In a remarkable judgment of 22 June 2018, the Belgian Supreme Court confirmed an earlier Brussels Court of Appeal judgment that stated that joint lobbying activities did not infringe competition laws. With these judgments, the Belgian Supreme Court and the Brussels Court of Appeal overruled the Belgian Competition Authority’s (“BCA”) decision.

This blog article summarises first, the opposing views by, on the one hand, the BCA and on the other hand, the Court of Appeal and the Supreme Court. Second, it briefly explains the facts of this case and third, the BCA’s decision. Finally, it discusses the judgments of the Court of Appeal and the Supreme Court.

Opposing views

The Belgian Supreme Court stated in its judgment that: “the Court of appeal excluded the presence of restrictive competition practices, since the concertation between the parties had as an object lobbying activities in the institutionalised framework of public standardisation and certification bodies to which they were expressly invited to defend their interests and that nothing establishes that the concertation went beyond this object in view of influencing the procedure of standardisation and certification itself”.

Consequently, the Belgian Supreme Court confirmed the Court of Appeal’s judgment in this case, whereas the BCA had originally found that the joint lobbying efforts of several companies and associations in the cement industry with the Belgian regulatory authorities had constituted a concerted practice restricting competition by object.

The facts

A Dutch producer of concrete, ORCEM, wanted to enter the Belgian market. However, ORCEM produced concrete in a slightly different way than the traditional Belgian producers. Traditional concrete contains cement, water and sand, ground or crushed stone; while ORCEM replaced cement with ground granulated blast furnace slag (“LMA”). Belgian and European standards at that time did not permit the use of LMA for the production of cement and concrete. Therefore, ORCEM asked, on the one hand, for technical approval from the Belgian Union for Technical Approval in the Construction Sector (“BUtgb/UBAtc”) and, on the other hand, a quality label with the Belgian office for standardisation (“NBN”). This Belgian office was also involved in the review of the applicable standards for concrete and cement. The relevant approval standardisation and certification processes were delayed and ORCEM was convinced this was due to the lobbying practices undertaken by some traditional cement producers and associations.

Belgian Competition Authority Decision

The BCA agreed with ORCEM and decided that the traditional cement producing companies, as well as some associations of undertakings active in the sector, had delayed ORCEM’s market entry by their participation in the relevant advice and decision-making bodies. The anti-competitive practices in this case had the object of delaying the market entry of concrete produced with ground granulated blast furnace slag instead of cement of type CEM III and protecting the producers of cement of type CEM III. This protectionism had at least the following potential effects: (i) Partitioning the Belgian market for grey cement.; (ii) Reducing choice for consumers of ready-mixed concrete.; (iii) Creating or reinforcing barriers to entry on the whole or part of the Belgian grey cement market and artificially delaying the drop in demand for grey cement CEM III for making concrete.; (iv) Delaying the market entry of a new competing product, namely ground granulated blast furnace slag, with a risk of maintaining high prices for ready-mixed concrete.

The BCA decided that the undertakings’ and the associations’ activities within the advice and decision-making bodies went further than normal lobbying practices. Their role was not limited to influencing the relevant bodies, as they participated themselves in determining the normative framework. Consequently, it had imposed a fine of 14.7 million EUR on these companies and associations.

Brussels Court of Appeal and Supreme Court

The Court of Appeal took exactly the opposite view to the BCA. It took decision-making power in the relevant bodies as a relevant criterion in its assessment, which seems to be in line with European case law[1] and stated that the BCA’s decision’s addressees had no decision-making power or a majority in the relevant bodies. Therefore, no anti-competitive practices had occurred in this case. In its judgment, the Court of Appeal also applied the Commission’s Horizontal Guidelines[2] and stated that the certification and standardisation practices respected the European requirements regarding openness, objectivity, transparence and non-discrimination. For these reasons, the Court of Appeal held that the lobbying practices did not infringe the competition rules.

The Supreme Court confirmed the Court of Appeal’s judgment and consequently the large fines imposed by the BCA were annulled.

The lesson for undertakings

This case law shows that undertakings should note that there is a fine ‘line’ between legitimate and anti-competitive lobbying practices. Undertakings must carefully ensure that they stick to “normal” lobbying practices, which the Commission’s Green Paper on Transparency defines as “all activities carried out with the objective of influencing the policy formulation and decision-making processes […]”.[3] On the basis of the Belgian case law discussed here, it seems that having decision-making power or a majority in the relevant decision-making bodies is a relevant criterion to decide whether the line between legitimate and anti-competitive lobbying practices is crossed.

[1] Case T-432/05, EMC Development AB v. Commission, 12 May 2010, §81-82.

[2] Commission, Guidelines on the applicability of Article 101 of the Treaty on the Functioning of the European Union to horizontal co-operation agreements, 14 January 2011, §281-283.

[3] Commission, Green Paper European Transparency Initiative, 3 May 2006, COM(2006) 194 final.; Brussels Court of Appeal, Holcim v BCA, 30 June 2016, §91.

 

 


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