The Belgian Competition Authority publishes its opinion on enforcement priorities for 2022 | McDermott Will & Emery


Presentation

The advisory begins by referring to the impact of the COVID-19 pandemic, rising energy prices and the Russian invasion of Ukraine. The BCA notes that the latter has caused an even greater increase in energy prices given that Russia is a major energy supplier, and that the invasion has resulted in a curb on the supply of raw materials. and intermediate goods as well as on the export activities of Belgian companies to the two countries. The notice stresses that these events can significantly influence certain sectors, such as the food, construction and industrial sectors which are highly dependent on the international supply of raw materials (including certain metals and minerals ). The BCA explains that a “sound and fair market” provides the best protection for overall economic prosperity both in sectors experiencing severe difficulties and in sectors where new opportunities have arisen due to this new economic reality.

Strategic priorities for 2022

Before setting out its “strategic priorities”, the ABC recalls and summarizes the recent amendments made to the Belgian Code of Economic Law (CEL) and the Belgian Criminal Code in March 2022 (for more information on these amendments, see our article here).

The 20% increase in the BCA budget will be used to recruit staff and invest in (1) new IT infrastructure and support, (2) knowledge management and internal processes, and more specifically enforcement available (such as surveys, , anonymous whistleblower tools, etc.).

The ABC will set up a special “merger control team” in the future, which the ABC says will lead to more efficient handling of merger notifications and an increased ability to deal with investigations of anti-competitive practices ( based on ex officio surveys). The opinion also explains that there will be a further strengthening of expertise regarding the implementation of the law on economic dependence (enshrined in the CEL).

The increase in the BCA budget will also allow the BCA to be more active in relation to its informal and strategic policy – and in particular it will lead to an increase / strengthening of already existing collaborations with ECN working groups and national regulators and international. As an example of collaborations with national regulators, the BCA refers to the Price Observatory and the National Bank of Belgium.

Another strategic priority for the BCA will be the sectors positively or negatively impacted by the COVID-19 crisis, in particular where the impact is reinforced by the increased digitization of society. The BCA explicitly refers to:

– Distribution markets
– The agri-food value chain
– Financial services
– Health (including distribution of medicines, vaccines and medical equipment)

The BCA explains that competition drives innovation which, in turn, is needed to develop new green technologies. According to the Communication, healthy competition encourages businesses to use scarce raw materials and resources efficiently and ensures that new, innovative products are offered to consumers at affordable prices. A sound and effective competition policy is therefore an important factor in promoting innovation and technological development in order to contribute to the continued greening of the Belgian economy. In line with initiatives from other Member States, the BCA will also take further steps to develop its position on, inter alia, how the competition rules correspond to sustainable policy measures and how it can further support this policy, by particularly with regard to the application of competition law to sustainable development agreements. To this end, the BCA will also provide additional informal guidance and engage with various stakeholders as part of its advocacy policy.

Thanks to an increase in its budget, the BCA now also has more resources to “address new challenges”, such as competition in labor markets. This follows a trend observed in other EU countries in recent years. For example, in Hungary, France and Portugal, national competition law authorities have investigated so-called wage-fixing and/or “non-poaching” agreements (that is to say where companies undertake not to hire each other’s employees).

The European Commission has not yet taken any enforcement action against the non-poaching agreements. However, in a speech on October 22, 2021, the European Commissioner for Competition, Margrethe Vestager, spoke of the harm caused “when companies agree to set the wages they pay; or when they use so-called “no poaching” agreements as an indirect means of keeping wages low, preventing talent from moving to where it best serves the economywhich implies that the European Commission will not hesitate to take coercive measures in this area.

Non-poaching agreements have already been a hot topic in the United States for several years. One of the latest developments is the antitrust case brought against DaVita and its former CEO, which was the first “non-poaching” criminal lawsuit ever pursued by the DOJ. McDermott successfully represented DaVita and its former CEO in this case (for more information see here and here).

  • Recruitment, specialization & collaboration
  • Sectors impacted by the COVID-19 crisis
  • Focus on the application of competition policy in the pursuit of a green and circular economy in Belgium
  • Competition in labor markets

Priority sectors for 2022

The BCA has identified the following sectors as a “priority” for 2022:

The sports sector – new to the list. The BCA points to the fact that the sports sector has become an important economic sector and refers to its previous application practice in the industry. In the future, the BCA, based on the expertise already acquired, will pay greater attention to the application of competition rules in the sports sector, focusing on fair access to sports leagues, l organization of sporting competitions and events, the banning of poaching deals and the rise of e-sports and (online) sports betting.

  • Business and consumer services – and especially where the sector is regulated (eg financial services, accounting, quality control). This is in line with BCA’s 2021 priorities.
  • The pharmaceutical sector – in line with other EU countries’ emphasis on law enforcement in recent years as well as the ABC’s own priorities for 2021. In the Opinion, the ABC discusses its latest actions in the sector and stresses that it will “pay attention” to all the players in the value chain: the prices set by laboratories, competition between wholesalers and distributors, innovation and competitive dynamics at the level of pharmacies, etc. .
  • The digitization of the economy – also in line with the ABC’s 2021 priorities and where the ABC will be “particularly vigilant” to possible abuses of dominant position, abuse of economic dependence and infringements of competition law resulting from the digital transformation in several sectors ( particularly in the service industry, including services to businesses and government agencies). The sectors characterized by increased digitization are, according to the ABC, media and communication, with new developments in both content and advertising.
  • The agro-food sector – new in the list. The BCA refers to the fact that the Belgian food chain has already demonstrated, at different levels, its vulnerability in maintaining a healthy competitive environment. In particular, the BCA refers to an upward trend in food price inflation that is higher than in all neighboring countries.

    The BCA will focus on sound market forces along the food chain, and will focus in particular on pricing mechanisms, territorial supply restrictions as well as competitive dynamics in the agricultural sector.

  • The energy sector – also in line with the BCA’s 2021 priorities. Regarding the energy sector, the BCA refers again to the increase in energy prices (especially for electricity and gas) caused by the economic recovery after the COVID-19 crisis in combination with declining gas reserves and an increase in the price of CO2 rights, further exacerbated by the consequences of the Russian invasion of Ukraine. Given the importance of energy for businesses, the BCA explains that it will ensure that, particularly in the current context of a partial phase-out of nuclear energy, gas and electricity suppliers do not benefit not from the tense situation to pursue anti-competitive policies. To this end, the ABC is in close contact with the CREG, the federal energy regulator in Belgium, as well as with the regional regulators. “Necessary care” is required to prevent energy companies from making windfall profits during periods of price spikes (referred to as “windfall profits”).
  • The telecom sector – a “classic” priority for the BCA. In this year’s notice, the BCA explains that consumers are increasingly opting for bundled offers and are less likely to switch operators. Other points of attention for the BCA are (1) the continued deployment of the 5G network, (2) further consolidations in the telecommunications market (which will come under scrutiny), (3) increased interactions and the ripple effect between the digital sector and the telecommunications sector, also paying attention to the competitive effects of vertical and conglomerate mergers linking the two sectors.
Previous China has built the world's largest 5G network with 1.6 million stations
Next Tramspread contractor trailer launched - thatsfarming.com