Member Article

Article 2(2) of the Competition Act
renders agreements falling  within this
prohibition void, unless they satisfy the conditions for  exemption under article 2(3) in a similar way
as articles 101(2) and  (3) TFEU.

Article 5(1) of the Competition Act
confirms that the prohibition  on
restrictive practices is not applicable to agreements that benefit  from an EU block exemption. Article 5(2) of
the Competition Act  extends the effect
of the EU block exemptions to situations where 
trade between member states is not affected, but which would benefit  from an exemption where the trade between the
member states  would have been affected.

Thus far no ‘Belgian’ block
exemptions or guidelines in relation  to
vertical agreements have been issued.

A number of Royal Decrees have been
adopted implementing  the Competition Act
regarding procedural issues, such as the filing 
of complaints.

Types of vertical restraint

2 List and describe the types of vertical restraints that are subject  to antitrust law. Is the concept of vertical
restraint defined in the  antitrust law?

The Competition Act does not define
vertical restraints or list specific  vertical
restraints covered by the prohibition of article 2 of the Competition  Act. The Belgian courts and competition
authorities have  stated that the
Competition Act should be interpreted in light of the  jurisprudence of the Court of Justice of the
European Union (CJEU)  and the decisions
and guidelines of the European Commission. The 
concept and types of vertical restraints subject to Belgian antitrust  law are therefore nearly identical to the
equivalent EU competition  law concepts
and types of vertical restraints.

Vertical restraints subject to
Belgian antitrust law include resale  price-fixing,
export restrictions, non-compete clauses and exclusive  and selective distribution agreements.

Legal objective

3 Is the only objective pursued by the law on vertical restraints  economic, or does it also seek to promote or
protect other interests?

The aim of the Competition Act is
mainly economic (ie, to protect  competition).
In the application of the exemption to the prohibition  on restrictive agreements under article 2(3)
of the Competition Act,  the interests of
consumers are also taken into account, as well as  those of small and medium-sized undertakings.
The protection of  the interests of small
and medium-sized undertakings is explicitly 
included in article 2(3) of the Competition Act, which contains the  same four conditions for exemption as article
101(3) TFEU, but also  adds to the
criterion ‘which contribute to improving production or  distribution or to promoting technical and
economic progress’ the  wording ‘or which
enable small and medium-sized undertakings to 
assert their competitive position in the market concerned or
internationally’  as an alternative
ground for exemption.

Responsible authorities

4 Which authority is responsible for enforcing prohibitions on
anticompetitive  vertical restraints?
Where there are multiple responsible  authorities,
how are cases allocated? Do governments or ministers  have a role?

The prohibition of anti-competitive
vertical restraints can be  enforced by
the ordinary courts and by the Competition Council,  after investigation by the Directorate
General for Competition under  the
supervision of the College
of Competition Law
prosecutors.  The Competition Council is
an independent administrative court,  whereas
the Directorate General for Competition is a department  of the Ministry of Economic Affairs. The College of Competition  Law Prosecutors,
which is part of the Competition Council, leads the  investigations carried out by the Directorate
General for Competition  and also has
some decisional powers.

Requests for preliminary measures
have to be submitted to the  College of Competition Law Prosecutors.
If the prosecutor considers  the request
not to be justified, the request will be rejected. The  requesting party may appeal such rejection to
the president of the  Competition
Council. On the other hand, in case the prosecutor  considers the request for preliminary
measures to be justified, he  will submit
a report with his findings based on the investigation  to the president of the Competition Council
who will then issue a  judgment.

The judgment of the president of the
Competition Council   can be appealed
before the Brussels Court of Appeal.

Complaints also have to be submitted
to the College of
Competition   Law Prosecutors. If the prosecutor considers
the complaint not   to be justified, the
complaint will be rejected. The complainant may   appeal such rejection to the Competition
Council. If, on the other   hand, the
prosecutor considers that the complaint is justified, he will   submit a report to the Competition Council,
which will then decide   upon the case.

The minister of economic affairs can
order a general investigation   or an
investigation of a particular sector of the economy. However,   he has no influence on the outcome of the
case. Furthermore,   the minister can
appeal cases to the Court of Appeals in Brussels
or   the Supreme Court and he can also
make written submissions to the   courts
and the Competition Council.

The ordinary courts also play an
important role in the application   and
enforcement of the competition rules on vertical restraints and   frequently pronounce on the legality of
distribution, agency and franchising   agreements.
They cannot impose fines, but can order a certain   practice to stop, subject to periodic
penalty payments in case of noncompliance  
and publicity measures. They can also award damages,   to the extent that the conditions for the
breach of the competition   laws, the
causal link and the damages can be demonstrated.

Jurisdiction

5 What is the test for determining whether a vertical restraint will    be subject to antitrust law in your
jurisdiction? Has the law in your    jurisdiction
regarding vertical restraints been applied extraterritorially
?   Has it been applied in a pure internet
context and if so what factors   were
deemed relevant when considering jurisdiction?

The Competition Act applies to all
vertical restraints which affect    competition
on the Belgian market or part of it.   Foreign
undertakings are therefore also subject to the Competition   Act if they participate in restrictive
agreements or concerted   practices
having an effect on the Belgian market.

To date there has been no specific
case dealing with this issue in a   pure
internet context to our knowledge, but it is likely that the same   principles would be taken into account in
such a context.

Agreements concluded by public entities

6 To what extent does antitrust law apply to vertical restraints in   agreements concluded by public entities?

The Competition Act applies to
agreements between ‘undertakings’.   The
concept of ‘undertaking’ in the Competition Act has the same   meaning as in EU competition law. Vertical
restraints in agreements   with public or
state-owned entities will therefore be subject to antitrust   law, to the extent that the agreement was
concluded by the entity   in the
performance of an economic activity and not when fulfilling   its public task. This view has been
confirmed by the Brussels Court   of
Appeal in a preliminary ruling (Brussels Court of Appeal, 31 January   2006, International Gemmological
Institute BVBA v Hoge Raad   voor Diamant
VZW, Jaarboek Handelspraktijken en Mededinging   2006, page 762) and recently also by the College of Competition Law   Prosecutors (Decision of
the College of Competition Law Prosecutors,   16 December 2009, Case 2008-P/K-72-AUD, ClearChannel
Belgium   v JC Decaux Belgium and la
Région de Bruxelles-Capitale and Decision  
of the College
of Competition Law
Prosecutors, 18 December   2008, Case
2008-V/M-73-AUD, Belgian Poster v JC Decaux Belgium   and la Région de Bruxelles-Capitale).

Sector-specific rules

7 Do particular laws or regulations apply to the assessment of vertical   restraints in specific sectors of industry
(motor cars, insurance, etc)?

Please identify the rules and the
sectors they cover.   On the basis of
article 5 of the Competition Act, the EU Motor  
Vehicle Block Exemption and other EU block exemptions will apply   to agreements only having effect on the
Belgian market.

When applying article 3(5) of the
Motor Vehicle Block Exemption   No.
1400/2002 to the termination of dealerships for motor vehicles,   the mandatory Belgian Act of 27 July 1961 on
the unilateral   termination of
dealerships should be taken into account.

General exceptions

8 Are there any general exceptions from antitrust law for certain types   of agreement containing vertical restraints?
If so, please describe.

In order for the prohibition of
article 2(1) of the Competition Act to   apply,
the vertical restraint must have an ‘appreciable effect’ on competition   within Belgium or a relevant part of it.
By virtue of article 11   (3) of the
Competition Act, the Competition Council has been given   the power to issue notices with regard to
the application of the Competition   Act,
including a de minimis notice. However, no such notice   has yet been issued. In practice, the
Belgian competition authorities   and
courts seem to apply the European Commission’s De Minimis   Notice (eg, Competition Council, 10 October
2003, Case 2003-P/K-   79, Brandini Blaise
v BVBA Rombouts, or Brussels Court of Appeal,   7 March 2006, Power Oil
NV v DDD Invest
NV, Jaarboek
Handelspraktijken   en Mededinging 2006,
page 773). Article 2 (3) of the   Competition
Act explicitly includes the criterion ‘which enable small   and medium-sized undertakings to assert
their competitive position   in the
market concerned or internationally’ as an alternative ground   for exemption. However, to date this
criterion has not yet been relied   upon
or discussed in any decision of the competition authority.

Agreements

9 Is there a definition of ‘agreement’ – or its equivalent – in the
antitrust   law of your jurisdiction?

There is no definition of
‘agreement’ in the Competition Act. The  
Belgian competition authorities and courts apply the same definition   of ‘agreement’ as developed by EU case law.
Like the European   Commission and the EU
courts, they will examine the agreement or  
concerted practice in the broader legal and economic context and   take into account the existence of network
effects of similar agreements   applied
by other undertakings (eg, Gent Court of Appeal, 3   February 2010, DDD Invest v Power Oil,
RDC 2010 (7), page 696,   or Commercial
Court of Dendermonde, 3 November 2010, BVBA  
DD Bikes v BV Ducati North Europe, not yet published).

10 In order to engage the antitrust law in relation to vertical
restraints,   is it necessary for there
to be a formal written agreement or can the  
relevant rules be engaged by an informal or unwritten understanding?

In line with EU competition law, the
concept of ‘agreement’ under   Belgian
competition law is broadly interpreted and also covers forms   of vertical cooperation that are not
formalised in a written agreement.   It
also embraces the existence of any concurrence of wills of   at least two independent parties. The form
of the agreement, or the   manner in
which it is concluded, are irrelevant in this respect, so that   an agreement can even be inferred from an
oral understanding or a   tacit
acquiescence. As such, the implementation of general terms and   conditions, recommendations having the
characteristics of a moral   obligation
or gentlemen’s agreements could in principle constitute an agreement under
Belgian competition law.

Parent and related-company agreements

11 In what circumstances do the vertical restraints rules apply to   agreements between a parent company and a
related company (or   between related
companies of the same parent company)?

Article 2 of the Competition Act
applies only to agreements between   independent
undertakings and therefore not to those between a parent   and its subsidiary, nor between two
undertakings controlled   by the same
ultimate parent company. The single economic entity   doctrine  
applies as under EU competition law.

Agent–principal agreements

12 In what circumstances does antitrust law on vertical restraints apply   to agent–principal agreements in which an
undertaking agrees to   perform certain
services on a supplier’s behalf for a sales-based   commission payment?

There is no explicit provision for
agents in the Competition Act. In   the
preparatory works to the Competition Act, the Belgian legislators   clearly indicated their desire for
equivalent provisions in the   Competition
Act to be interpreted in the same way as under EU   competition law. It can therefore be
expected that the competition   authorities
and courts will not apply antitrust law to agreements   between a principal and a ‘genuine agent’
and will apply the same   criteria as the
European Commission and the EU courts for qualification   as a ‘genuine agent’.

13 Where antitrust rules do not apply (or apply differently) to agent–   principal relationships, are there rules (or
is there guidance) on what   constitutes
an agent–principal relationship for these purposes?

Please see question 12. No specific
guidance has been issued thus far   on
the subject by the Belgian legislator or competition authorities.   The agent–principal relationship will
therefore have an equivalent   meaning
under Belgian competition law as under EU competition   law. The EU case law and the Guidelines of
the European Commission   (in particular
points 12 to 21) can be relied upon.

Intellectual property rights

14 Is antitrust law applied differently when the agreement containing
the   vertical restraint also contains
provisions granting intellectual property  
rights (IPRs)?

The EU Block Exemption No. 330/2010
(the EU Vertical Agreements   Block
Exemption) and the Commission’s Guidelines on Vertical   Restraints apply to agreements granting IPRs
where the granting   of such IPRs is not
the primary object of the agreements and the  
IPRs relate to the use, sale or resale of the contract products by the   buyer or its customer. If the primary object
of the agreement relates   to the
licensing of IPRs, the applicability of EU Block Exemption No.   772/2004 (the EU Technology Transfer Block
Exemption) and the   related guidelines
should be checked.

Analytical framework for assessment

15 Explain the analytical framework that applies when assessing vertical   restraints under antitrust law.

The analytical framework used by the
Belgian competition authorities   is very
similar to the framework used by the EU competition   authorities.

Vertical restraints agreed by public
entities while performing   their public
tasks, included in genuine agency agreements or in agreements   between companies belonging to a same
corporate group, are   excluded from the
application of antitrust law.

For other vertical agreements, it
should first be checked whether   or not
the vertical agreement contains a hard-core restriction, such   as the fixing of minimum resale prices,
certain restrictions on the   customers
to whom, or the territories into which, a buyer can sell   the contract goods, restrictions on members
of a selective distribution   network
supplying each other or end-users and restrictions on   component suppliers selling components as
spare parts to the buyer’s   finished
products. Agreements containing hard-core restrictions do   not fall within the scope of the EU block
exemption.

If the agreement does not contain a
hard-core restriction, it   should
subsequently be checked as to whether it can be considered   de minimis, because it does not appreciably
restrict competition on   the Belgian market
or a relevant part of it. The Commission’s De  
Minimis Notice provides guidance in this respect.

Given that under Belgian competition
law the EU block exemptions   also apply
to agreements without an appreciable effect on trade   between EU member states, the agreement
should then be checked to   see whether
it falls within the scope of the EU Vertical Agreements   Block Exemption (or another EU block
exemption such as the Technology   Transfer
Block Exemption).

Finally, if the vertical agreement
restricts competition but cannot   be
considered de minimis and does not fall within the scope of an EU   block exemption, an ‘individual assessment’
of the agreement will be   made to
determine whether it falls within the scope of the prohibition   of article 2(1) of the Competition Act and,
if it does, whether the   conditions for
individual exemption under article 2(3) of the Competition   Act are satisfied. In making this
assessment, the competition   authority
and courts will closely follow EU policy, in particular the   Guidelines on Vertical Restraints of the
European Commission and   the case law of
the EU courts.

16 To what extent are supplier market shares relevant when assessing   the legality of individual restraints? Are
the market positions and   conduct of
other suppliers relevant? Is it relevant whether certain   types of restriction are widely used by
suppliers in the market?

The Belgian competition authorities
and courts do consider market   share,
market structure and other economic factors when assessing   individual restraints. The Belgian regime
and practice are in line   with the EU
regime and practice in this respect. The competition   authorities and courts also refer to the
criteria set out in the European   Commission’s
Notice on Agreements of Minor Importance (the De   Minimis Notice, OJ 2001, C368/13) (eg,
Antwerp Court of Appeal,   25 May 2009, Limburgse
Drankencentrale NV v Brouwerij Haacht   NV,
Jaarboek Handelspraktijken en Mededinging 2009, page 998 or   Competition Council, 10 October 2003, Case
2003-P/K-79, Brandini   Blaise v BVBA
Rombouts, MB 6 May 2004, page 37.041).  
In the above-cited decisions, the Brussels Court of Appeal referred   to the same levels of market share as in the
De Minimis Notice. An   agreement between
undertakings will therefore generally be deemed   not to have an appreciable effect on
competition if the market share   of each
of the parties, which are not direct or potential competitors,   does not exceed 15 per cent. If the parties
are direct or potential   competitors,
their market share should not exceed 10 per cent for   the agreement to be considered de minimis.

In the Limburgse Drankencentrale
v Brouwerij Haacht decision,   the
Antwerp Court of Appeal also considered the market structure,   referring to the same de minimis notice. The
threshold is lowered to 5   per cent if
on a relevant market the competition is restricted because   of the cumulative blocking effect of
parallel networks of agreements   which
have similar effects on the market.

If the vertical restraints concluded
by the supplier and its competitors   have
the cumulative effect of foreclosing market access, then   any vertical restraints that contribute
significantly to that foreclosure   may
be found to breach the Competition Act. The Brussels Court of   Appeal thus ruled that the cumulative effect
of three Belgian fruit   auction houses,
applying the same terms and conditions to sales,   significantly restricted competition in the
market (Brussels Court of   Appeal, 29
September 2004, Belgische Fruitveiling BVBA/Nationale   Unie van Belgische exporteurs van Land-en
Tuinbouwproducten   VZW ao, Jaarboek
Handelspraktijken en Mededinging 2004, page  
946; Competition Council, Competition Council Annual Report   2004, page 51; see also Antwerp Court of
Appeal, 14 March 2006,   Jaarboek
Handelspraktijken en Mededinging 2006, page 784).   In cases where the agreement contains a
hard-core restriction,   the competition
authorities and courts do not further examine the   appreciable effect of the restriction on
competition (eg, Competition   Council, 7
July 2008, Case 2008-P/K-43, Test-Achats v auto-écoles   de Belgique, or Brussels Court of
Appeal, 23 January 2007, BVBA   C v
BVBA S, Limb Rechtsl 2007, page 307).

17 To what extent are buyer market shares relevant when assessing the   legality of individual restraints? Are the
market positions and conduct   of other
buyers relevant? Is it relevant whether certain types of   restriction are widely agreed to by buyers
in the market?

To date, there have been no specific
decisions known to us that specifically  
take into account the buyer market shares when assessing   the legality of individual restraints.
However, as under Belgian competition   law,
the EU block exemptions also apply to purely national   situations where trade between member states
is not affected, the   introduction of
the 30 per cent market share in the new EU Vertical   Agreements Block Exemption, adopted on 10
May 2010, will have   a direct effect for
Belgian cases as well.

Block exemption and safe harbour

18 Is there a block exemption or safe harbour that provides certainty   to companies as to the legality of vertical
restraints under certain   conditions? If
so, please explain how this block exemption or safe   harbour functions.

Article 5 of the Competition Act
confirms that the prohibition on   restrictive
practices does not apply to agreements that benefit from   an EU block exemption. In Belgium, the effect of the EU block   exemptions is extended to situations where
trade between EU member   states is not
affected, but which would benefit from an exemption   where the trade between the member states
would have been affected.

The EU Block Exemptions Regulations
No. 330/210, 461/2010 and   772/2004
therefore also apply to purely national situations.   Article 50 of the Competition Act provides
that ‘Belgian’ block   exemptions can be
issued in the form of a Royal Decree. However,  
no such ‘Belgian’ block exemptions have yet been adopted.

Types of restraint

19 How is restricting the buyer’s ability to determine its resale price   assessed under antitrust law?

Vertical price-fixing is considered
to constitute a hard-core restriction   of
competition, for which generally no exemption can be obtained   (eg, Competition Council, 8 December 1998, No. 98-RPR-6, NV   Gebroeders Mermans v NV Van Cauwenbergh,
MB 10 November   1999, page 41.940 or
Brussels Court of Appeal, 13 October 1998,  
NV Laroy-Duvo v Belgian Government, MB 21 October 1998,   page 34.884). The determination of minimum
resale prices has been   considered as a
restriction of competition per se and to our knowledge   no exemption for resale prices maintenance
practices has been   granted by the
Belgian competition authorities or courts.  
The setting of maximum prices or the recommendation of prices   is in principle allowed, provided that the
supplier does not use any   pressure or
other incentives to enforce the recommended prices.   It should be noted, however, that in one of
its recent decisions,   the Antwerp Court
of Appeal has assessed the determination of minimum   resale prices from a different perspective
(Antwerp Court of   Appeal, 27 October
2008, NV Frost v BVBA Evlier, RCB 2009  
(1), page 60). The Antwerp Court of Appeal referred to the general   rules
on the interpretation of contracts under Belgian contract law,   obliging the judge to look for the common
intent of the parties at the   conclusion
of the agreement (article 1156 Civil Code) and, if a clause   can be interpreted in different ways, to
privilege the interpretation of   the
clause that would give it effect (article 1157 Civil Code). It then   ruled that the parties, by stipulating in
their agreement that ‘it is   requested
to respect the recommended minimum resale price’, could   not have intended to stipulate a minimum
resale price because this   would imply
that they would have intended to stipulate an invalid   agreement. Therefore the court argued that
the expressly stipulated   ‘recommended
minimum price’ should be regarded only as a recommended   price and not as a minimum price. The
refusal to supply was   not considered as
a means of enforcing the recommended price, but   merely as a serious breach of contract,
justifying the unilateral termination   of
the contract by the distributor and the award of damages   to the distributor.

20 Have the authorities considered in their decisions or guidelines
resale   price maintenance restrictions
that apply for a limited period to the   launch
of a new product or brand, or to a specific promotion or sales   campaign; or specifically to prevent a
retailer using a brand as a ‘loss   leader’?

To date, there have been no
decisions known to us that specifically  
address resale price maintenance for limited periods of time. Most   likely the Belgian regime will not deviate
from the EU regime and   therefore any
evolution of EU decisional practice under the Guidelines   on Vertical Restraints, adopted on 10 May
2010, will have an   effect for Belgian
cases as well.

In accordance with article 101 of
the Belgian Market Practices   Act of 6
April 2010, selling at a loss is, however, prohibited. The prohibition   is a matter of public order and sales at a
loss will be declared   null and void.
Problems of ‘loss leadership’ can therefore also be   reviewed within the framework of the Market
Practices Act.

21 Have decisions or guidelines relating to resale price maintenance   addressed the possible links between such
conduct and other forms   of restraint?

In the ‘Orthodontist case’, the
Competition Council had to come to a   decision
on resale price maintenance practices linked to market partitioning   (Competition Council, 10 January 2001, Case
2001-V/M-   02, Belgische
Beroepsvereniging van Universitaire Specialisten in de   Orthodontie v Landsbond Der Christelijke
Mutualiteiten en Regionale   Christelijke
Ziekenfondsen, MB 5 May 2001, page 14.852). The   Christelijke Mutualiteiten (the CM, a health
insurance fund) determined   the
conditions according to which a practitioner was approved   as an orthodontist and published a list with
the names of approved   orthodontists for
patients to use when choosing an orthodontist. The   CM also imposed a maximum amount up to which
treatment costs   would be reimbursed,
implying that any additional costs were to be  
borne by the patients themselves. The Competition Council judged   that the combination of these two
restrictions constituted a prima   facie
breach of the Competition Act. In a more recent case, the Competition   Council also suspected the Belgian Federation
of Driving   Schools, which clearly
prohibited its members from ‘destabilising  
prices’, of market-partitioning. The driving schools were also
prohibited   from attracting clients from
their competitors in a given territory.  
These facts led the Competition Council to rule that article 2   of the Competition Act had been breached and
to fine the federation   (Competition
Council, 7 July 2008, case 2008-P/K-43, Test-Achats   v auto-écoles de Belgique).

22 Have decisions or guidelines relating to resale price maintenance   addressed the efficiencies that can arguably
arise out of such   restrictions?

Before the coming into force of EC
Regulation No. 2790/99 (since 1   June
2010 replaced by EU Regulation No. 330/2010), the competition   authorities and courts addressed the issue
of efficiencies in several   decisions
relating to resale price maintenance (eg, Competition   Council, 25 March 1997, Laroy-Duvo NV,
RW 1997-1998 (2), page   52, or Brussels Court of Appeal, 13 October 1998, Laroy-Duvo NV   v Belgian
State, MB 21 October 1998, page 34.884). In both cases   it was decided that the efficiencies that
could arise out of a system of   fixed
prices could not outweigh the harmful effects of the resale price   maintenance for the consumer.

It seems that the Belgian
competition authorities have not really  
addressed the issue over the past decade, but would legally not be   prevented from doing so. Given that the
legislators wished the Competition   Act
to be interpreted in line with the equivalent EU provisions,   it can be expected that any evolution of EU
case law in this   respect will be
followed in Belgium.

23 How is restricting the territory into which a buyer may resell
contract   products assessed? In what
circumstances may a supplier require a   buyer
of its products not to resell the products in certain territories?

Article 2 of the Competition Act is
drafted and interpreted in the   same way
as article 101 TFEU. By virtue of article 5 of the Competition   Act, EU Regulation No. 330/2010 also applies
to agreements   without any significant
effect on trade between EU member states,  
but which would benefit from an exemption where the trade between   the member states would have been affected.
Also the Guidelines on   Vertical
Restraints of the European Commission and EU case law can   be expected to be closely followed. For a
recent example see Antwerp   Court of Appeal, 29 March 2010, Dubraco v
Bauer Kompressoren,   Dräger
Medical Belgium and Dräger
Safety Belgium, TBM 2010
(2),   page 138, in which the prohibition
of a buyer from reselling outside   a
certain territory without the prior consent of the supplier was considered   a significant restriction and thus null and
void.

24 Explain how restricting the customers to whom a buyer may resell   contract products is assessed. In what
circumstances may a supplier   require a
buyer not to resell products to certain resellers or endconsumers?

Please see question 23. The Belgian
regime is entirely in line with the   EU
regime in this respect, as can be seen in a recent decision of the   Commercial Court of Dendermonde (Commercial
Court of Dendermonde,   9 February 2009, BVBA
E & G v NV Ecuphar, not yet   published).
In this decision, the distribution agreement was found to   be null because of a prohibition on active
sales imposed on the distributor   in a
territory not reserved to the principal and not attributed   to another distributor.

25 How is restricting the uses to which a buyer puts the contract   products assessed?

Please see question 23. The Belgian
regime is entirely in line with the   EU
regime in this respect.

26 How is restricting the buyer’s ability to generate or effect sales
via the   internet assessed?

There is no specific Belgian
guidance on the subject, but Belgian case 
 law has adopted the same position
as the EU competition authorities   on
the buyer’s restriction of sales via the internet. The Belgian   Supreme Court in the Makro case
(Supreme Court, 10 October 2002,   Makro
v Beauté Prestige International ao, www.cass.be), when   assessing a selective distribution system
which restricted the buyer   to
generating sales via the internet, referred expressly to Regulation   No. 2790/1999 and the 2000 Guidelines on
Vertical Restraints of the   European
Commission when explaining its decision. The Supreme   Court stated that a vertical agreement
cannot contain a restriction   to sell
via the internet, unless such restriction is objectively justified.   In the case referred to, the Liège Court of
Appeal had given a   rather broad
interpretation to the term ‘objective justification’. The   restriction on the sale via the internet
concerned luxury perfumes and   cosmetics,
and the Liège Court of Appeal held that the restriction on   internet sales was objectively justified by
the nature of these products,   requiring
personal professional advice and therefore methods of   sale which cannot be assured over the
internet. The Supreme Court   deciding on
this case explicitly rejected the allegation of the appealing   party that for internet sales only
restrictions based on qualitative   criteria
regarding the use of the internet can be imposed. It held that   even an outright prohibition on internet
sales could be permissible to   the
extent that such prohibition could be objectively justified. Consequently,   the appeal was dismissed.

27 Have decisions or guidelines on vertical restraints distinguished in
any   way between different types of
internet sales channel?

To date, there have been no specific
decisions known to us that distinguish   between
different types of internet sales channels. Most likely   the Belgian regime will not deviate from the
EU regime and therefore   any evolution
of EU decisional practice following the adoption of the   new Guidelines on Vertical Restraints on 10
May 2010 will have an   effect for
Belgian cases as well.

28 Briefly explain how agreements establishing ‘selective’ distribution   systems are assessed. Must the criteria for
selection be published?

Please see question 23. The Belgian
regime is entirely in line with the   EU
regime in this respect (eg, Commercial Court of Dendermonde,   3 November 2010, BVBA DD Bikes v BV
Ducati North Europe,   not yet published, Competition Council, 25
March 2003, case 2003-   E/A-24, Diprolux
SA, MB 14 October 2003, page 49.831). It is not   necessary for the criteria for selection to
be published.  

29 Are selective distribution systems more likely to be lawful where
they   relate to certain types of
product? If so, which types of product and  
why?

Entirely in line with the EU regime,
under Belgian competition law,   the
luxury image of products can justify selective distribution. In the   rare Belgian case law on selective
distribution systems, most of the   cases
concerned jewellery (eg, Antwerp Court of Appeal,
22 November   1995, Van Sloun
Juweliers BVBA v Les must de Cartier Belgique   NV,
Jaarboek Handelspraktijken en Mededinging 1995, page 345),   or perfume, personal hygiene products and
cosmetics (eg, Competition   Council, 26
June 1995, Case 95-PRA-1, Van Nieuwenhuysen v   NV Parfums Christian Dior, SAB, MB
26 July 1995, page 20.260;   Competition
Council, 25 March 2003, Case 2003-E/A-24, Diprolux   SA, MB 14 October 2003, page 49.831;
Supreme Court, 10 October   2002, Makro
v Beauté Prestige International ao, www.cass.be). In   the Makro case, the Liège Court of
Appeal stated that cosmetics   and luxury
perfumes can be considered as sophisticated products   and the results of special research
processes, whose luxury image   can be
preserved through selective distribution, since the product   will thus stand a better chance of achieving
its rightful place at the   points of
sale.

30 In selective distribution systems, what kinds of restrictions on   internet sales by approved distributors are
permitted and in what   circumstances? To
what extent must internet sales criteria mirror   offline sales criteria?

In the aforementioned Makro case
(see question 29), the Supreme   Court
dismissed the appeal lodged against the decision of the Liège   Court of Appeal, which stated that the
restrictions on internet sales   were
objectively justified since the nature of the product (perfume)   required distribution via ‘first-rate’
points of sale where appropriate,   personal,
professional advice could be assured. Thus, the suppliers   could not only require a distributor to
maintain a ‘bricks-and-mortar’   store,
but could even forbid them from selling online if such prohibition   were objectively justified. Most likely the
Belgian regime will   follow any
evolution of EU decisional practice and the Guidelines on   Vertical Restraints, adopted on 10 May 2010,
may therefore have an   effect for
Belgian cases as well.

Belgian law has specific legislation
which sets out certain additional   rules
for internet sales that do not apply to other sales (ie,   articles 45 to 48 of the Belgian Market
Practices Act of 6 April 2010   and
articles 8 to 12 of the E-commerce Act of 11 March 2003).   31 Has the authority taken any decisions in
relation to actions by   suppliers to
enforce the terms of selective distribution agreements   where such actions are aimed at preventing
sales by unauthorised   buyers or sales
by authorised buyers in an unauthorised manner?

The Belgian authorities have issued
several decisions in relation to   actions
by suppliers to enforce a selective distribution system (eg,   Liège Court of Appeal, 19 February 2001, Beauté
Prestige International   ao v Makro,
Jaarboek Handelspraktijken en Mededinging  
2001, page 817; Antwerp Court of Appeal, 22 November 1995,   Van Sloun Juweliers v Les must de Cartier
Belgique, Jaarboek Handelspraktijken  
& Mededinging 1995, page 345). In both cases the   suppliers opposed the supply of their
products (ie, perfume) to buyers   that
did not satisfy the selective criteria of the distribution network.   The authorities considered the actions of
the suppliers justified   because the
selective distribution systems were based only on qualitative   and non-arbitrary criteria that reflected
the luxury and prestige   of the
products.

32 Does the relevant authority take into account the possible cumulative   restrictive effects of multiple selective
distribution systems operating   in the
same market?

There is no case law known to us
explicitly dealing with the cumulative   restrictive
effects of multiple selective distribution systems operating   in the same market.

33 Has the authority taken decisions dealing with the possible links   between selective distribution systems and
resale price maintenancepolicies? If so, what are the key principles in such
decisions?

The Mons Court of Appeal, ruling on
the legality of a selective distribution  
system, was of the opinion that a clause which required the   prior approval by the seller of
advertisements placed by the buyer,   could
be prohibited if it constitutes a form of indirect control of   the prices, the number and the frequency of
the advertisements and   the reductions
offered (Mons Court of Appeal, 6 September 2004,   Chanel SAS ao v SA Makro, DAOR 2005,
page 48).

Another decision of the Brussels
Court of Appeal established the   illegality
of a selective distribution system used by holiday centres.   The distribution network did not respect the
conditions of objectivity   and equality
of the qualitative selection criteria on the basis of which   the distributors were selected. Moreover,
the court held that given   that resale
prices were imposed on the resellers, the selective distribution   network was prohibited per se (Brussels
Court of Appeal, 22   April 1999, SA
Club Méditerranée v SA Actimo and SA Eole, JLMB   1999, page 1240 and TBH 1999, page 418).

34 How is restricting the buyer’s ability to obtain the supplier’s
products   from alternative sources
assessed?

Please see question 23. The Belgian
regime is entirely in line with the   EU
regime in this respect (eg, Brussels Court of Appeal 29 October   2002, Etienne Decock v Danny Claerhout en
Louis De Ketelaere,   Jaarboek
Handelspraktijken en Mededinging 2002, page 951).

35 How is restricting the buyer’s ability to sell non-competing products   that the supplier deems ‘inappropriate’
assessed?

Please see question 23. The Belgian
regime is entirely in line with the   EU
regime in this respect.

36 Explain how restricting the buyer’s ability to stock products
competing   with those supplied by the
supplier under the agreement is assessed.

Please see question 23. The Belgian
regime is entirely in line with the   EU
regime in this respect.

37 How is requiring the buyer to purchase from the supplier a certain   amount or minimum percentage of the contract
products or a full   range of the
supplier’s products assessed?

Please see question 23. The Belgian
regime is entirely in line with the   EU
regime in this respect.

38 Explain how restricting the supplier’s ability to supply to other   resellers, or sell directly to consumers, is
assessed.

Please see question 23. The Belgian
regime is entirely in line with the   EU
regime in this respect.

39 To what extent are franchise agreements incorporating licences of   IPRs relating to trademarks or signs and
know-how for the use and   distribution
of products assessed differently from ‘simple’ distribution   agreements?

Please see question 23. The Belgian
regime is entirely in line with the   EU
regime in this respect.

40 Explain how a supplier’s warranting to the buyer that it will supply   the contract products on the terms applied
to the supplier’s mostfavoured   customer
or that it will not supply the contract products on   more favourable terms to other buyers is
assessed.

Please see question 23. The Belgian
regime is entirely in line with the   EU
regime in this respect.

41 Explain how a buyer’s warranting to the supplier that it will
purchase   the contract products on terms
applied to the buyer’s most-favoured   supplier
or that it will not purchase the contract products on more   favourable terms from other suppliers is
assessed.

Please see question 23. The Belgian
regime is entirely in line with the   EU
regime in this respect.

classid="clsid:38481807-CA0E-42D2-BF39-B33AF135CC4D" id="ieooui">

Notifying agreements

42 Outline any formal procedure for notifying agreements containing   vertical restraints to the authority
responsible for antitrust   enforcement.

Since the entry into force of the
new Competition Act on 1 October   2006,
there is no longer a formal procedure for notifying agreements   containing vertical restraints to the
Belgian competition authorities.   Authority
guidance

43 If there is no formal procedure for notification, is it possible to
obtain   guidance from the authority
responsible for antitrust enforcement   or
a declaratory judgment from a court as to the assessment of a   particular agreement in certain
circumstances?

The Competition Act does not provide
for the right nor the possibility   of
obtaining guidance from the competition authorities on particular   vertical restraints. In practice, the
prosecutors or the director general   (or
both) may be willing to provide their view informally. Such views,   however, are not binding on the Competition
Council.   Complaints procedure for
private parties

44 Is there a procedure whereby private parties can complain to the   authority responsible for antitrust
enforcement about alleged unlawful   vertical
restraints?

Complaints of antitrust
infringements, including vertical restraints,  
can be filed with the College
of Competition Law Prosecutors.
The   mandatory form and content of the
complaint are determined by the   Royal
Decree of 31 October 2006 which prescribes the use of a PK   Form (MB 22 November 2006, page 64.624 or
www.ejustice.just.   fgov.be/cgi_loi/change_lg.pl?language=fr&la=F&cn=2006103134&   table_name=loi).   The form enumerates a limited number of formal and material   requirements to be fulfilled and information
to be provided (description   of the
practice, the nature of the products, market positions, the   alleged infringements, etc).

If the prosecutor considers that the
complaint is not justified, he   can
reject it. The complainant can appeal this decision to the Competition   Council within 30 days. If the prosecutor
considers that the   complaint is
justified, the Competition Council will decide the case   on the basis of the prosecutor’s report and
a hearing. There is no legal   time limit
within which the prosecutor or the Competition Council   has to make his or its decision, and the
procedure may take years.   However,
interim measures can be applied for. And, depending   on the circumstances, proceedings may be
speeded up by the   authority (for
example the Football TV Rights case in 2005 where   the investigation began on 21 June 2005 and
the decision was made   on 29 July 2005,
before the start of the new football season (29 July   2005, Case 2005-I/O-40).

Enforcement

45 How frequently is antitrust law applied to vertical restraints by the   authority responsible for antitrust
enforcement? What are the main   enforcement
priorities regarding vertical restraints?

The competition authority used to
allocate most of its resources to   merger
review proceedings, to which strict deadlines apply. Since the   increase of the thresholds for Belgian
merger control and the entry   into force
of the new Competition Act on 1 October 2006, more   resources have become available for the
investigation of restrictive   practices,
including vertical agreements. However, it seems that the   authorities are focusing more on hard-core
cartels and abuses of   dominant
position. To date, very few rulings on vertical agreements   have been made.

The ordinary courts, however,
frequently apply antitrust law to   vertical
restraints, especially in cases regarding resale price maintenance,   exclusivity and non-compete undertakings in
distribution   agreements.

46 What are the consequences of an infringement of antitrust law for the   validity or enforceability of a contract
containing prohibited vertical   restraints?

Antitrust law is considered to be
part of public order law. Therefore,   the
agreements or decisions forbidden under article 2(1) of the   Competition Act are automatically null and
void under article 2(2)   of the
Competition Act. This nullity is an absolute nullity, which   works ex tunc.

Under Belgian law, the severability
principle applies and therefore,   in
principle, only the prohibited clauses become automatically   null and void and not necessarily the entire
agreement (eg, Antwerp   Court of Appeal, 29 March 2010, Dubraco v
Bauer Kompressoren,   Dräger Medical Belgium and Dräger Safety Belgium,
RCB 2010   (2), page 138). The nullity of
the contractual provision only leads   to
the nullity of the agreement if the null and void provision is inextricably   linked to the remainder of the agreement in
view of the   will expressed by the
parties and the structure of the agreement (eg,   Brussels Court of Appeal, 28 June 1995, Aral
België NV v Esso NV   and Esso
Benelux NV, Jaarboek Handelspraktijken en Mededinging   1995, page 576).

Previous case law explicitly stated
that the nullity of the clause   breaching
antitrust law was absolute, and the duration of a non-   compete  
clause in breach of antitrust law cannot be reduced by a   judge to a legal duration (eg, Antwerp Court
of Appeal, Limburgse   Drankencentrale
NV v Brouwerij Haacht NV, Jaarboek Handelspraktijken   en Mededinging 2009, page 998). However, an
opinion   of the Competition Council and
a judgment of the Brussels Court of   Appeal
have also allowed the excessive duration of a non-compete   clause to be reduced by a judge to a
duration that would be valid   under
antitrust law (eg, Brussels Court of Appeal, Power Oil
NV   v DDD Invest NV, Jaarboek
Handelspraktijken en Mededinging   2006,
page 773).

47 May the authority responsible for antitrust enforcement directly   impose penalties or must it petition another
entity? What sanctions   and remedies can
the authorities impose? What notable sanctions  
or remedies have been imposed? Can any trends be identified in this   regard?

The Competition Council can impose
administrative fines of up to 10   per
cent of the annual turnover of the undertaking (Belgian turnover   and turnover realised from exports) and
penalty payments of a fixed   amount per
day that cannot exceed 5 per cent of the average daily   turnover of the undertaking, subject to the
decision. The Competition   Council can
decide on the merits, but also impose provisional   measures and endorse engagements offered by
the parties. The Competition   Council
cannot award damages.   Parties wishing
to obtain damages have to introduce a claim  
before the ordinary courts, which will take a decision on the merits,   and may grant provisional measures or a
cease-and-desist order, with   penalty payments and publication measures. The
ordinary courts   cannot, however, impose
administrative fines or penalties.   To
date, hardly any fines have been imposed by the competition   authorities for vertical restraints.
Ordinary courts have ordered   cease-and-desist
orders, mostly accompanied by periodic fines.  
Since 2005, the Competition Council has also started to endorse   engagements (eg, Competition Council, 30
November 2005, 2005-I/   O-52, Distri-One
v Coca-Cola Enterprises Belgium,
and Competition   Council, 31 August
2006, 2006-I/O-12, Banksys v Unizo/Fnucm).   Given the increased number of dawn raids
carried out by the   competition
authorities and the general increase in the number of   investigations carried out by the
Directorate General for Competition,   an
increase in the number of decisions on restrictive practices   has already led to a significant increase in
the amount of fines   imposed by the
competition authority.

Investigative powers of the authority

48 What investigative powers does the authority responsible for
antitrust   enforcement have when
enforcing the prohibition of vertical restraints?

The competition authorities have
investigative powers that closely   mirror
the powers of the European Commission. They can request   information from the parties concerned, as
well as from third parties.   They can
carry out dawn raids on business premises and vehicles and,   with the authority of an examining
magistrate (juge d’instruction),   on
private homes and vehicles. During these dawn raids they can take   copies of documents, take oral or written
statements, seize goods and   seal
private and business premises. The College
of Competition
Law   Prosecutors
can also launch sector enquiries.

Private enforcement

49 To what extent is private enforcement possible? Can non-parties   to agreements containing vertical restraints
obtain declaratory   judgments or
injunctions and bring damages claims? Can the parties   to agreements themselves bring damages
claims? What remedies are   available?
How long should a company expect a private enforcement   action to take?

Proceedings based on competition law
can be started to invalidate   contractual
commitments, to obtain indemnification of damage suffered   as a result of an infringement of
competition law or to obtain   the
discontinuation (or prevention) of allegedly anti-competitive   practices.

The Competition Act does not contain
any provisions on such   private actions.
Therefore, the general principles of contract law,   judicial law and tort law will be
applicable. In order to obtain damages,  
the fault, damage and causal link between the fault and the   damage have to be demonstrated. Proceedings
on the merits to   obtain damages may
take several years. Therefore, until recently,  
private enforcement in Belgium
very often took the form of actions   for
cease-and-desist orders on the basis of the Market Practices Act   (replacing the Trade Practices Act that
contained a similar enforcement   procedure
on 6 April 2010).

Given that the concept of ‘unfair
market practices’ in the Market   Practices
Act also covers infringements of the antitrust rules of the   Competition Act, the presidents of the
commercial courts can issue   cease-and-desist
orders, possibly subject to periodic penalty payments   in case of non-compliance and publication
measures, on the   basis of the Market
Practices Act for breaches of antitrust law. Such   proceedings allow the victim of the
restrictive practices to obtain the   termination
of the practices in a very short time period (between a   few days and a couple of weeks). The
commercial court granting a   cease-and-desist
order on this basis is, however, not entitled to award   damages.

Other issues

50 Is there any unique point relating to the assessment of vertical   restraints in your jurisdiction that is not
covered above?

No