A seller that failed to provide requested information to the Belgian Competition Authority on time in a merger control investigation has been fined €50,000 for obstruction. Beyond the particulars of the case, the decision provides more general guidance on the different types of procedural infringement that can result in fines under the Competition Act and on the calculation of the fine.
Facts
On June 15 2015 De Persgroep notified its acquisition of a number of popular Dutch-language Belgian magazines from the Finnish media group Sanoma to the Competition Authority. The concentration was conditionally approved on August 4 2015 (for further information please see "Competition Authority conditionally approves merger in print magazine market"). The Competition Authority's Investigation Service also highlighted that the seller's behaviour during the investigation could have amounted to obstructing the investigation. The investigators asked the Competition College to impose a fine. However, in line with the approach taken in similar circumstances, the Competition College decided to examine the issue separately.
In a decision dated September 30 2015 the Competition College fined Sanoma €50,000 for obstructing the Investigation Service's merger control review procedure.
The case concerned a request for information that the Investigation Service issued to Sanoma on June 17 2015 for the disclosure of all available information on the substitutability of magazines on the Belgian market for Dutch-language magazines. On June 29 2015 Sanoma informed the investigators that it had no internal or external market research documents relating to the request. However, following an internal inquiry, Sanoma submitted two internal documents discussing price elasticity at 11:41pm on July 8 2015 (ie, the last day of the 20-working day review period in which the Investigation Service must inform the notifying party of its concerns regarding the permissibility of the concentration).
The Competition College considered that the documents which Sanoma provided on July 8 2015 included substantive information regarding market definition and potential theories of harm. Hence, there was no question that the documents contained valuable information relevant to the Investigation Service's assessment of the concentration that should have been provided in response to the request for information. Further, the Competition College took particular offence at the timing of the submission. By providing the documents only just before midnight on the 20th day of the review period, Sanoma rendered the Investigation Service unable to consider the information when stating its concerns.
Decision
The Investigation Service found that Sanoma had obstructed the merger control investigation. The Competition College held that Sanoma should have known that the documents included substantive information required for the Investigation Service's analysis. Further, the documents had been in Sanoma's possession for two working days before they were sent to the Investigation Service and the delay prevented the Investigation Service from considering the documents at the last minute.
The fine imposed on Sanoma was modest, due to a number of attenuating circumstances. The Competition College considered Sanoma's lack of intent and the lack of clear guidance and precedents at the time regarding fines for procedural infringements.
The decision is of a more general interest. For the first time, the Competition Authority has provided guidance on the different types of infringements that can occur in relation to requests for information and their increasing order of severity. Further, it is clear that in the absence of specific guidelines regarding procedural fines, the Competition Authority's general fining guidelines will apply. This approach allows the Competition Authority to consider the financial strength of the infringing undertaking.
Comment
The decision shows that in merger control investigations, the Competition Authority attaches great importance to complete and timely responses to requests for information. Given the strict time limits to which the Competition Authority is subject, requests for information are considered material in the context of the investigation. The Competition Authority clearly expects the parties to a concentration to exercise a special duty of care and will not shy away from fining undertakings which do not act diligently, with or without intent. This was previously illustrated by the €75,000 fine imposed on Belgacom in 2012 for providing incomplete information in the context of a merger case.
For further information on this topic please contact Koen Platteau or Geneviève Borremans at Simmons & Simmons LLP by telephone (+32 2 542 0960) or email ([email protected] or [email protected]). The Simmons & Simmons LLP website can be accessed at www.simmons-simmons.com.
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