Insights

On July 2, 2024, the Belgian Competition Authority (BCA) found that three security companies, Seris, G4S and Securitas, had participated in serious cartel practices within the private security services sector from 2008 to 2020. The practices consisted of price-fixing, bid rigging, and no poach agreements. This decision is important for two reasons: because the fines imposed by the BCA amount to a substantial EUR 47 million and because this is the first time that the BCA has fined companies for a no poach arrangement.

At the beginning of the year, we brought to your attention that a number of important Belgian and EU legislative changes are likely to have an impact in 2024: there are new laws that have been adopted and proposals that are expected to firm up into law.

A number of important Belgian and EU legislative changes are likely to have an impact in 2024. On the one hand, there are new laws that have been adopted and will start to bite, and, on the other, there are proposals that are expected to firm up into law.

Businesses distributing goods and services in the EU often rely on the Vertical Block Exemption Regulation (VBER) for legal certainty. The VBER and the accompanying guidelines set out the conditions under which distribution agreements are presumed to comply with EU competition law. To be covered by the VBER, the parties’ market shares may not exceed 30% and the agreement may not include so-called hardcore restrictions. Above the market share threshold, the parties will need to self- assess their agreement based on the guidelines. Over the past few years, the Commission has been working with stakeholders to assess, update and amend the existing rules to take account of market developments, including the emergence of online platforms and e-commerce (see also our Client Alert of August 24, 2021). The most important changes can be summarized as follows:

Businesses distributing goods and services in the EU rely on the Vertical Block Exemption Regulation (VBER) for legal certainty. The VBER and the accompanying guidelines set out the conditions under which distribution agreements are presumed to comply with EU competition law. The current VBER is set to expire on May 31, 2022. Over the past few years, the Commission has been working with stakeholders to assess, update and amend the existing rules to take account of market developments, including the emergence of online platforms and e-commerce (see also our Client Alert of October 26, 2020). The most important changes proposed by the Commission can be summarized as follows:

On June 29, 2021, our annual EU Competition Law Conference took place (virtually this year), co-hosted by Crowell & Moring and King’s College London. During a panel discussion followed by a fireside chat, the speakers discussed how proposed and existing reforms in competition law across the globe are being or can be practically implemented. A video recording of the panel discussion and fireside chat is available here.

Caudalie operates a selective distribution network for the sale of cosmetic products. To protect its luxury image, Caudalie included certain restrictive clauses in its distribution agreements. For example, the distributors were prevented from applying labels to the front of the products and from using words such as “discount” or “reduced prices” on posters. In addition, distributors were only permitted to expand sales into other countries with the written consent of Caudalie. In principle, the agreements did allow Caudalie’s distributors to set the retail price of the products; Caudalie provided only a recommended resale price.

On January 28, 2021, the European Commission adopted its Fifth Amendment to the Temporary Framework for COVID-19 state aid measures. The Temporary Framework enables the EU Member States to support companies affected by the COVID-19 outbreak and subsidize coronavirus related R&D and production. As of February 1, 2021, the Commission has adopted about 400 COVID-19 state aid decisions approving national support mechanisms for a total value exceeding €3 trillion.

On October 23, 2020, the European Commission published its impact assessment providing its plans for the reform of the Vertical Block Exemption Regulation (VBER) and Vertical Guidelines. A number of impactful changes to the current rules are envisaged in relation to dual distribution, active sales restrictions, online sales restrictions, and Most Favored Nation clauses (MFNs). Moreover, the Commission will provide additional guidance on the circumstances in which Resale Price Maintenance (RPM) and non-compete obligations are permitted.

On May 11, 2016, the European Commission prohibited the proposed acquisition of Telefónica UK (O2) by Hutchison 3G UK (Three). The transaction would have been a 4:3 merger involving the number 2 and number 4 U.K. mobile network operators. The merged entity would have had a non-dominant share of around 40% and network sharing arrangements with both its remaining competitors (BT/EE and Vodafone). The Commission’s decision was based, in particular, on the elimination of Three as “an important competitive force” that offered the most competitive prices in certain market segments and 4G at no extra cost. The Commission made no finding of coordinated effects.

Given the major impact of COVID-19 on the European economy, a reaction from the European Commission on the state aid front was expected. On March 19, the European Commission adopted a Temporary Framework to enable Member States to support the economy in the COVID-19 outbreak. These measures complement many other possibilities under the existing state aid rules as outlined by the Commission in its Communication on a coordinated economic response to the COVID-19 outbreak. To date the Commission already approved over fifty state aid measures in almost every Member State in record time.

On March 19, the European Commission adopted a Temporary Framework to enable Member States to use the full flexibility of the State aid rules to support the economy in the COVID-19 outbreak. Since then the Commission has approved over €890 billion in aid schemes most of which were processed within 24 to 48 hours. On April 3, the Commission extended the Temporary Framework to enable Member States to accelerate the research, testing and production of COVID-19 products, to protect jobs and to further support the economy in the outbreak.

We previously reported on the joint statement the European Competition Network (ECN) issued on March 23 regarding the application of the competition rules during the COVID-19 crisis, as well as several initiatives taken by national competition authorities. Since then, the European Commission and other European competition authorities have not been resting on their laurels.

The European Commission encourages companies to delay merger notifications originally planned until further notice, where possible. The Commission expects delays in the collection of information from third parties, such as customers, competitors and suppliers. In addition, Commission officials may face some challenges accessing information as they are working remotely as of March 16, 2020. The Commission reportedly suspended three Phase II merger investigations due to companies failing to comply with information deadlines.

On March 23, the European Competition Network (ECN) issued a joint statement on the application of competition law during the coronavirus crisis. The ECN understands that this extraordinary situation may trigger the need for companies to cooperate in order to ensure the supply and fair distribution of scarce products to all consumers. In the current circumstances, the ECN will not actively intervene against necessary and temporary measures put in place in order to avoid a shortage of supply.

The Guidelines were mandated by the EU Damages Directive, which required the EC to issue “clear, simple and comprehensive” guidance to national courts (a challenge with which the EC has struggled over 52 dense and technical pages).

Following a complaint filed in 2009 by a Portuguese cable company, Cabovisao, the Portuguese Competition Authority found in June 2013 that discriminatory pricing by Sport TV, a provider of premium sports TV channels, constituted an abuse of dominance contrary to Article 102 TFEU and national law. On February 27, 2015, Cogeco, a shareholder of Cabovisao which had distributed Sport TV, filed a claim for damages. Sport TV argued that Cogeco’s claim was statute barred.

The case relates to a cartel that took place in the Finnish asphalt market between 1994 and 2002. A number of the companies that participated in the cartel were acquired, during or after the cartel period. The acquirers liquidated the legal entities involved in the cartel and absorbed their assets and activities. The Finnish competition authority subsequently fined the acquirers, relying on the established principle of ‘economic continuity’ under EU fining rules – that if an infringing company ceases to exist and its activities have been acquired by another entity, liability for fines transfers to the acquirer.

Facebook collects user data not just from activity on its own website but also from a variety of other sources. These sources include on the one hand other Facebook-owned services, such as Instagram and WhatsApp, and on the other hand third-party websites which contain a “like” or “share” button, irrespective of whether the user clicks on or scrolls over the button. Moreover, Facebook even collects data from websites which do not carry any reference to Facebook, but use for example the “Facebook Analytics” service.