Year-in-review: continued impact of Covid-19, energy crisis, and the war in Ukraine
The BCA acknowledges that the Belgian economy has continued to suffer from the consequences of the Covid-19 pandemic in 2021. The crisis and accompanying restrictive measures have impacted various industries, with contact-intensive services among the hardest hit. In addition, the BCA states that the Belgian economy has been shaken up by exceptional surges in energy prices since the 2nd half of last year, particularly affecting the competitive landscape in energy-intensive industries. The economic repercussions resulting from Russia's invasion of Ukraine have further exacerbated the current economic context, according to the BCA, putting a further strain on various industries already facing unprecedented difficulties.
Strategic Priorities for 2022
A first priority for the BCA is the practical implementation of Belgium's law transposing the ECN+ Directive, which entered into force on 17 March 2022. We highlighted some of the key changes introduced by the implementing law in our newsletter earlier this year. Like many other competition authorities in Europe, the implementation of the ECN+ Directive has resulted in a fresh injection of much needed financial resources to better staff the authority and increase its technical capabilities. In terms of additional financial resources, the BCA was granted a significant budget increase of EUR 1.4 million, adding 20% to its total budget.
As a second item of strategic priority, the BCA will focus on the sectors that have been most affected by the pandemic. The BCA will keep a close eye on the impact the crisis has on competition in the distribution markets, the agri-food value chain, financial services, and the healthcare sector (including the distribution of medicines, vaccines, and medical equipment).
A third strategic item on the BCA's agenda is the continued support of efforts (e.g. in the Netherlands and at European Commission level) in applying and developing competition policy to promote a green and circular economy in Belgium.
Priority Sectors for 2022
To ensure an efficient allocation of resources, the BCA has identified several priority sectors. The authority states it will particularly keep an eye on the proper functioning of services markets (with an emphasis on regulated service providers). This includes financial services (e.g. banking and insurance services), legal services, accounting services, security services and quality control. Price inflations in the food industry over the last two decades have made the agri-food industry particularly vulnerable. As a result, the BCA will pay close attention to the functioning of the entire food chain. Special attention will be given to price formation mechanisms, territorial restrictions, and the overall competitive climate in the sector. The BCA will also carefully monitor supply-demand tensions in the energy sector resulting from the recent hikes in electricity and gas prices. To this end, the BCA is in close contact with the CREG, the federal energy regulator in Belgium, as well as with regional regulators.
Additional fields of priority on the BCA's radar are the digitalisation of the Belgian economy, pharmaceuticals, telecoms, and competition in sports.
Analytical Framework for Identifying Priority Violations
The BCA has also given some insights into the principles it uses to set priorities. In a nutshell, the authority is more likely to open a formal investigation if: (i) the potential infringement decision will have a high impact on the market concerned; (ii) a priority sector is concerned; (iii) the investigation has high chances of success; and (iv) the BCA can strike a balance between complexity and the resources necessary to carry out the investigation.
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