On 8 June 2015, the Belgian Competition Authority (Belgische Mededingingsautoriteit / Autorité belge de la concurrence) ("BCA") lifted the conditions imposed four years ago on Proximus (formerly called Belgacom) in the context of its acquisition of The Phone House.
On 23 December 2011, the former Belgian Competition Council (replaced in 2013 by the current BCA) authorised Proximus, the incumbent telecommunications operator in Belgium, to acquire the telecommunications retail network of The Phone House, provided that Proximus complied with the commitments it had offered. First, Proximus had to divest almost half of The Phone House shops. Second, Proximus had to maintain the multi-operator economic model of the remaining shops, so that Proximus' competitors could keep selling their products through The Phone House shops. Ancillary to this second commitment were the obligations for Proximus to implement a "Chinese walls policy" (preventing Proximus from using competitors' sensitive information obtained through the Phone House) and to report on the functioning of the multi-operators model (See VBB on Belgian Business Law, Volume 2011, No 12, p. 2, available at www.vbb.com).
In May 2015, Proximus requested the removal of the multi-operators model and its ancillary obligations.
The BCA first noted that Proximus satisfied the conditions set out under the 2011 commitments for making such a request, i.e., that (i) the total of the sales of Proximus' competitors through The Phone House network had fallen below the "critical mass" of 30%; and (ii) this fall was due to the own choices of Proximus' competitors. Therefore, Proximus' request could be further examined, in order to determine whether a departure from the multi-operators model would have anti-competitive effects on the upstream market for mobile telephony services and the downstream market for the distribution of products and services of electronic communications, which were found to be most concerned by the commitments.
The BCA noted that the importance of The Phone House distribution channel had strongly decreased since 2011 and that no competing operator sold its products through The Phone House to an extent where the removal of the multi-operator model would be problematic. The BCA even found that "the use by competitors of a distribution channel under Proximus' control is not healthy for the competitive dynamics in the market" and that a shift from this model could actually be pro-competitive. The BCA also considered that the entry into force of the 2012 telecommunications law (which made it easier for consumers to switch operators and thus increased competition and decreased the distributors' fees), the development of joint offers since 2010 (by which operators sell phones together with phone subscriptions) and the development of "bundles" or "packs" (which include several telecommunications services) had decreased the importance of the multi-operator model and favoured the development of exclusive distribution networks. All of this made the transformation of The Phone House into an exclusive distribution channel unproblematic from a competition law perspective.
However, the BCA considered that the transitional period from the multi-operator model to the exclusive distribution model could raise competitive issues, notably if Proximus were to use confidential information acquired through The Phone House or to mislead consumers into believing that The Phone House is still a multi-operator distribution channel providing independent advice.
Therefore, the BCA subjected its decision to lift the multi-operators model commitment and its ancillary obligations to the compliance with four transitional commitments submitted by Proximus, which the BCA will oversee with the assistance of a Monitoring Trustee. First, the operators that still sell products through The Phone House distribution network should be allowed to withdraw quickly from this channel without being financially penalised. Second, consumers should be kept clearly informed of the identity of the operators whose products are still sold through The Phone House. This implies that any reference to an operator which terminates its collaboration with the Phone House should be quickly removed from the shops. Third, as soon as The Phone House shops stop selling any competitors' product, Proximus should announce clearly and publicly that the shops have become Proximus' exclusive points of sale. Lastly, the Chinese walls policy should remain in force during a three-year period starting with the termination of the last agency contract with a competitor.
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