Belgian Competition Authority Submits Amicus Curiae Letter in Proximus / EDPnet Case

• 12/04/2024
• News

On 29 March 2024, the Belgian Competition Authority (Belgische Mededingingsautoriteit / Autorité belge de la Concurrence – the BCA) published on its website an opinion (amicus curiae letter) which its Prosecution Service (Auditoraat / Auditorat) had submitted on 1 September 2023 to the Court of Appeal of Ghent (Hof van Beroep te Gent) in the Proximus / EDPnet case (the Opinion) as a complement to an earlier opinion which the BCA had provided to the same court on 2 June 2023.

In March 2023, the BCA began a review of the acquisition of EDPnet by Proximus. The enterprise court of Ghent, Dendermonde section (Ondernemingsrechtbank te Gent, afdeling Dendermonde – the Enterprise Court), had sanctioned this acquisition on 21 March 2023, but this did not prevent the BCA from opening an inquiry into a possible abuse of dominance against Proximus. It did so in the wake of the Towercast judgment which the Court of Justice of the European Union (CJEU) had delivered on 16 March 2023. In that case, the CJEU held that a concentration that does not reach the thresholds for review under EU or national merger control rules may still be investigated under Article 102 of the Treaty on the Functioning of the European Union, which prohibits the abuse by a company of its dominant position (See, VBB on Belgian Business Law, Volume 2023, No. 3).

The BCA alleged that the acquisition by Proximus, the incumbent telecommunications operator, of EDPnet, which competes with Proximus on copper and fibre-optic networks, amounted to an abuse of dominant position contrary to Article 102 of the TFEU and Article VI.2 of the Code of Economic Law (Wetboek van Economisch Recht / Code de droit économique – the CEL). In June 2023, the competition college (Mededingingscollege / Collège de la concurrence) of the BCA even imposed interim measures preventing Proximus from completing its acquisition of EDPnet pending the outcome of the investigation on the merits (See, VBB on Belgian Business Law, Volume 2023, No. 6). This investigation was closed on 6 November 2023, following the Proximus decision to divest EDPnet and sell that business to Citymesh, the aspiring fourth mobile telecommunications operator in Belgium (See, VBB on Belgian Business Law, Volume 2023, No. 12).

The BCA delivered the Opinion in the appeal filed by Citymesh against the judgment of the Enterprise Court sanctioning the sale of EDPnet to Proximus. The BCA took issue with the finding of the Enterprise Court that, while competition law is a matter of public policy, this does not mean that, in the case of a transfer under judicial authority, the court could assume the powers of the BCA in its assessment. According to the Enterprise Court, “nowhere does it appear that the acquisition in itself would constitute a prima facie infringement of competition law” and “it has not been made plausible to the court that once the court will have granted Proximus the authorisation to [acquire EDPnet], the BCA will intervene through interim measures and thus make the acquisition of EDPnet by Proximus impossible”.

In the Opinion, the BCA observed that Article XX.79 CEL expressly provides that, when approving a reorganisation plan in the context of a judicial reorganisation by collective agreement, the court must verify whether there is a risk of violation of public order. The BCA posited that the same obligation “obviously also exists in the context of a judicial reorganisation by transfer under judicial authority, even though this is not expressly provided for in Articles XX.84 to XX.97 CEL”. The BCA added that it is established case law that the competition rules belong to the realm of public policy.

The BCA also pointed out that, in its view, the fact that a merger results from a judicial reorganisation does not preclude the application of the Towercast ruling. It referred to the decision by which the Competition College of the BCA had imposed interim measures on Proximus in June 2023. In that decision, the Competition College had explained that Towercast does not distinguish between concentrations according to the way they came about, as part of a judicial reorganisation or otherwise.

The Opinion will not have any practical impact because CityMesh withdrew its appeal once it had acquired EDPnet following that firm’s divestment by Proximus. However, the Opinion signals the BCA’s tough approach to concentrations that do not meet the thresholds for merger control review but may seem problematic from a competition viewpoint. At the same time, the Opinion seems oblivious to other public policy objectives that play a significant role in judicial organisations and may be in contradiction with pure competition considerations. It will be for the courts to resolve these tensions