Anti-competitive agreements

Anti-competitive agreements and abuse of a dominant position

1. The European Commission has set itself the task of ensuring that no agreements are made between companies that would restrict competition or abuse of a dominant position, which would also adversely affect the free movement of services and the competitive opportunities.

This is therefore included in both European and our federal legislation.

The Belgian competition authority is a separate administrative entity, which has an important active role in this, and to which complaints can be lodged on grounds of cartel formation or abuse of a dominant position.

They are not responsible for unfair commercial practices by companies towards consumers or between companies (eg misleading advertising about the properties of a product or about the pricing, about the quality, about the qualities of a company, etc.).

In addition, a procedure can be instituted with the option of requesting compensation before the Commercial Court (later Enterprise Court).

2. In order to act against anti-competitive acts, there are very important barriers before you can take action.

For example, contracts must control at least 30% [SS1]of the relevant market.

In practice, discussions are then held in court about non-compete clauses (eg a spatial scope, the exclusion of members of a business or professional association).

The anti-competitive arrangements are examined both in vertical agreements (eg importer and distributor) and in horizontal agreements (two competitors).

For example, an insurance agent who, for example, disregards a contractual prohibition to act on behalf of other insurers and is held responsible for this, may, if necessary, argue that this clause is anti-competitive (ie the exclusivity clause).

A distribution system that imposes conditions that have nothing to do with the distribution can also be challenged on the same basis.

3. In the case of abuse of a dominant position, it must first be determined whether there is a sufficient market share (a market share of 50% is a presumption, between 50% and 30% more an indication of this and that should be further investigated).

There must then be abuse of that dominant position and in practice this often has to do with the exclusion or exploitation of companies.

This usually has to do with price setting (either too high or applying predatory prices). Attention, the fact of low prices is in itself insufficient to act.

The company must have the intention to eliminate the competitor, which is suspected when the prices applied are lower than the average variable costs.

Predatory pricing also often occurs for companies that are vertically integrated (i.e. they also have representatives at the wholesale level and then the wholesale prices are such that the company can no longer trade profitably in the retail market).

Contract or sales refusals towards certain traders can also be wrong if a dominant position is abused (e.g. a supplier has no interest in it, such a sales refusal is therefore unreasonable in the absence of interest or when it is arbitrary).

Some companies may also have acquired essential facilities (eg having a database). Arbitrary refusal to make these essential facilities available could therefore be combated in certain circumstances.

In summary, it can be concluded that the protection options exist at two levels.

4. For small companies based on the law on fair trade practices (between companies) and with regard to more important companies which already have a certain market size or monopoly, under Belgian and European competition law concerning competition.

An example could be that a company receives illegal state aid (such as wage subsidies above the aid threshold of €10 million/year for the employment of employees with disabilities), so that an injunction claim can be brought by an interested party.[2]