Newsletter 2 | April 2019

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IN THIS ISSUE

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• COMPETITION LAW

• EU GENERAL LAW & LITIGATION

• EU PROCEDURAL LAW

• PUBLIC PROCUREMENT

• REGULATED MARKETS

& INDUSTRIES

• STATE AID

• UNFAIR TRADE PRACTICES

Cases T-691/14 and related - Servier a.o. v. Commission:“Pay for delay” patent settlements once again before the CJEU

The Court of Justice has confirmed that a Member State mayunilaterally revoke its notification to withdraw from the EU inthe light of Article 50 TEU

EFSA’s decisions denying access to toxicity and carcinogenicitystudies on the active substance glyphosate have been annul-led

The Court of Justice has annulled the suspension of a centralbank governor

The General Court has confirmed that the Council did not exceed the limits of its discretion in relation to the choice andevaluation of the criteria for awarding the framework contractfor cybersecurity services

The Brussels Market Court refers questions on the interpretationof the European regulatory framework on the use of the 2 GHzBand to the Court of Justice

National authorities must recover unlawful State aid on theirown initiative

The 28 February 2019 judgment of the Brussels Court of Appeal confirmed the far-reaching powers of national courts inthe context of State aid matters

Belgian legislation on “excess” profit is not a State aid schemeaccording to the General Court

The Brussels Court of Appeal confirmed the misleading character of Mobistar’s comparative advertising for internetdownload and upload speeds

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CONTENT

EU PROCEDURAL LAW

COMPETITION LAW

EU GENERAL LAW& LITIGATION

EU GENERAL LAW& LITIGATION

PUBLIC PROCUREMENT

REGULATED MARKETS& INDUSTRIES

UNFAIR TRADE PRACTICES

STATE AID

STATE AID

STATE AID

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Newsletter 2 | April 2019

EU LAW NEWSLETTER Newsletter 2 | April 2019

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COMPETITION LAW

Cases T-691/14 and related - Servier a.o.v. Commission: “Pay for delay” patentsettlements once again before the CJEU

On 12 December 2018, the General Court of the EU delive-red its judgment in the patent settlement case involving Servier group and relating to its perindopril, a medicine usedfor the treatment of hypertension and heart failure. The caseconcerned the decision of the European Commission to im-pose a fine for anticompetitive practices on the pharmaceu-tical company Servier, which had concluded patentsettlement agreements with generic medicines companies inorder to prevent them from entering the market and contes-ting the validity of the patent.

This judgment contains interesting developments in relationto agreements constitutive of restrictions of competition “byobject”, as well as to market definition in abuse of dominantposition cases.

With regard to the infringements of Article 101 TFUE, theGeneral Court stated that patent settlement agreements arein principle beneficial and do not involve any per se compe-tition law infringement (§§246-252). A further analysis ofthe content of such agreements is nevertheless necessary inorder to examine their real purpose. In the case at hand, theGeneral Court confirmed that the agreements reached by Ser-vier and several of the generic medicines producers were tobe considered as “by object” restrictions of competition, inview of their anti-competitive content. The General Court

pointed out that these agreements contained non-challenge andnon-commercialisation clauses and that the reversed paymentat the core of the settlement did not just cover litigation costs.In such circumstances, the payment in question was thereforeto be considered as an inducement not to compete.

However, the General Court did not uphold the EuropeanCommission’s findings with regard to the agreement enteredinto by Servier and one of the generic medicines producerswhich contained a licence agreement, because it was not es-tablished that the agreement in question was not concludedat arm’s length. Without establishing the existence of an in-ducement, the Commission could therefore not conclude thatthere was a restriction of competition by object. In addition,the General Court considered that there was no restriction ofcompetition by effect and annulled the fines imposed on Ser-vier in respect of that agreement.

As far as the abuse of dominant position is concerned, theGeneral Court considered that the market defined by the Eu-ropean Commission was too narrow. It underlined that thespecificities of the medical sector were to be taken into consi-deration, and that not only pricing aspects were to be consi-dered, but also the therapeutic effects of molecules.Specifically, the demand for prescription medicines is deter-mined for the most part not by the end consumers, but bythe doctors prescribing those medicines, who not only takeinto consideration the price of a molecule but also its effectsand potential secondary effects. In this respect, other mole-cules belonging to the same category (ACE inhibitors) werealso to be considered as substitutable. Given these errors indefining the relevant market, the General Court consideredthat the European Commission wrongly concluded the exis-tence of a dominant position and annulled the fine imposedon the basis of Article 102 TFEU.

The issue of patent settlement is, however, not over, as theCourt of Justice will have to rule on relatively similar ques-tions in an appeal of the Lundbeck judgment (T-472/13) ofthe General Court (in case C-591/61 P) and on a referencefor a preliminary ruling by the Competition Appeal Tribunalin the UK (in case C-307/18).

An appeal was filed against this judgment (C-201/19 P andC-176/19 P).

Please contact Pierre de Bandt, Jeroen Dewispelaere, ChloéBinet or Raphael Boucquey for further information on thiscase and/or for general advice on competition law.

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On 10 December 2018, in Wightman and Others (C-621/18),the Court of Justice of the EU rendered its judgment on the uni-lateral revocation of a notification of an intention to withdrawfrom the EU under Article 50 TEU.

After the British Prime Minister notified the European Councilon 29 March 2017 of the UK’s intention to leave the EU under

Article 50 TEU, several members of the UK, Scottish and Euro-pean Parliament lodged a petition for judicial review so as to de-termine whether the notification could be unilaterally revoked bythe UK. The UK Court of Session referred this question to theCourt of Justice for a preliminary ruling. Due to the exceptionalurgency, the President of the Court of Justice granted the Courtof Session’s request for the expedited procedure.

In its reasoning, the Court firstly pointed out the two objectivesof Article 50 TEU, namely enshrining the sovereign right of Mem-ber States to withdraw from the EU and establishing a procedureto do so in an orderly fashion. Due to the sovereign nature of theright to withdraw from the EU, the notification of a MemberState’s intention to leave can be withdrawn as long as no with-drawal agreement has entered into force or in case of no suchagreement, until the two-year period or any possible extensionas foreseen by Article 50 has expired.

The Court continued that, as no provision governs the revocationof the notification of the intention to withdraw, the same rulesshould apply to the revocation of the notification as to the with-drawal itself. The Court therefore held that a Member State canunilaterally withdraw the notification, in accordance with theconstitutional requirements of that Member State.

Lastly, the Court stressed that a Member State cannot be forcedto leave the European Union against its will, such that the uni-lateral sovereign right to revoke the notification cannot be turnedinto a conditional right subject to the approval of the EuropeanCouncil. This is in opposition to what the Commission and Coun-cil proposed.

Please contact Pierre de Bandt or Bieke Vanmarcke for furtherinformation on this case and/or for general legal advice relatingto Brexit.

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Newsletter 2 | April 2019

EU GENERAL LAW &LITIGATION

The Court of Justice has confirmed that aMember State may unilaterally revoke its notification to withdraw from the EU in thelight of Article 50 TEU

EU GENERAL LAW &LITIGATION

EFSA’s decisions denying access to toxicityand carcinogenicity studies on the activesubstance glyphosate have been annulled

The European Food Safety Authority (EFSA) refused to grantpublic access to several studies on the toxicity and carcino-genicity of glyphosate.

In two judgments of 7 March 2019 in cases T-716/14 andT-329/17, the General Court of the EU established a presumption that the disclosure of information which ‘relates to emissions into the environment’, with the excep-tion of information relating to investigations, is deemed to bein the overriding public interest, compared with the interest to protect the commercial interests of a particular

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Newsletter 2 | April 2019

natural or legal person, with the result that the protection ofthose commercial interests may not be invoked to precludethe disclosure of that information.

In the cases at hand, the General Court examined whetherthe information contained in the requested studies consti-tutes information which ‘relates to emissions into the envi-ronment’ for the purposes of the Aarhus Regulation.

The General Court considered that an active substancecontained in plant protection products, such as glyphosate,is in the course of normal use intended to be discharged intothe environment by virtue of its function, and its foreseeableemissions cannot, therefore, be regarded as purely hypothe-tical. In any event, glyphosate emissions cannot be classifiedas merely foreseeable emissions. Moreover, the requestedstudies formed part of the dossier for the renewal of approvalof the active substance glyphosate.

In that respect, the General Court noted that glyphosate hasbeen listed as an active substance since 1 July 2002. Sincethat date, glyphosate has been authorised in Member Statesand has actually been used in plant protection products. Glyphosate is one of the most widely-used herbicides in theEU. Glyphosate emissions into the environment are thereforea reality. That active substance is present particularly as residue in plants, water and food. Hence, the requested studies are studies which are intended to establish the car-cinogenicity or toxicity of an active substance which is actually present in the environment.

The General Court concluded that EFSA cannot argue thatthe requested studies do not concern actual emissions or theeffects of actual emissions.

With regard to EFSA’s argument that a link with emissionsinto the environment is not sufficient for those studies to becovered by the Aarhus Regulation, the General Court statedthat it is clear from the case law of the Court of Justice thatthe concept of information which ‘relates to emissions intothe environment’ for the purposes of the Aarhus Regulationis not limited to information which makes it possible to assess the emissions as such, but also covers information relating to the effects of those emissions.

Therefore, the public must have access not only to informa-tion on emissions as such, but also to information concerningthe medium to long-term consequences of those emissionson the state of the environment, such as the effects of thoseemissions on non-targeted organisms. The public interest inaccessing information on emissions into the environment isspecifically to know not only what is, or foreseeably will be,released into the environment, but also to understand theway in which the environment could be affected by the emis-sions in question.

By way of consequence, the General Court annulled EFSA’sdecisions denying access to the aforementioned studies.

Please contact Pierre de Bandt or Raluca Gherghinaru forfurther information on this case and/or for general legal advice relating to access to documents of the EU’s institutions.

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EU PROCEDURAL LAW

The Court of Justice has annulled thesuspension of a central bank governor

PUBLIC PROCUREMENT

The General Court has confirmed that theCouncil did not exceed the limits of itsdiscretion in relation to the choice andevaluation of the criteria for awardingthe framework contract for cybersecurityservices

In its judgment of 26 February 2019, the Court of Justice(Grand Chamber) annulled the decision of the Latvian autho-rities to suspend the governor of its central bank (joinedcases C-202/18 and C-238/18).

Last year, Latvia suspended the governor of its central bankfollowing a criminal investigation into a bribe accepted bysaid governor. Both the governor and the European CentralBank (ECB), where the governor is member of the GoverningCouncil, challenged the suspension before the Court of Justicebased on Article 14.2 of the Statute of the ECB and ESCB.

This provision confers jurisdiction on the Court of Justice tohear cases involving decisions to relieve a central bank governor from office. It was the first time the Court of Justicewas asked to rule on the basis of this provision.

In its ruling, the Court of Justice found, first of all, that theabovementioned provision also applies to temporary prohibi-tions on performing the duties of central bank governor. Subsequently, it refuted Latvia’s arguments that it lacks ju-risdiction to review national law enforcement decisions andthat asserting jurisdiction would significantly impact criminalinvestigations. In this respect, it particularly stressed that theright to contest this kind of decision is intended to ensurethat central bank governors can carry out their tasks withinthe EU institutions independently without political influencefrom national authorities.

Moreover, although the ECB requested a declaratory judg-ment, the Court of Justice ruled that the legal remedy inquestion should be the annulment of the suspension. It argued that the enforcement of a declaratory judgementwould be dependent on national authorities and thereforewould not have the intended effect. This ruling is unique asthe Court of Justice does not in principle have jurisdiction toannul national measures.

The suspension was finally annulled because Latvia had notadduced sufficient indications of the serious misconduct im-puted to the governor.

Please contact Pierre de Bandt, Raluca Gherghinaru or JorenVuylsteke for further information on this case and/or for general legal advice relating to EU litigation.

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Newsletter 2 | April 2019

In its judgment of 17 January 2019, the General Court ofthe EU dismissed the action for annulment filed by Proximusagainst the decision of the Council of the EU of 23 December2016 to award the framework contract for the provision ofcybersecurity services to several EU institutions, agenciesand bodies. In this context, it ruled that the financial assess-ment method used by the Council in the aforementionedinter-institutional tender procedure served to select the mosteconomically-advantageous tender.

More specifically, the General Court found that the aim of thedecision to divide the contract into four service packages and

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award a score for each service package was to respond to thespecific nature of the framework contract in question and theobjectives pursued in that context. Moreover, the GeneralCourt stressed that, in the case at hand, it was relevant forthe contracting authority to assess the tenders at the level ofeach service package in order to ensure that the candidateswould allocate the necessary resources to them in their ten-der.

As regards the mathematical formula itself, the General Courtruled that it expressed the mathematical deviation betweenthe financial tender made by a tenderer in respect of a givenservice package and that made by other tenderers in respectof each service package. The greater the deviation was, thehigher the financial evaluation bonus or penalty became. Inthis respect, the General Court confirmed that the formulaawarded, in all cases, the best financial score to the lowesttender in respect of each service package.

Please contact Pierre de Bandt, Peter Teerlinck or RalucaGherghinaru for further information on this case and/or forgeneral legal advice relating to EU public procurement.

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REGULATED MARKETS& INDUSTRIES

The Brussels Market Court refers questions onthe interpretation of the European regulatoryframework on the use of the 2 GHz Band tothe Court of Justice

Viasat, a satellite operator assisted by & DE BANDT, instituted pro-ceedings before the Brussels Market Court for the annulment of theBIPT’s decision of 29 June 2016 by which the latter granted to Via-sat’s competitor an authorisation for the installation and operation ofsix ground components as part of a system providing mobile satelliteservices. Viasat claimed, in essence, that the service envisioned bythe recipient of the authorisation decision and the system to be de-ployed to provide such a service do not comply with the Europeanand Belgian regulatory framework on the use of the 2 GHz Band. Asa result, in Viasat’s view, the BIPT could not authorise the groundcomponents.

The BIPT’s authorisation decision was annulled a first time by thejudgment of the Brussels Market Court of 14 March 2018 due tothe BIPT’s failure to state proper reasons. Following this annulment,the BIPT readopted the same decision, with adapted reasons, on 7August 2018. As a result, Viasat instituted proceedings for the an-nulment of that second decision.

On 23 January 2019, the Brussels Market Court issued an interlo-cutory judgment referring two questions to the Court of Justice of theEuropean Union.

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STATE AID

National authorities must recover unlawfulState aid on their own initiative

In the referring case, a national authority claimed the recoveryof aid which it had granted to an undertaking because it consti-tuted unlawful State aid. The national authority had granted theaid under the conditions of the former General Block ExemptionRegulation (GBER) and argued (several years later) that one ofthese conditions had not been fulfilled and that the aid shouldtherefore have been notified to the Commission.

Following a preliminary reference, the Court ruled that nationalauthorities must recover on their own initiative aid which theyhave unlawfully granted. As the Advocate General in this casepointed out in its Opinion, there appears to be no earlier caselaw to the effect of the Court finding that such an obligationexists. Interestingly, this ruling goes further than the Court’s caselaw concerning the situation where a national court is faced withunlawful State aid pending a decision of the Commission on thecompatibility of that State aid. In these cases, the Court decidedthat national courts may recover the unlawful State aid.

Moreover, the Court clarified that an aid beneficiary cannot arguethat it held legitimate expectations that the aid was lawful merelybecause the national authority misapplied the GBER.

As regards the limitation period, the Court first pointed out thatthe limitation period (of ten years) applicable to the recovery ofaid by the Commission does not apply by analogy to the recoveryof unlawful aid by national authorities. Furthermore, since theaid in question was co-financed by a European structural fund,the Court found that the limitation period foreseen by the

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In this judgment, the Market Court recalled that, in accordance withthe European and Belgian regulatory framework on the use of the 2GHz Band, the operators selected by the European Commission hadcommitted themselves, in their tenders, to ensuring that their pro-posed mobile satellite service would cover a service area of at least60% of the aggregate land area of the Member States, from the timethe service commenced, and that said service was to be provided inall Member States, to at least 50% of the population and over atleast 60% of the aggregate land area of each Member State, no laterthan by 13 June 2016. It is undisputed that this commitment hasnot been met.

In order to render a final judgment, the Brussels Market Court hasdecided to stay the proceedings and interrogate the Court of Justice

on the legal consequences of this violation. In particular, the BrusselsMarket Court seeks to know whether the European regulatory frame-work on the use of the 2 GHz Band should be interpreted as meaningthat, if a satellite operator selected by the European Commission vio-lates the coverage obligations and the deadline mentioned above,the competent authorities of the Member States must - or, in the al-ternative, may - refuse to grant authorisations to deploy complemen-tary ground components to that operator.

The case is currently pending before the Court of Justice.

Please contact Pierre de Bandt, Raluca Gherghinaru or Ludovic Panepinto for further information on this case and/or for general advice on regulated markets and industries.

On 5 March 2019, the Court of Justice (Grand Chamber) issuedan interesting judgment in the Eesti Pagar case (C-349/14).

For the first time, the Court ruled that national authorities havethe obligation to recover on their own initiative State aid whichthey have granted unlawfully. In addition, the Court provided interesting guidance on the limitation period that should applyto the recovery of unlawful aid and on the obligation to claim interest.

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STATE AID

The 28 February 2019 judgment of the Brussels Court of Appeal confirmed the far-reaching powers of national courts in the context of State aid matters

In this context, without explicitly mentioning the Deutsche Lufthansa case law (C-284/12), the Court of Appeal applied theprinciples of this case law to confirm its competence to interpretand apply the notion of “State aid” as long as the European Com-mission has not initiated a formal investigation procedure accor-ding to Article 108(2) TFEU.

The Court of Appeal then proceeded to examine the Walloon re-gulatory framework pursuant to which the appealing party receivedwage subsidies. It provided for subsidies which “manifestly” ex-ceeded the ceilings provided for in Commission Regulation (EU)No 651/2014. In addition, the Court considered that, contrary tothis Regulation, the Walloon regulatory framework also providedfor subsidies for management staff.

In view of these elements, the Court of Appeal concluded that theaid in the form of wage subsidies granted to the appealing partyshould have been notified to the European Commission. In the ab-sence of such notification, the aid was found to be illegal.

In the context of an action for a cease and desist order filed by theGeneral Union of the Belgian Cleaning Sector, the Brussels Courtof Appeal confirmed in a judgment dated 28 February 2019 thatthe appealing party (an adapted work enterprise active in Wallonia)had engaged in unfair trading practices. These practices consistedof offering abnormally low prices in the context of public tenders,largely with the benefit of illegal State aid. This judgment is inte-resting from several perspectives.

On the one hand, the Court of Appeal confirmed its settled caselaw according to which submitting abnormally low bids in thecontext of a public procurement procedure constitutes, in princi-ple, an unfair commercial practice within the meaning of ArticleVI.104 of the Code of Economic Law. In this respect, the Courtrecalled that a bid which contains abnormally low prices is likelyto harm competition and equality among bidders, but also, morebroadly, the general interest.

On the other hand, the Court of Appeal stressed that nationalcourts have a duty to enforce the standstill obligation set out inArticle 108(3) TFEU and to protect the rights of individuals againstillegal State aid. In this respect, it also recalled that the nationalcourts are competent to order interim measures against illegal aid.

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Regulation on the Protection of the European Communities Financial Interests may apply. In the alternative, national courtsshould apply the national limitation period.

Finally, the judgment also clarified that national authorities havethe obligation to claim interest in order to restore the distortionof competition caused by the unlawful aid. As for the calculationof this interest, the Court stresses that, whereas national law in

principle applies, interest should be claimed for the whole periodof the aid and at the rate that would have been applicable if theamount of the aid had been borrowed at market conditions.

Please contact Pierre de Bandt, Jeroen Dewispelaere, RalucaGherghinaru or Joren Vuylsteke for further information on thiscase and/or for general advice on State aid matters.

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By way of consequence, the Court of Appeal confirmed the firstand the second cease and desist orders:

“[the Court of Appeal] orders [the appealing party] (i) to cease sub-mitting bids for public contracts at abnormally low prices withinthe meaning of the regulations on public contracts […], on painof a penalty […] and (ii) to cease submitting bids for publiccontracts at prices taking into account the wage subsidies grantedby the Walloon authorities on the basis of Articles 1001 and fol-lowing of the Walloon Code of Social Action and Health, or anylater similar provision, as long as such aid has not been notified tothe European Commission and declared compatible with the in-ternal market, on pain of a penalty […]”.

This judgment is of great importance for practitioners. Specifically,it has the merit of recalling the far-reaching powers of the national

courts in State aid matters. Also relevant is that the Brussels Courtof Appeal did not hide behind the fact that the contested measuresare the subject of an investigation before the European Commis-sion. On the contrary, it examined whether the measures at handcould be qualified as State aid and whether they should have beennotified to the European Commission. Insofar as the response toboth questions was positive, the Court of Appeal took stock of thecase law of the Court of Justice and adopted the measures it dee-med necessary to protect the interests of the competitors affectedby the violation of the standstill obligation laid down in Article108(3) TFEU.

Please contact Peter Teerlinck or Raluca Gherghinaru for furtherinformation on this case and/or for general advice on public procurement and State aid matters.

STATE AID

Belgian legislation on “excess” profit is not aState aid scheme according to the GeneralCourt

In its judgment of 14 February 2019 in joined cases T-131/16 andT-263/16, the General Court annulled the Commission’s decisionconcerning tax exemptions granted by Belgium to multinational com-panies by means of rulings. This is the first decision by a European

court regarding the tax rulings cases pursued by the Commission.Unlike other cases brought before the General Court, such as thecases involving Apple/Ireland, Starbucks/The Netherlands orFiat/Luxembourg, the state aid decision in the Belgian case is notrelated to individual aid granted to a specific company, but rather toa state aid scheme. In this regard, the judgment provides some cla-rifications about the conditions to be fulfilled to conclude that an aidscheme exists under the State aid rules.

In a decision of 2016, the Commission considered that Belgium’stax scheme on “excess profit”, which is based on Article 185(2) ofthe Income Tax Code (CIR) and on a circular of 2006, was an aidconsisting of exempting from corporate income tax a part of the pro-fits (the “excess” profit) made by entities which formed part of mul-tinational corporate groups. According to the Belgian authorities, theexemption was justified by the fact that the exempted profits excee-ded the profits that would have been made by comparable standa-lone entities operating in similar circumstances. Such a downwardadjustment of the profit subject to taxation, granted through the is-suing of advance rulings by the Belgian authorities, was thereforesaid to result from the arm’s length principle and intended to avoidpotential double taxation.

In its judgment, the General Court found that the Commission erro-neously concluded that the measures referred to in the contesteddecision introduced an aid scheme in Belgian legislation.

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Firstly, the General Court considered that Article 185(2) CIR, which,according to the contested decision, constitutes the basis for the al-leged aid scheme, does not contain the essential elements of thatscheme. It is underlined that those essential elements had in factbeen identified on the basis of an analysis of a selection of advancerulings. In particular, the General Court noted that neither the me-thodology for calculating the excess profit nor the requirement of in-vestments, the creation of jobs or the centralisation or increase ofactivities in Belgium, which constitute two essential elements of thealleged scheme identified by the Commission in its decision, followeven implicitly from the acts referred to in that decision. This meanstherefore that the implementation of those acts and thus the grantingof the alleged aid entails an analysis on a case-by-case basis and ne-cessarily depends on the adoption of further implementing measures,precluding as such the existence of an aid scheme within the mea-ning of Article 1(d) of Regulation 2015/1589.

Secondly, the General Court underlined that, when issuing advancerulings on excess profit, the Belgian tax authorities have a margin ofdiscretion such that their power is not limited to the technical appli-cation of the provisions in question. They can, as such, influence theamount and the essential elements of the excess profit exemptionand the conditions under which it is granted.

Thirdly, the General Court noted that the beneficiaries of the scheme,as referred to in the contested decision, cannot be identified on the

sole basis of Article 185(2) CIR without further implementing mea-sures. Specifically, these beneficiaries correspond to a much morespecific category than that of companies forming part of a multina-tional group in the context of their reciprocal cross-border relations-hips, as mentioned in Article 185(2) CIR.

Finally, the General Court rejected the Commission’s argument alle-ging the existence of a systematic approach which could have beenidentified by examining a sample of 22 of the 66 existing advancerulings. It pointed out here that the sample to which the Commissionreferred in the contested decision cannot necessarily prove that sucha systematic approach actually existed and that it was followed in allthe advance rulings concerned.

The annulment of the Commission decision by the General Courtmight not be the final act in the Belgian tax rulings case. More pre-cisely, besides bringing an appeal before the Court of Justice, theCommission could also decide to pursue the case on an individualbasis by establishing that each of the dozens of companies, includingMagnetrol, which were granted a tax exemption by the Belgian au-thorities, in fact benefited from individual state aid.

Please contact Pierre de Bandt, Jeroen Dewispelaere, Chloé Binet or Raphael Boucquey for further information on this case and/or for general advice on competition law.

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Newsletter 2 | April 2019

UNFAIR TRADE PRACTICES

The Brussels Court of Appeal confirmed themisleading character of Mobistar’s comparativeadvertising for internet download and uploadspeeds

Comparative advertising is defined as any advertising which explicitlyor implicitly identifies a competitor or goods or services offered by acompetitor (Article I.8 of the Code of Economic Law). One of theconditions for comparative advertising to be lawful is that it must notbe misleading (Article VI.17 of the Code of Economic Law). On 30October 2018, the Brussels Court of Appeal issued a judgment in acase on comparative advertising relating to internet download andupload speeds. The facts are set out below.

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In 2014, Mobistar (now Orange Belgium) asked the independent re-search agency Commsquare to compare internet download andupload speeds through the Mobistar, Proximus and Base 4G net-works. The tests covered the period between 6 February 2014 and5 March 2014. On the basis of the results, Mobistar claimed on itswebsite that it provided “the fastest 4G network” in Belgium. In itsadvertising, it referred to tests performed by Commsquare in February2014. Shortly afterwards, however, Proximus also had Commsquareperform tests, this time covering 4G download and upload speedsduring the first quarter of 2014. These tests revealed that the Proxi-mus network provided the fastest download and upload speeds du-ring this period. Proximus therefore asked Mobistar to remove itsclaim from its website. As Mobistar refused, Proximus initiated ces-sation proceedings before the President of the Commercial Court ofBrussels (now the Enterprise Court). The President found Mobistar’scomparative advertising to be misleading, a decision which Mobistarappealed before the Brussels Court of Appeal.

In its judgment of 30 October 2018, the Court of Appeal first referredto the definition of misleading advertising in the EU Directive concer-ning misleading and comparative advertising (2006/114/EC). In ac-cordance with Article 2 of the Directive, “misleading advertisingmeans any advertising which in any way, including its presentation,deceives or is likely to deceive the persons to whom it is addressedor whom it reaches and which, by reason of its deceptive nature, islikely to affect their economic behaviour or which, for those reasons,injures or is likely to injure a competitor”. By reference to the Lidl/Col-ruyt case before the Court of Justice of the EU dated 19 September2006 (C-356/04), the Court then stated that it is for national courtsto ascertain in the circumstances of each particular case, and bearingin mind the consumers to which the advertising is addressed, whe-ther the latter may be misleading. The national court must take intoaccount the perception of an average consumer of the products or

services being advertised, who is reasonably well informed and rea-sonably observant and circumspect. Also, in carrying out the assess-ment, courts must take account of all the relevant factors in the case,having regard to the information contained in the advertising and,more generally, to all its features.

Mobistar argued that its advertising was not misleading as it did notcreate the impression that Mobistar ‘at all times’ provided the fastest4G network. According to Mobistar, it only indicated that, on thebasis of tests performed in February 2014, its network provided hi-gher internet speeds than those of Proximus and Base. Mobistar sta-ted that as such, the average consumer was aware that the claimonly related to February 2014.

The Court of Appeal did not agree with Mobistar. The Court conside-red that Mobistar’s reference in its advertising to the source of itsclaim, i.e. Commsquare’s tests of February 2014, did not imply thatthe consumer was aware of the fact that the claim only related toFebruary 2014. This is particularly the case as Mobistar publishedits fastest internet speed claim and the test results on its website forseveral months. As such, Mobistar gave the impression that these fi-gures and claim still applied, even though Mobistar was aware of thenew results of the tests done in April 2014. The Court found thatMobistar’s advertising was likely to influence the economic behaviourof consumers as a network’s internet speed is one of the most im-portant criteria when choosing between mobile telecom providers.The Court therefore concluded that Mobistar’s comparative adverti-sing was misleading and confirmed the contested judgment.

Please contact Karel Janssens, Sylvia de Graaf or Bieke Vanmarckefor further information on this case and/or for general legal advicerelating to unfair trade practices.

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& DE BANDTAdvocaten Avocats Attorneys Rechtsanwälte

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Newsletter 2 | April 2019