Member Article

In two recently published decisions, the College of Prosecutors (‘Auditorat’) ruled on requests for interim measures from Belgian Posters and Clear Channel against the granting by the Brussels-Capital Region of a public tender contract to JC Decaux (‘JCD’).

Belgian Posters and Clear Channel claimed that JCD had a dominant position (or even a monopoly) in the market for the
provision of so-called ‘urban advertisement furniture' (e.g. public-transport- shelters, signposts, outdoor advertising boards,
etc.). JCD would have abused its dominant position to win a tender contract from the Brussels-Capital Region and, in consequence, would have obtained a dominant position in the market of bicycles for public use. Furthermore, JCD would have abused its position by "tying" these markets and using profits from its urban advertising activities to finance its public bicycles activities.

The facts of the case were as follows: In the spring of 2008, the Brussels-Capital Regional government invited tenders for the
setting-up of an automated bicycle hire system for the public in the Brussels-Capital Region. Three offers were submitted and the contract was awarded to JCD on 5 December 2008. The two unsuccessful bidders immediately protested about this decision.

The tender document explicitly specified that offers that did not require any financial intervention by the Brussels-Capital
Regional government would be preferred. It encouraged such offers by offering the successful bidder the right to sell advertising space on billboards to finance the system. All three bids for the bicycle system were linked to the use of this outside advertising space. In 1999, the Brussels' City Council had accepted a similar bid for the supply, installation and maintenance of urban
furniture from JCD. The contract has a duration of 15 year, during which JCD holds exclusive rights on the supply, installation and
maintenance of urban advertisement furniture. In 2006, the contract was amended to cover, until 2014, the supply and management of a network of locations where the public could hire bicycles. As explained above, Belgian Posters and Clear Channel
claimed that JC Decaux has abused its dominant position in several ways and requested interim measures.

The Prosecutor first investigated whether the Brussels-Capital Regional government could be considered to be an
"undertaking" under Belgian competition law. Without conclusively defining the markets, the Prosecutor ruled that the regional government had been active in at least two ‘markets': the provision of bicycles to the public and urban outdoor advertising. The Prosecutor stated that it was improbable that the regional government had been pursuing an economic objective when it granted the concession for the provision of bicycles, but that it had indirectly acted as an economic player. After all, the Region denied itself the income from the urban advertisement billboards by granting the concession. In the Prosecutor's opinion, it was not possible to avoid the Competition Act by simply combining the two ‘markets'. Consequently, the regional government could be regarded
as an "undertaking" in the tender procedure. In a rather short analysis, the Prosecutor ruled that the link between the two markets was based on a political choice by the regional government, which was aiming to reduce its costs. On this basis, the Prosecutor concluded that the decision to link the markets did not at first sight fall within the scope of the prohibition of Article 2 of the Competition Act (the national equivalent of Article 81 of the EC Treaty) and also did not find any other prima facie infringement of the tender procedure under this Article.

Despite the fact that the arguments of Belgian Posters and Clear Channel were also based on JCD's abuse of its dominant
position, the Prosecutor only stated in its decision in one single sentence that the investigation had not revealed any abuse of a
possible dominant position and therefore also dismissed the requests for interim measures based on this ground.

The Prosecutor did not even make an attempt to define the relevant market in the present case. It has to be noted that in 2002
Clear Channel and JCD already clashed during proceedings before the Belgian competition authorities. In a similar case, Clear Channel requested interim measures to stop JCD's alleged predatory pricing practices when bidding for urban furniture. In this decision, the president of the Competition Council did investigate whether JCD had a dominant position. He stated that the market was national and could be situated somewhere between the market of outdoor advertisement - the widest- and the market of advertisement on urban furniture obtained by tender - the strictest. It was concluded in 2002 that JCD did not seem, at first sight, to have a dominant position. Interestingly, the French Conseil de la Concurrence has had the opportunity to discuss the relevant market in its case law. It ruled in its decision of 7 July 1998 (confirmed in 2004) that the market of urban non-advertisement furniture had to be distinguished from the market of urban advertisement furniture because of the differences in the financing thereof. While urban advertisement furniture is traditionally made available to the public without costs in return for the exploitation rights of the advertisement board, the former furniture is usually paid by the authorities. The Prosecutor dismissed the requests for interim
measures in full. At the moment of writing, no decision has been taken in the proceedings on the merits of the case.

 

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