After some delay (the entry into force was initially foreseen for 1 June 2020), the long-anticipated and much-debated prohibition on abuse of economic dependence will finally enter into force on 22 August 2020.
The new Article IV.2/1 of the Belgian Code of Economic Law prohibits undertakings from abusing a position of economic dependence in circumstances where competition is likely to be affected on the Belgian market or a substantial part thereof.
Economic dependence is defined as a position of subordination of one undertaking vis-à-vis one or more other undertakings characterized by:
- a lack of reasonable and equivalent alternative available within a reasonable time period and under reasonable conditions and costs, and
- the possibility for an undertaking to impose terms and conditions that could not be obtained under normal market conditions.
Abuses in scope are for example refusing to deal, imposing unfair contract terms, imposing output limitations, discrimination and abusive tying.
An abuse of economic dependence can be sanctioned by the Belgian Competition Authority (“BCA”), which can impose a fine of up to 2% of the undertaking’s Belgian turnover. Undertakings facing such an abuse can also bring their claim before a judicial court, for example via a cease-and-desist request.
Besides the difficulties that may come with the substantive test, a great amount of uncertainty remains with regard to the intertemporal application of the new rules. It is clear that they will apply to abuses occurring as of 22 August 2020. Lacking explicit transition provisions, however, the question arises whether one should also look over the shoulder for abusive practices from the past. In principle, the new rules should not apply to any practices that occurred and were terminated before the entry into force (22 Augustus 2020). However, it is likely that past practices that are being continued after 22 August 2020 do come into scope or can at least be taken into consideration to find an abuse. This obviously gives rise to complex questions, such as when a certain practice is to be considered a continuing act as opposed to a one-off event.
As the legislator did not deem it necessary to anticipate these complexities, undertakings will have to rely on the general rules of transition law, which do not exactly excel in clarity. No doubt, the BCA and the courts will have to provide further guidance.
