Following the triennial review of the merger control thresholds that are subject to the provisions of Belgian law, the Belgian Competition Authority (“BCA”) sees no reason to modify the merger control thresholds. The results of its assessment have been published on the BCA’s website and in a press release.
The Belgian jurisdictional thresholds are turnover based. A concentration must be notified if all parties concerned have an aggregate consolidated turnover in Belgium in excess of €100 million and if at least two of the parties each generate a turnover in Belgium in excess of €40 million.
The assessment carried out by the BCA takes place at a time when the effectiveness of this kind of purely turnover-based jurisdictional thresholds has been questioned by various national competition authorities and the European Commission. In fact, there has been recent debate about whether these thresholds are sufficient to include all concentrations that could potentially have an impact in the internal market. In particular, there have been proposals to complement the existing thresholds using alternative criteria in order to reflect transactions in certain sectors, such as digital services, where the acquired company (e.g. a young and innovative start-up), while having generated little turnover as yet, may have high market potential, reflected in a high purchase price.
The German legislator paved the way for the introduction of such modified merger control thresholds, recently adding a so-called ‘value of transaction test’, whereas before only the turnover of the parties was taken into consideration. In cases where the turnover-based thresholds are not met, a merger still needs to be notified if the ‘value of the consideration’ (i.e. the considered price to be paid in exchange for the target) exceeds €400 million and the target is ‘substantially active’ in Germany.
However, according to the BCA, the relatively high proportion in Belgium (compared with neighbouring countries) of notified transactions leading to a full investigation or a clearance with commitments suggests that the – high – thresholds applied in Belgium allow the BCA to focus on those concentrations that have a potentially harmful effect on the market and therefore the BCA can cut back on resources dedicated to merger control.
The BCA also considers that examples of mergers falling below the notification thresholds that would have had an effect on the market do not, on their own, make a case for modifying or lowering the notification thresholds. If such modification were to be envisaged, the BCA would suggest lowering the thresholds in certain specific sectors or asking companies to inform the BCA about concentrations that are significant in the Belgian market (criteria to be defined). In this context, it is worth recalling that the Belgian merger control regime used to provide both a turnover-based threshold and a market share threshold, but since the amendment of the Competition Act in July 1999, the latter was abandoned.
The BCA finally suggests that any proposed change to the notification thresholds should be subject to stakeholder consultation.
Joëlle Froidmont, Senior Associate, email@example.com