The Belgian government has submitted to Parliament a bill introducing significant amendments to the Competition Act. The amended Competition Act will be included in the new Code of Business and Economic Law (Wetboek van economisch recht/Code de droit économique).
Amongst other things, the bill reforms the Belgian Competition Authority. The objectives of the proposed reform are twofold: on the one hand, to simplify the Competition Authority's structure and, on the other hand, to introduce faster and more efficient procedures. For instance, the bill provides for a settlement procedure for competition law violations and the possibility to appeal investigative measures. It also allows the Competition Authority to impose administrative fines on natural persons. Finally, the bill grants new powers to the Competition Authority in relation to price intervention.
New structure of the Competition Authority
The bill proposes merging the Competition Authority into a single, independent administrative body, composed of an investigative arm and a decision-taking arm. The reformed Competition Authority will be similar to the French Autorité de la Concurrence.
The new Competition Authority will be led by a president, assisted by a management committee which will determine enforcement priorities and general policy. The management committee will be composed of the president, the competition prosecutor-general, the chief economist and the head of legal affairs.
The College of Competition Prosecutors (Auditoraat/Auditorat) will oversee the investigative phase: it will decide whether to open an investigation, conduct the investigation and draft a preliminary decision. This body will be headed by the competition prosecutor-general.
The final decision will be taken by the Competition College (Mededingingscollege/Collège de la Concurrence), formerly the Competition Council (Raad voor de Mededinging/Counseil de la Concurrence). The Competition College is an administrative body. Decisions of the Competition College can be appealed to the Brussels Court of Appeal. In accordance with the European Court of Justice's Vebic ruling (ECJ, 7 December 2010, C-439/08), the Competition College will be able to defend its decisions before the Brussels Court of Appeal.
Procedures before the Competition Authority
Under the new procedure, undertakings concerned will receive the statement of objections during the investigative phase and will be able to present documents and information in their defence. The College of Competition Prosecutors will no longer submit a report but rather a preliminary decision to the Competition College. This non-binding preliminary decision will then be discussed before the Competition College. As is currently the case, the undertakings concerned will be able to submit written observations and will be given an opportunity to be heard.
Interim measures
The procedure for interim measures will also be reformed. The new procedure should allow the Competition Authority to take a decision within two months from receipt of a request for interim measures.
Settlement procedure
The Competition Authority, following in the footsteps of the European Commission, will be able to opt for an expedited settlement procedure, in which the undertakings concerned acknowledge their violation(s) of competition law and agree to pay a fine.
Appeal of investigative measures
Another important amendment is the possibility for undertakings to contest investigative measures by the College of Competition Prosecutors. In a separate appeal following issuance of the statement of objections, undertakings under investigation will be able to object to the Brussels Court of Appeal the inclusion in the preliminary decision of evidence obtained during inspections by the College of Competition Prosecutors.
Administrative fines on natural persons
The bill allows the Competition Authority to impose administrative fines on natural persons for competition law violations. More specifically, natural persons that took part in a cartel on behalf of an undertaking or an association of undertakings and that participated in so-called hard-core cartel practices, such as price fixing and market sharing, can be fined. On the other hand, fines cannot be imposed on natural persons merely for abuse of dominance. It is expected that fining natural persons will enhance the deterrent effect of the competition law rules. Currently, the Competition Authority can only fine legal entities.
Price monitoring and intervention
The Competition Authority is granted new powers in relation to price monitoring. Pursuant to the bill, the Price Monitoring Authority (Prijzenobservatorium/Observatoire des prix), which forms part of the Ministry of Economic Affairs, will report to the Competition Authority on structural market problems, dysfunctions in pricing levels or margins, and abnormal price fluctuations. Subsequently, the Competition Authority can, after having heard the parties, order interim measures, e.g. impose maximum prices, for a period of up to six months. The parties can appeal interim measures to the competent appellate court.
This aspect of the bill is highly controversial as it would reintroduce state intervention in pricing levels and margins and goes against the general principle that prices should be freely determined by market forces.
Parliament will now discuss, and possibly amend, the bill.
