Concentrations

Definition
Concentrations that are subject to the approval by the Competition Council
Notification
The reversibility of a concentration
Investigation and decision
Fines
Appeal

Definition

A concentration refers to each act that entails a permanent change of control over an undertaking. Control over an undertaking is the possibility to exercise a decisive influence over her activities.

A concentration can take place:

when two independent undertakings decide to merge;
when an undertaking or a person who has control over an undertaking takes over another undertaking or a part of the activities of this undertaking and getting by this way exclusive control over it;
when undertakings create a joint venture, that performs all the functions of an autonomous economic entity on a lasting basis.

For a complete overview of the concentration proceedings see article 6 of the act to protect the economic competition (APEC), consolidated on September 15, 2006; hereafter the Act.

Concentrations that are subject to the approval by the Competition Council

In Belgium only concentrations of a certain dimension (size) are subject to the prior approval of the Competition Council. To determine which concentrations should be subject to prior approval, the legislator has introduced thresholds of notification.

Only undertakings which fulfil, the following two conditions are subject to approval:

the undertakings concerned, taken together, must have a total turnover in Belgium, of more than 100 million euro,
and at least two of the undertakings concerned must each have a turnover of at least 40 million euro each in Belgium ( article 7 of the act ).

If undertakings that want to merge exceed these thresholds, the concentration must be notified to the College of Competition Prosecutors (article 9 of the act ).

Concentrations, which are subject to the control of the European Commission, are not subject to the approval of the Belgian Competition Council (see regulation EC NR. 139/2004 of the Council of the European Union January 20, 2004 concerning the control on mergers).

This is an exclusive power of the European Commission, nevertheless, under certain conditions they can be referred to the Belgian Competition Authority.

The regulation (EC) no. 139/2004 (PDF, 214.54 Kb) of the Council of the European Union of January 20, 2004 concerning the control on concentrations of undertakings adopted as part of the modernisation of the community competition policy determines under which conditions a concentration is subject to the control of the European Commission and in which cases the referring mechanisms are applicable.

Notification

The undertakings must notify concentrations

before their implementation and,
after the conclusion of the agreement.
However, a proposed agreement can also be notified,
In the case of a takeover bid or public offer of exchange, the parties may notify a project provided that they declare explicitly that the takeover bid has been announced publicly. (Article 9 §1 of the act ).

The concentrations must be notified at the registry of the Competition Council for the attention of the College of Competition Prosecutors by using the form (PDF, 98.41 Kb) (only the versions in Dutch and French are official) in annexe to the Royal Decree concerning the notification of concentrations of undertakings pursuant article 9 of the Act on the Protection of Economic Competition consolidated on 15th of September 2006.

For practical stipulations and prenotification meetings please contact the registry of the Competition Council

The reversibility of a concentration

Until the chamber of the Competition Council pronounces its decision on the permissibility of the concentration, the undertakings concerned may not implement the concentration. The Council may, at any time, if requested by the parties, grant a derogation for certain proceedings (acts) (article 9 § 4 up to art. 6 of the Act ).

Investigation and decision

The Competition Council must take a decision within 40 working days after the day following the day on which the notification is received. This time limit shall be extended by 15 working days when the undertaking concerned provides commitments with a view to having its concentration declared permissible.

The time limit may only be extended at the express request of the notifying parties, and only for the duration proposed by them (article 58 of the Act ).

In the case of a simplified procedure - when the concentrations have limited effect on the market - the competition prosecutor shall transmit a letter to the notifying parties within 20 working days to establish the permissibility of the concentration.

That letter will be considered as a decision of admissibility of the Council

If the conditions for the application of the simplified procedure are not satisfied or if there are doubts about the permissibility of the concentration, the competition prosecutor sends a letter within 20 working days to the notifying parties, which terminates the simplified procedure (article 61 of the Act ).

The Council of Competition relies for its decision on the motivated report of the Competition Prosecutor based on an investigation carried out by the Competition Service. In its analysis the Council considers the need to maintain and to develop an active competition, to have a choice between suppliers and customers, taking into account the interests of the consumers. The Council declares the concentrations permissible which do not result in effective competition being significantly impeded in the Belgian market, in particular through the creation or strengthening of a dominant position.

If the undertakings concerned control together less than 25% of any relevant market, the Competition Council must declare the concentration permissible.
If necessary the undertakings can propose commitments so that the concentration can be declared permissible. These commitments consist of conditions and obligations which the undertakings have committed to observe.
In case of serious doubts about the permissibility of the concentration, the Competition Council decides to initiate a second phase investigation procedure of 60 working days.
This time limit shall be extended by a period of maximum 20 working days if the undertakings concerned propose commitments.

The time limit may only be extended at the express request of the parties, and for a period proposed by the parties. The Competition Council asks the College of Competition Prosecutors to submit a supplementary investigation report and declares subsequently whether the concentration is permissible or not, with or without conditions.

For a general overview of the procedures concerning concentrations, we have three simplified scheme at your disposal:

Fines

The Competition Council can impose fines.

Undertakings can be fined of up to 10 % of the turnover:
for implementing a concentration before it is declared permissible
for not observing a prohibition decision
for not observing the conditions imposed in a decision that authorises a concentration
Undertakings can be fined of up to 5 % of the average daily turnover, for non-compliance with prohibitive decisions or decisions of provisional authorisation;
Undertakings can be fined of up to 1 % of the turnover for not notifying a merger that falls within the scope of the Belgian Competition Act;
Persons, undertakings or associations of undertakings can be fined of up to 1 % of the turnover for not being co-operative during the inquiry (art. 63 and the following of the Act )

The Competition Council can also impose penalty payments in case of non-respect of decisions up to an aggregate amount of 5 % of the daily relevant turnover.

Appeal

The decisions of the Competition Council, (as well as the tacit decisions of the permissibility of concentrations)

may be appealed against before the Brussels Court of Appeal, within 30 days after notification of the decision of the Council.
Each person who has asked to be heard during the session can lodge an appeal before the Brussels Court of Appeal at the latest thirty days after notification of the decision (article 75 and following of the Act ).

Within 30 working days, after the notification of the Council’s decision that prohibits a concentration, the Council of Ministers may authorise the implementation of a concentration for reasons of general interest which outweigh the risk of competition being undermined. Within the same time limit the Council of Ministers may also overturn totally or in part any conditions and obligations imposed by the Competition Council (article 60 of the Act ).

More about concentrations

information about the administrative procedure or copies of decisions

For all other issues please contact

Concentrations

Proceedings concerning concentration control

Legislation

Overview of information on concentrations