1. Introduction
On 24 February 2022, the Belgian Chamber of Representatives approved a modification of Belgian competition law resulting in part from the transposition of EU Directive 2019/1 to empower the competition authorities of the Member States to be more effective enforcers and to ensure the proper functioning of the internal market, the so-called ECN+ Directive. The adopted law includes changes to both the Belgian Code of Economic Law (“CEL”) and the Criminal Code.
The deadline to transpose this Directive passed 4 February 2021 and Belgium is one of the last countries to transpose the rules contained in the Directive. Therefore, it is expected that the changes will enter into force relatively quick. We will keep you up to date of its entry into force.
In this Newsflash we set out the most important changes, which will have an immediate effect on companies and individuals when getting in contact with competition law.
2. Mos timportant changes
Filing fees for the notification of a concentration
One of the ways in which companies are most likely to encounter competition law are the merger control tasks assigned to the Belgian Competition Authority (“BCA”). In this respect, the legislator introduced an important change, namely the imposition of filing fees to be paid by undertakings when notifying a concentration.
The new Article IV.10 CEL determines that undertakings notifying a concentration need to pay a flat fee of EUR 17 450 for a concentration notified according to the simplified procedure and EUR 52 350 for notifications following the normal procedure. A fee which will be indexed automatically.
The fee needs to be paid by the notifying parties, which will be the acquirer in case of an acquisition, all the merger parties in case of a merger and the parent companies in case of a joint venture. If there is more than one notifying party the fee will be divided equally.
Interestingly, the fee will be collected by the FPS Finance and will go to the general federal budget. In other words, the fees will not directly compensate for the administrative costs related to the notification process (although the BCA will indirectly receive a significant part of those fees).
Expansion of the legal basis of the leniency programme
Until now the leniency programme of the BCA has been mainly regulated through (informal) leniency guidelines. The only substantive provision concerning the leniency procedure was Article IV.54 CEL. This provision is now replaced by a separate subsection of Book IV containing seven separate articles (Art. IV.54 – Art. IV.54/6 CEL), thereby expanding the legal basis of the BCA’s leniency programme. These new provisions set out the conditions and procedure in respect of: (i) immunity/leniency applications; (ii) marker requests; (iii) summary applications; and (iv) immunity applications for natural persons. Those articles consist mainly in a copy/paste of the current leniency guidelines, except for practical details such as the relationship between the BCA and the external legal counsels of the leniency applicant.
Firstly, Article IV.54 CEL now explicitly determines the conditions that need to be fulfilled for an undertaking to receive full immunity or partial immunity from fines. Besides the type of information and evidence an undertaking needs to communicate to the BCA, it is now also explicitly determined that an undertaking should inform the authority of its participation in the cartel and contribute to the identification of the other participants. These last conditions were previously only indirectly included in the leniency guidelines, since leniency applicants had to provide information concerning the identity of other participants in their marker and/or leniency application. Now they have become formal conditions for being awarded immunity or leniency from fines. Additionally, also the cooperation duty of a leniency applicant has now explicitly been included in the law.
Secondly, Art. IV.54/1 CEL now explicitly includes the procedure for obtaining a marker, whereby it copied heading V2.3 of the existing leniency guidelines concerning the procedure and conditions for requesting a marker, but not the option for an undertaking to inquire anonymously through the intervention of a lawyer whether the full immunity from fines is still available (paragraph 33 of the leniency guidelines).
Thirdly, Article IV.54/2 CEL specifies the rules regarding summary leniency applications following the submission of a leniency application (or marker) to the European Commission. These rules differ from the provisions included in the existing leniency guidelines, due to the amendments brought by the ECN+ Directive. Summary leniency applications are now only possible when an undertaking (i) has actually submitted a marker or leniency application to the Commission and (ii) the application covers more than three Member States as affected territories. It is no longer possible to submit a summary application when the leniency application has not yet been submitted to the Commission. Moreover, the condition of three affected Member States is new. Finally, with regards to the leniency programme, Article IV.92 also simplifies the rules on the use of languages for all types of leniency declarations (markers, summary applications, leniency declarations, etc.). These documents no longer need to be either in Dutch or in French depending on the seat of the applicant in Belgium, they can now be in Dutch, French or German or even any other EU language on the condition that this has been pre-agreed with the auditor.
Immunity for bid rigging under criminal law
In general, competition infractions are not covered by criminal law. The only notable exception in Belgium is bid rigging, i.e., the practice of coordination between undertakings in relation to public tenders/public procurement. This is not only an infraction of competition law but is also a criminal offence based on Article 314 of the Criminal Code.
The legislator now included an option for natural persons to also obtain criminal immunity on the condition that: (i) they submit a request for immunity of prosecution with the BCA; and (ii) they provide the Criminal Prosecutor’s Office with all available information concerning the offence and the other participants. This last condition can be fulfilled by submitting the request for immunity of prosecution, as prepared for the BCA, to the Criminal Prosecutor’s Office. Moreover, in case such criminal immunity is requested the Criminal Prosecutor’s Office needs to inform the BCA.
The addition of criminal immunity is the result of the implementation of Article 23, 2nd paragraph of the ECN+ Directive, which imposes a duty on Member States to ensure that the (former) personnel of leniency applicants should also be protected from sanctions in criminal proceedings if the applicants cooperate. In Belgium, however, the BCA is not competent with regards to criminal prosecution. Therefore, a modification of the
Belgian Criminal Code was necessary.
Previously, such immunity did not officially exist, but in practice, the BCA did not inform nor cooperate with the Criminal Prosecutor in case public procurement bid rigging had been subject to a cartel leniency application. The reason for the BCA not to cooperate was to preserve the effectiveness of the leniency programme by strictly adhering to the confidentiality principle. Moreover, bid rigging cases (until now) have not been a priority of the Criminal Prosecutor, especially when they were already subject to an administrative investigation, due to the possible ne bis in idem defence, which excludes someone being punished twice for the same “crime”. This lack of complementarity between the competition law procedure and the criminal procedure due to the absence of cooperation between the two bodies made it easier to raise the ne bis in idem defence.1
This new possibility to obtain criminal immunity offers additional legal certainty to (former) employees of leniency applicants, without substantially increasing the burden of cooperation. Although there may have been legal hurdles, we consider that it would have been more efficient for the BCA to act as a one-stop-shop vis-à- vis the Criminal Prosecutor’s Office. Indeed, it may be psychologically more difficult to apply for leniency if one knows that one has to disclose all evidence related to an infringement directly to the Criminal Prosecutor’s Office. Nevertheless, this new feature is worth considering in every bid rigging case.
Other changes
The legislator also made use of the opportunity to expand the definitions applicable to Book IV CEL, the competition law chapter, and Book XVII CEL concerning damages actions for competition infringements. The new definitions, included in Art. I.6 CEL, are copied either from the ECN+ Directive or from the existing leniency guidelines of the BCA. There are two exceptions. First, the use of amicable resolutions of disputes (33°) and out-of-court settlements (34°) is not meant to create a new procedure before the BCA in competition cases (especially in light of the already existing settlement procedures). The provisions are in the first place directed towards the settlement of damages claims related to competition law infringements. Secondly, the legislator decided to retain the existing definition of undertaking (°12), namely “any natural or legal person who pursues an economic goal on a long-term basis, as well as its associations”. The definition used in European competition law and defined in the ECN+ Directive as “any entity engaged in an economic activity, regardless of its legal status and the way in which it is financed” has not been taken over. Even though the definition at first sight seems narrower, it is expected that this will not have any influence in practice and that the BCA will apply the broad EU concept of undertaking.
A last change we would like to focus on are the modifications of the rules regarding fines and periodic penalty payments included in Article IV.82 CEL. In addition to the fines of maximum 1% of the turnover which can be imposed when undertakings (i) provide incorrect or incomplete information; (ii) do not provide information within the set deadline or (iii) hinder the investigation, these fines can now also be imposed when the required people fail to appear for a hearing and when an undertaking implemented a concentration without notifying it to the BCA. Moreover, the BCA can now also impose daily penalty payments of maximum 1% of the daily turnover per day of delay when ordered (among others) to submit to investigative measures, to appear for a hearing or to notify a concentration. Finally, the rules regarding the turnover to be taken into account to calculate fines and the collection of the fine has been clarified for associations of undertakings, because this led to some uncertainty in practice.
3. Conclusion
The transposition of the ECN+ Directive brings about several important changes to Belgian Competition law, which will have significant consequences for companies (filing fees, additional periodic penalty payments, etc.) and for individuals (criminal immunity for bid rigging). This is even further reinforced due to the increased cooperation between European national competition authorities and with the European Commission as envisaged by the Directive. Therefore, it is even more important for every business active in Belgium to be aware of competition law and the potentially significant consequences of infringing these rules.
1See for instance, Judgment of 15 November 2016 of the European Court of Human Rights, A and B v Norway.
Pierre Goffinet - Partner - pierre.goffinet@strelia.com
Pauline Van Sande - Associate - pauline.vansande@strelia.com
