Belgian Competition Authority imposes interim measures on ABB Industrial Solutions

On 3 September 2018, the Competition College of the Belgian Competition Authority imposed interim measures on ABB Industrial Solutions regarding lids for electricity meter boxes.

The request for interim measures was lodged by TECO in the context of a call for tenders organized by Eandis. It followed a former complaint by TECO against GE Industrial Solutions concerning several alleged abuses of dominant position.

GE Industrial Solutions, now ABB Industrial Solutions following its recent takeover by ABB Group, had a monopoly on the production of lids for intelligent electricity meter boxers and was selling those lids to third parties at a higher price than the one offered to Eandis in the tender concerned.

The Competition College assessed the request and held it to be well founded. It considered that it was “not manifestly unreasonable to assume prima facie” that there was discrimination and other forms of abuse in the pricing of these lids offered to TECO and other customers relying on ABB for these lids.

The measures imposed on ABB include the following:

1. ABB must apply price reduction also on the products it sells in competition (public tenders) to the lids on which it has a monopoly.
2. ABB must also apply to the prices of the lids in question the price rebates granted for electricity boxes or their components regardless of the context of the order, and it must not impose price increases that are not objectively justified.
3. ABB must commit to executing orders for lids according to the FIFO principle whatever the context of those orders, including for lids that ABB uses itself for the production of electricity meter boxes.

ABB can challenge this decision before the Market Court.

For reminder, to be in a dominant position is not in itself illegal. A dominant company is entitled to compete on the merits as any other company. However, companies that hold a dominant position in a given market may not abuse that position, for example by charging unfair prices, by limiting production, or by refusing to innovate to the prejudice of consumers. Therefore, a dominant company has a special responsibility to ensure that its conduct does not distort competition. The responsibility is even greater when the company has a monopoly.

Undertakings whose interests have been harmed can ask the Competition College to apply interim measures suspending such practices if they are urgently needed to prevent serious, imminent and difficult to overcome damages to the applicant undertakings or if the practices in question are not in the general economic interest. A complaint on the merits must also be lodged prior to or at the same time as the request for interim measures.

The Belgian Competition Authority will now pursue the investigation on the merits of TECO’s complaint. If the complaint is well founded (which is possible, given the position of the Competition College), during the investigation (but before filing the draft decision) the Investigation and Prosecution Service can ask ABB if it wants to initiate discussions for reaching a settlement (i.e. an agreed settlement). To reach a settlement, ABB will have to acknowledge the existence of an infringement, admit its responsibility and accept the indicated penalty. The Investigation and Prosecution Service may then reduce the fine by 10%.

If the settlement is declined, the case will be presented to the Competition Council, which may impose fines and penalties of up to 10% of the annual turnover of the company.