Short Reads

Higher fines ahead under Belgium's new competition act

Higher fines ahead under Belgium's new competition act

Higher fines ahead under Belgium's new competition act

04.07.2019 BE law

Companies beware: on 3 June 2019, a new competition act entered into force in Belgium. The new act introduces a number of modifications to procedure and sanctions, aimed at improving enforcement of competition laws as well as the functioning of competition authorities.

These changes include an increased fining cap, now based on 10% of a company's worldwide turnover, replacing the previous cap which considered only Belgian turnover. In addition, the new act forces companies to substantiate their leniency request with evidence. As a result of these changes, competition law infringements in Belgium may soon result in even more serious financial consequences – all the more reason for companies to double-check whether their existing compliance programmes will be sufficiently effective to detect potential competition law infringements under the new regime.

The most significant modifications in terms of procedure and sanctions in the new competition act include the following:

  • the maximum fine has been increased from 10% of Belgian turnover to 10% of worldwide consolidated turnover
  • clarification of restrictive practices committed by natural persons acting on behalf of companies
  • authorisations for dawn raids will now be the exclusive competence of the investigating judge in Brussels
  • streamlining of the settlement procedure
  • new rules concerning qualification of documents as confidential, both at the level of the competition authorities and at the level of the court of appeal
  • new rules on the composition of the procedural file and removal of documents unrelated to the file
  • two months to respond to the statement of objections, replacing the previous limit of one month
  • in a procedure regarding restrictive practices, the undertakings concerned can offer remedies until three days after the first day of the hearing (which will also lead to an extension of the decisionmaking period)
  • the mere recognition of an infringement is sufficient for a natural person to obtain immunity, but is not sufficient for a company to obtain leniency. Companies will have to submit evidence
  • a request of provisional measures is a “one shot”. The applicant can only submit additional written observations in answer to the submissions of the defendant if the President of the college allows (in which case the defendant has a final possibility to react)
  • provisional measures not mentioned in the request, but envisaged by the competition college, must now be submitted to the undertakings concerned for comments
  • in merger control procedures, parties can submit undertakings at the level of the college (i.e. even after the investigation phase) and can modify the concentration until the end of the oral hearing

Alongside the new act, additional modifications will also be needed to implement the ECN+ Directive of 11 December 2018.

The fundamental material and institutional provisions of the current act remain unaltered. Therefore, Belgium will maintain its prohibition on restrictive practices and abuse of dominant position, as well as merger control, just as before. However, the Belgian Parliament introduced a new kind of restrictive practice - the prohibition on abuse of economic dependence - in a separate act, which is also discussed in this newsletter: please see here.

 

This article was published in the Competition Law Newsletter of July 2019. Other articles in this newsletter:

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