Belgian Competition Council Fines Presstalis For Applying Abusive Rebate Scheme

In a decision of 30 July 2012, the Belgian Competition Council held that Presstalis, a French company previously known as Nouvelles Messageries de la Presse Parisienne ("NMPP"), abused its dominant position by applying a rebates scheme that displayed exclusivity and fidelity-inducing features.

NMPP/Presstalis is active in the market for the export of French press products to foreign countries, including Belgium. This export market presents close links with the downstream Belgian market for the distribution of press products, which is the reason why the Competition Council decided to analyse both markets.

From April 2000 to October 2004, NMPP/Presstalis integrated into its general terms and conditions a rebates scheme called "BSC". The scheme consisted in a retroactive rebate of 2.5% granted to publishers that entrusted NMPP/Presstalis with the totality of their press products in the three biggest export markets for the French press (i.e., Belgium, Canada and Switzerland) during 12 consecutive months. Coupled with other discount schemes, the BSC rebate could reach 7.5% for Belgium and Switzerland, and 9% for Canada.

The Competition Council first noted the "considerable market shares" held on a long-lasting basis by NMPP/Presstalis on the market for the export of press products from France, sold on an issue by issue basis. The Council thus considered NMPP/Presstalis to be dominant, a finding that the company did not deny.

Turning to the analysis of the BSC scheme, the Competition Council found that such a rebate scheme had a clear fidelity-inducing aspect as it encouraged the publishers to work exclusively with the dominant company. The Council also observed that NMPP/Presstalis itself presented the rebate scheme to its customers as a fidelity tool, claiming that the ultimate aim of the scheme was to obtain all the publishers' press products for Belgium, Canada and Switzerland.

Further, the Competition Council noted the existence of contractual links between NMPP/Presstalis and AMP, a major distributor of French newspapers and magazines for sale on an issue by issue basis in Belgium (which was also recently fined for abusing its dominant position; see VBB on Belgian Business Law, Volume 2012, No. 6, available at www.vbb.com). NMPP/Presstalis was contractually prevented from choosing another distributor than AMP in Belgium. These links with AMP enabled NMPP/Presstalis to offer to its customers a "package" of services, which reduced the incentive for its customers to deal with competitors. This relationship made it more difficult for NMPP/Presstalis' competitors to access publishers, and also made it more difficult for distributors competing with AMP to gain access to the publishers, as the BSC scheme meant that, in practice, AMP obtained all distribution services (through NMPP/Presstalis). Hence, the contractual links between NMPP/Presstalis and AMP strengthened the restrictive effects of the BSC scheme.

Finally, the Competition Council noted that the BSC rebate scheme could not be justified economically as its anticompetitive effects were not outweighed by any efficiency benefits. In particular, NMPP/Presstalis could not demonstrate the necessity to impose on its customers an exclusivity commitment as a condition to benefit from the rebate scheme. Also, NMPP/Presstalis could not show the existence of fixed costs for export that required to be spread over large quantities of products.

The Competition Council therefore considered that NMPP/Presstalis had abused its dominant position and imposed a fine of EUR 245,530 on the company. The Council nevertheless took into account, as mitigating factors, the excessive duration of the authority's investigation (about 8 years) as well as the fact that the anticompetitive scheme had been abrogated long before the Competition Prosecutor issued his reasoned report. The Council made clear that it did not apply its new Fining Guidelines (See, VBB on Belgian Business Law, Volume 2012, No. 1, available at www.vbb.com) as the hearing in this case took place before their entry into force.