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News & Knowledge

Belgium: Major change in the regulation of B2B relations

12th April 2019
Grégory Sorreaux and Catherine Thiry - THALES

Starting from the observation that the current provisions of the Code of Economic Law would not make it possible to ensure an effective level of protection for companies in a position of weakness or even economic dependence on other companies, the Belgian legislator adopted on 21 March 2019 a new law introducing three sets of new rules into the Code aimed at regulating relations between companies (B2B). In the upcoming months, new provisions on abuse of economic dependence, unfair terms and unfair, misleading or aggressive market practices will come into force. In practice, several of these will fundamentally change the legal framework for business relations. This law will be published in the Belgian Official Journal shortly. Grégory Sorreaux and Catherine Thiry from MSI's legal member firm THALES provide further insight on the new legislation.

A. Abuse of economic dependence
Based on the observation of abusive behaviour in unbalanced relations between companies, the Belgian legislator introduced in the Book IV of the Code of Economic Law (dedicated to the protection of competition) the prohibition to abuse a relationship of economic dependence on another company. This regulation is directly inspired by the French model.

1) How is a position of economic dependence defined?

This notion is defined as follows: a position of subordination of one company towards one or more other companies, which is characterised by two criteria, namely: (1) the absence of a reasonably equivalent alternative available within a reasonable time, on reasonable terms or at reasonable cost, (2) which allows the said company to impose services or conditions which could not be obtained under normal market circumstances.

In order to be able to determine this position, the specific factors to the case may be taken into consideration, such as:

  • the market power of a company;
  • the fact that one company holds a significant share of another company’s turnover;
  • brand awareness, product rarity, consumer purchase loyalty;
  • fear of serious economic disadvantages, reprisals or termination of the contractual relationship (“fear factor”);
  • the regular granting to a company of special conditions which are not granted to other companies in parallel circumstances, such as discounts or special promotions;
  • obtaining benefits without compensation or disproportionate benefits;
  • obtention of apparent abusive conditions under the threat of a sudden termination of commercial relations:
  • subjecting a business partner to penalties for late delivery in the event of force majeure;

The notion of economic dependence is therefore distinct from the notion of dominant position. Likewise, a situation of economic dependence may well exist in the case of a company that is not a SME, even though it is primarily this category of companies that the law seeks to protect, particularly in the food retail sector.

Download the full article here (pdf)

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