Introduction
2014 remedy package
Non-compliance investigation
In a June 13 2016 decision the Competition Authority held that Nethys, a Belgian utilities and media group, had not complied with certain behavioural merger control remedies that had been imposed on it in 2014. The remedies included confidentiality and reporting obligations. The authority imposed a €63,296 fine.
On March 26 2014 the Competition Authority conditionally approved a concentration which consisted of Nethys's acquisition of Editions de l'Avenir, a Belgian media group. The deal included l'Avenir Advertising, Editions de l'Avenir's advertising branch. The merger formed part of a diversification strategy designed to enable Nethys to become a prominent multimedia group in the French speaking region in Belgium. Traditionally, Nethys had been active as a network operator in the energy and telecommunications sectors.
The remedies that Nethys proposed – and that the Competition Board eventually accepted – were considered to be the answer to the authority's concerns regarding the potential access that Nethys would acquire to the sensitive business information of competitors as a result of its vertical integration with Editions de l'Avenir. The issue was felt to be particularly acute in the electronic communications market, where Nethys is a direct competitor of Proximus and Telenet. The acquisition was thought to give Nethys potential access to information about competitors that wished to take out ads in Editions de l'Avenir's publications.
The first remedy prohibited Nethys from advancing the deadline for the submission of promotional materials by undertakings that want to publish in Editions de l'Avenir. Secondly, the Competition Authority imposed remedies intended to ensure confidentiality following the vertical integration. Nethys committed to providing the authority with a list of the employees responsible for the publication of ads in Editions de l'Avenir's publications within 30 days of the transaction's completion. Nethys also committed to providing the authority with copies of non-disclosure agreements entered into between Editions de l'Avenir and each of the employees concerned within the same time limit. With these agreements the relevant employees would agree not to communicate the information provided by an undertaking offering electronic communication products that competed with those offered by Nethys to:
- any person within Edition de l'Avenir; or
- any undertaking that was part of the Nethys group.
Further, the Competition Authority had to be notified of any relevant changes in employment at Editions de l'Avenir within 30 days and sent a non-confidentiality agreement signed by new employees, if required.
The third remedy included a reporting obligation. On January 31 each year Nethys had to provide the Competition Authority with an audit report conducted by an independent third party regarding Nethys's compliance with the remedy package.
More than a year after the authority's clearance decision neither the information defined in the second remedy nor the annual report had been filed. In May 2015 the authority requested that Nethys provide information regarding its compliance with the remedies. On June 5 2015 Nethys sent a list of employees responsible for publications in Editions de l'Avenir and the non-confidentiality agreements signed by them. The agreements were dated May 27 2015. In June 2015 Nethys sent the audit report to the authority. The report stated in a general manner that the remedies had been complied with during the review period.
The Competition Authority's prosecutor opened an investigation into non-compliance with the remedies that had been imposed. The prosecutor took the view that putting the remedy package in place more than a year after the clearance decision – and only as a result of the authority's initiative – constituted a serious infringement of the remedy package. The prosecutor noted that Nethys's behaviour constituted a serious impediment to the efficacy of the authority's decision, even if it transpired that no anti-competitive effects could be established as a result of the non-compliance.
The Competition Authority confirmed that non-compliance with merger control remedies constitutes a serious infringement by definition at least. It eventually concluded that Nethys's infringements were serious given the long period of non-compliance with the remedies and the fact that not imposing a fine on Nethys would undermine the authority's power to dissuade other undertakings in the future. However, the authority accepted two extenuating circumstances:
- Nethys's immediate recognition of its shortcomings; and
- the lack of any impact on competition.
The Competition Authority explained at length its fine-setting method in cases of this type, which is in line with the reasoning followed in other recent merger control decisions in which fines have been imposed. The outcome was a fine of €63,296.
