While largely based on the European Commission (EC) guidelines on horizontal cooperation agreements, the BCA Guidelines introduce some novelties that are directly relevant to businesses operating in or with exposure to the Belgian market.
General framework for self-assessment
Sustainability agreements are agreements between undertakings that pursue one or more sustainable development objectives, for example combating climate change, limiting the use of natural resources, reducing food waste, or ensuring animal welfare.
The BCA Guidelines recognize that such agreements are not, as such, prohibited under antitrust law and set out a framework for self-assessment.
A first step is to consider whether an agreement falls outside the prohibition on anticompetitive agreements (Article 101(1) TFEU and its Belgian equivalent Article IV.1 of the Code of Economic Law (CEL)). To this end, the BCA Guidelines identify several categories of sustainability agreements that are unlikely to restrict competition:
- Compliance agreements aimed at meeting binding legal requirements of international, EU or national origin (even if these requirements are not fully implemented or enforced in the EU or in Belgium)
- Agreements relating to purely internal corporate conduct
- Agreements sharing information over the sustainability practices of suppliers or distributors
- Agreements raising consumers’ awareness of the impact of their consumption habits
A particular type of sustainability agreements are so-called “sustainability standardization agreements.” These are forms of collaboration between competitors that define rules, characteristics, or requirements for products and processes to meet sustainability goals. They fall outside the scope of Article 101(1) TFEU when they provide for open participation and voluntary compliance, set only minimum (and not maximum) requirements, limit information exchange to what is proportionate, ensure non‑discriminatory access to the standard, and do not give rise to significant restrictions of competition.
If a sustainability agreement falls within the scope of Article 101(1) TFEU and potentially restricts competition, it must be assessed under a traditional two-step approach: first, whether it restricts competition by object or by effect, and second, whether it qualifies for an exemption under Article 101(3) TFEU.
For this exemption to apply: (i) the agreement must generate efficiency gains, and those gains must be passed on to consumers; (ii) the restrictions must be indispensable; and (iii) the agreement must not eliminate all competition.
As regards consumer benefits, the BCA Guidelines clarify that this concerns all forms of efficiencies, including broader environmental and collective benefits, even where those benefits accrue to a wider group than just the consumers in the relevant product market.
Self-assessment of sustainability agreements in the agri-food sector
Article 210a of EU Regulation No 1308/2013 establishing a common organization of the markets in agricultural products (the CMO Regulation) excludes sustainability agreements in the agri-food sector from the application of Article 101 TFEU provided that: (i) at least one producer of agricultural products is a party to the agreement; (ii) the aim is to apply a sustainability standard higher than mandated by EU or national law; and (iii) restrictions of competition are indispensable to the attainment of that standard.
The EC 2023 guidelines on sustainability agreements of agricultural producers explain how the EC applies those conditions. The BCA Guidelines contain even more detailed guidance on the conditions, further illustrating that the agri-food sector is a key focus of the BCA.
Where a sustainability agreement in the agri-food sector does not meet the conditions set out in Article 210a CMO Regulation, for example, because it does not involve a producer of agricultural products (such as an agreement between distributor and retailer), the assessment of the agreement will usually take place under Article 101(3) TFEU and/or its Belgian equivalent Article IV.1(3) CEL.
In this scenario, the agreement will lose the benefit of the agricultural-specific assessment under the EC 2023 guidelines, which provides for a lower threshold compared to Article 101(3) TFEU. However, this will not be the case under the BCA Guidelines, which indicate that the BCA will apply Article IV.1(3) CEL in line with the exemption provided for in Article 210a CMO Regulation. The BCA Guidelines therefore allow for a common framework to assess sustainability agreements in the agri-food sector, potentially facilitating agreements at distributor-retailer level.
Comfort through informal advice and enforcement protection
The BCA recognizes that self-assessment may lead to uncertainties and provides undertakings with the option of seeking an informal view on their sustainability agreements.
The BCA Guidelines set out two procedures for informal advice:
An informal opinion from the BCA president can be obtained when: (i) the agreement is not yet concluded and is sufficiently concrete and detailed; (ii) no related practices are under investigation; and (iii) the subject matter concerns a novel legal question of “sufficient economic or societal importance.”
Informal advice can also be obtained from the competition prosecutor (CP) under less stringent conditions: the agreement concerned may have already been concluded and the legal questions involved do not have to be novel.
The BCA Guidelines provide that the CP commits not to open an investigation where it has issued informal advice on an agreement submitted to it in a complete and transparent manner and parties have implemented the agreement in line with the conditions agreed with the CP.
This mechanism goes well beyond the informal guidance offered by other antitrust authorities within the EU and is likely to encourage businesses to proactively engage with the CP to seek certainty on the antitrust treatment of their sustainability arrangements.
Notably, the protection also covers possible anticompetitive effects arising from the agreement in the year prior to its submission to the CP.
If it appears that the agreement may eventually lead to anticompetitive effects, the CP may issue advice on whether the agreement should be altered or terminated and can start enforcement proceedings if the advice is not properly followed.
Relationship with European Commission horizontal cooperation guidelines
Compliance agreements
The EC guidelines on horizontal cooperation agreements exclude from the scope of Article 101 TFEU sustainability agreements aimed at ensuring compliance with internationally binding legislation that is not yet fully implemented or enforced. However, these guidelines are less clear on sustainability agreements aimed at ensuring compliance with EU or national law.
By contrast, the BCA Guidelines make it explicit that the exclusion also applies to sustainability agreements targeting compliance with EU or national legislation under the same conditions.
Information about sustainability practices of suppliers or distributors
Both the EC guidelines on horizontal cooperation agreements and the BCA Guidelines provide that agreements to share information about the sustainability of practices of suppliers or distributors fall outside the scope of Article 101 TFEU provided they do not contain any obligation, restriction, or prohibition of trade relations with those suppliers or distributors.
The BCA is of the opinion that agreements that aim to assess suppliers or distributors based on sustainability criteria also fall outside the scope Article 101 TFEU, provided that the sustainability criteria have been established in an open, transparent, and non-discriminatory manner.
Misuse of sustainability claims as an aggravating factor
The BCA Guidelines highlight that the use of sustainability claims to cover anticompetitive conduct is likely to be an aggravating factor in determining the severity of any penalty.
In this regard, the BCA has adopted a stronger position than the EC guidelines on horizontal cooperation agreements, which acknowledge the risk of sustainability standards used to disguise anticompetitive conduct, but do not explicitly link them to increased fines (although do not exclude this).
Key takeaways
- Clarity. The BCA Guidelines clarify that compliance agreements also cover national and EU law. More broadly, the BCA Guidelines provide clear examples of agreements and conduct that fall inside or outside the scope of Article 101 TFEU, making it a helpful tool for businesses and in-house legal counsel.
- Procedural innovations. The BCA’s informal advice procedures and the CP’s non-enforcement commitment are important procedural mechanisms. Businesses unsure about their sustainability cooperation have a path to legal certainty and even protection from enforcement action.
- Misuse of sustainability claims. Sustainability standards used to cover anticompetitive conduct will not only lose the benefit of an assessment under the BCA Guidelines but are also likely to attract heavier penalties.
- No free pass. Both the BCA and the EC guidelines on horizontal cooperation agreements set out a detailed framework for assessing the compatibility of sustainability cooperation with antitrust rules. Sustainability agreements can only benefit from an exclusion or exemption from the application of antitrust law when certain conditions are met. A sustainability objective should not be considered as an easy way out of antitrust concerns.
