ of the Code of economic law, Belgian Official Gazette 27 May 2020.
[4] Articles IV.79, §2 and IV.80, §2 of the BCEL.
[5] Legislative proposal of 13 November 2015 (R. Gantois) to amend the Economic Law Code regarding the abuse of a significant dominant position, Parl. docs., Chamber 2015-16, nr. 1451/001.
[6] See https://www.bma-abc.be/sites/default/files/content/download/files/2023_prioriteitenbeleid_BMA.pdf (in Dutch); https://www.abc-bma.be/sites/default/files/content/download/files/2023_politique_priorit%C3%A9s_ABC.pdf (in French).
[7] Article VI.104 of the BCEL.
