An update on competition law in Belgium

Written on 7 Dec 2016

Dawn raids in the pharmaceutical sector

On 26 November 2016 the Belgian Competition Authority (BCA) conducted various dawn raids within the pharmaceuticals sector. The investigation targeted companies at the wholesale level of the distribution of pharmaceutical and para-pharmaceutical products to pharmacies.

These dawn raids are the result of information received by the BCA relating to alleged cartel activities by wholesalers in relation to the services offered to pharmaceutical companies on the one hand and pharmacies on the hand.

The BCA didn’t provide further details on the case itself, and stresses that the investigation is still ongoing. The duration of the investigation and potential legal proceedings depend on several factors, such as the complexity of the case, the cooperation of the companies under investigation and legal defense arguments.

Another development regarding MFN clauses

In January 2015 the BCA opened investigations against Immoweb, a company operating the most successful real estate website in Belgium. The investigations related to Most Favoured Nation clauses (MFN clause, also known as “Most Favoured Customer” clauses) contained in agreements between Immoweb and developers of software for real estate agencies.

These developers developed software allowing real estate agencies to automatically and immediately place the real estate in their portfolio on online search engines. The website operator then pays these developers an amount per advertisement transferred to its website via the developed software.

If a software developer offered Immoweb’s competitors more beneficial prices, the MFN clauses obliged the software developer to offer the same conditions to Immoweb.

In its preliminary analysis the BCA’s prosecutor established that these MFN clauses prevented Immoweb’s competitors from negotiating lower prices with software developers. This resulted in lost profits for the software developers and increased costs for Immoweb’s competitors, and thus the prosecutor found that competition was hindered.

Following the preliminary analysis, Immoweb committed unilaterally to end these MFN clauses and not to insert any MFN clauses in future contracts with software developers for the next five years. The BCA accepted the commitments and closed the investigation.

Rejection of complaint against AB Inbev’s alleged dominant position

In Belgium, AB Inbev intended to also take over the brewery Bosteels, famous for its Karmeliet bier. Alken-Maes, a competitor of AB Inbev, launched intermediary proceedings before the BMA to prevent the takeover. Even though the Belgian notification treshold of €40million was not met, Alken-Maes claimed that the takeover would fortify the dominant position of AB Inbev and therefore constitute an abuse of dominance by AB Inbev.

The BMA found that takeovers not subject to merger control can only be investigated when competition law infringements are established that are different to the mere effect of the takeover.

After having established the market shares and product market (Karmeliet), the BMA found that there was no concentration effect since AB Inbev was not active in that market prior to the takeover. The BMA did however indicate that it might investigate AB Inbev if it was found to entice its customers not to serve beers competing with Karmeliet.