First application of Towercast in Belgium and merger filing exemption for certain hospital merger
The Belgian Competition Authority has applied the Towercast case law in a first case in Belgium. As a result, one of the leading telecom operators, Proximus, divested a recently acquired smaller telecom operation. The Belgian legislator has recently exempted certain ‘smaller’ mergers between hospitals from the merger filing obligation in Belgium. The question is whether the BCA may again try to apply the Towercast case law, to such exempted hospital mergers.
In the case Proximus/EDPnet, the Belgian Competition Authority (“BCA”) made a first application of the Towercast case law.
EDPnet NV and EDPnet BV (together “EDPnet”), two telecom operators which are active in Belgium and the Netherlands respectively were in financial difficulty and had to undergo judicial reorganization in 2023 to transfer their company assets under judicial authority.
According to the Brussels Enterprise Court, Proximus, a Belgian telecom operator (hence, a competitor of EDPnet), appeared to have submitted the best bid to acquire EDPnet. The Belgian Institute for Postal Services and Telecommunications ("BIPT") and Citymesh (another competitor) objected to the sale decision and sought the Enterprise Court to examine whether Proximus’s acquisition of EDPnet could distort competition. The Enterprise Court held that: (i) parties did not have to notify the acquisition to the BCA because the deal did not meet the merger control thresholds and (ii) there was not enough evidence to determine whether the transaction constitutes prima facie abuse of Proximus’s dominant position.
However, on the same day as the Enterprise Court’s ruling, the BCA – by referring to the CoJ’s earlier Towercast judgment – opened ex officio proceedings on behalf of Proximus regarding the acquisition of EDPnet’s assets to determine if there could be any abuse of dominance.
The BCA, on the basis of a provisional measure decision – a prima facie ruling – held that Proximus’s acquisition of EDPnet’s assets violated competition law as this acquisition amounts to a prima facie abuse of a dominant position. The BCA considered that it was not unreasonable to assume that Proximus’s only major competitor on the market for detail and wholesale broadband Internet would be eliminated because of the acquisition. The BCA’s ruling therefore countered the decision of the Enterprise Court, which found that there was no a priori violation of competition law. In this regard, the BCA pointed out that it is not bound by court decisions because of the powers given to it as a national competition regulator.
BIPT and Citymesh had lodged an appeal against the Enterprise Court’s decision, but it was not adjudicated as they ultimately withdrew the appeal. In the end, Proximus decided to sell EDPNet to Citymesh. This led to the closing of the competition law investigation into the deal.
Since then, the BCA has pointed out that the Towercast case-law could be applied in several scenarios. One such possible scenario to which it pointed are mergers in the hospital sector that would be exempt from merger control following a recent new Act of Parliament that exempts hospital mergers from merger control filing if the transaction meets the all of the following conditions: (i) the hospitals concerned achieve a turnover of less than EUR 900 million in Belgium collectively; and (ii) less than two of the recognized hospitals concerned each achieves a turnover of at least EUR 250 million in Belgium.
