Belgian Competition Authority rejects request to suspend the Bosteels acquisition by AB InBev

In a decision of 21 November 2016, the Belgian Competition Authority (BCA) rejected a request to suspend the planned acquisition of Bosteels, a brewer of specialty beers, by AB InBev. The acquisition was below the EU and Belgian notification thresholds for turnover.

Case

On 08 September 2016, AB InBev announced the acquisition of Bosteels, a brewer of specialty beers. The total turnover of Bosteels amounted to approximately €32m, and remained, therefore, below the EU and Belgian turnover thresholds. As a result, the acquisition fell outside the scope of the EU and Belgian merger control regimes.

Alken-Maes, the second largest Belgian brewer and part of the Heineken group, filed a complaint to the BCA against the planned acquisition. As an interim measure, Alken-Maes requested a suspension of the acquisition pending the review of the complaint.

The Belgian Competition Act provides the ability to request interim measures in cases where there is a prima facie violation of the provisions of the Competition Act regarding restrictive practices. Alken-Maes claimed that on the basis of the Continental Can case, the acquisition of Bosteels amounted to an abuse of dominance in violation of Belgian and EU competition law.

Interestingly, the BCA did not rule out its ability to intervene against non-reportable concentrations on the basis of the prohibition of abuse of dominance contained in the Belgian Competition Act. It did rule out, however, the possible application of Article 102 TFEU to such a scenario.

The BCA strictly defined its jurisdiction. It stated that it will only intervene on an interim basis if there are strong indications that the concentration constitutes an abuse of dominance. In that context, the BCA set out a double test. Firstly, there needs to be prima facie evidence of further specific negative consequences for competition than those that would result from the concentration. Secondly, if such negative consequences are present, they must constitute, prima facie, an abuse which is itself distinct from any effects from the concentration. Should these negative consequences for competition be too closely related to the concentration, the BCA will not intervene.

In this particular case, the BCA held that the double test was not met. It noted that AB InBev had a pre-existing dominant position in the Belgian market, but added that, on the basis of the usual market definitions, its market share would only marginally increase. As a result, the BCA could not establish a prima facie impact distinct from the concentration effect. The BCA applied the same reasoning on the basis of more narrow market definitions. Moreover, it held that other negative consequences alleged by Alken-Maes, such as raising barriers to entry for other competitors or increased buying power, were not demonstrated.

On this basis, the BCA rejected the request for interim measures.

Comment

The most interesting part in the BCA decision is the recognition by the BCA that, in certain well-defined circumstances, concentrations that fall outside of the scope of the Belgian merger control regime may still be subject to review. This is in line with a 2006 Rocco judgment from the Brussels Court of Appeal. The circumstances in which this scenario can occur are, however, very strictly defined. The BCA emphasises in its decision that it is only in very exceptional circumstances that concentrations that do not meet the notification thresholds can be subject to intervention by the BCA.

The standard set by the BCA relates to interim relief cases, which are, in the context of merger control, a very powerful instrument, in that they may halt, at least for an interim period, a planned concentration. The parties now await a final decision from the BCA. It that context, it can be expected that the BCA will apply the same test.