Short Reads

Belgian Competition Authority confirms that the acquisition by a dominant player of a small competitor is not automatically an abuse of a dominant position

Belgian Competition Authority confirms that the acquisition by a dominant player of a small competitor is not automatically an abuse of a dominant position

Belgian Competition Authority confirms that the acquisition by a dominant player of a small competitor is not automatically an abuse of a dominant position

02.01.2017

On 21 November 2016, the Belgian Competition Authority ("BCA") rejected a request for provisional measures by Alken-Maes ("AM"), the second brewer on the Belgian beer market, against Anheuser-Busch Inbev ("ABI"), the number one player and, according to the provisional decision, the dominant player.

The request pertains to the acquisition by ABI of the Bosteels brewery, which holds a number of important connoisseur beers (‘degustatiebieren’) in its portfolio – chiefly the ‘Karmeliet’ brand. The acquisition remained below the Belgian merger control notification thresholds. However, AM lodged a complaint, claiming that the operation amounted to an abuse of dominant position by ABI (article IV.2 of the Code of Economic Law (CEL)). AM applied for interim measures to suspend the integration of Bosteels into ABI.

The BCA held that the request for provisional measures was admissible, yet unfounded. Referring to the Court of Justice’s Continental Can judgment, the BCA acknowledged that mergers can in principle give rise to an abuse of dominant position. It stressed that the review of such operations is primarily governed by the merger control regime (with its clear timetables), but warned of the possible harmful effects of imposing provisional measures in such context. In light of this, the BCA held that there should be ‘strong indications’ in reaching the conclusion that an acquisition could amount to an abuse of a dominant position, and that this presupposes more specific adverse competition consequences other than the merger effect itself.

Upon closer scrutiny, the BCA found no such prima facie indications. While recognizing the dominant position of ABI on the Belgian on-trade and off-trade beer markets, it noted that the acquisition results in only a very limited increase of ABI’s market share, and only a limited increase in the segment for connoisseur beers. The BCA further examined the arguments of AM that the acquisition would nonetheless amount to an abuse of dominant position because it would (i) make ABI the only brewer with a complete portfolio of significant brands, (ii) prevent competitors from strengthening their position in the connoisseur beer segment, (iii) rob competitors of an ‘infiltration’ weapon, (iv) reinforce the negotiation position of ABI, and (v) result in an increased dependence of (small) brewers in the connoisseur segment on ABI. On the basis of an analysis of various facts, the BCA dismissed each of AM’s arguments. In the end, the BCA concluded there was insufficient evidence of a prima facie breach or of serious and irreparable harm. At the same time, the BCA warned that if ABI were to prevent the sale of competing connoisseur beers from catering businesses linked to ABI, such conduct could at a later stage be tested against articles 101 and 102 TFEU, also having regard to the binding commitments entered into by ABI vis-à-vis the European Commission.

The case on the merits pursuant to the complaint of AM remains pending.

This article was published in the Competition Law Newsletter of January 2017. Other articles in this newsletter:

1. General Court rules on the concept of a single and continuous infringement in the smart card chips cartel case 
2. Envelope maker's cartel fine annulled in first successful European settlement appeal
3. District Court of Limburg rules that damages claims in the Dutch prestressing steel case are time-barred
4. ACM established guiding principles in relation to sustainability arrangements

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