Mergers below the notification thresholds: towards an increase in controls for anti-competitive practices?

Although the sales of the businesses to be divested did not meet the thresholds for notification of the transaction, which was therefore not subject to prior merger control, the Belgian Competition Authority justified the opening of an investigation in particular by the fact that Dossche Mills and Ceres are the two largest producers and suppliers of flour to artisanal bakeries in Belgium.

It should be noted that Dossche Mills had already attempted to acquire the whole of Ceres in 2019. This transaction was notified to the Belgian Competition Authority, which found that there were serious doubts as to its compatibility with the maintenance of effective competition on the affected markets. The operation was abandoned.

Drawing on the Towercast case law, the Belgian Competition Authority invoked Article IV. 39 of the Belgian Economic Law Code, which prohibits anti-competitive agreements, to control the transaction in progress. As a reminder, the CJEU had ruled in the Towercast case that a merger that did not meet the notification thresholds could nevertheless be examined under Article 102 of the TFEU, which prohibits abuses of a dominant position.

The use of anti-competitive practices law to control sub-threshold mergers enables the Belgian Competition Authority to compensate for its lack of power to evoke sub-threshold mergers.

The Belgian Competition Authority’s press release comes against the backdrop of the opening by the French Competition Authority, which also has no such evocation power, of a public consultation aimed at exploring three options enabling it to control mergers below the thresholds:

• the creation of a power of evocation based on quantitative and qualitative criteria;
• the introduction of a mandatory notification threshold for certain companies with strong market power;
• limiting its intervention to the control of anti-competitive practices. It should be noted that the French Competition Authority has already applied the Towercast case law, extending its scope to admit the applicability of Article 101 TFEU, which prohibits anti-competitive agreements, in order to control a posteriori merger operations in the rendering sector (ADLC, decision no. 24-D-05 of May 2, 2024). This case was dismissed. In October 2024, the General Rapporteur of the French Competition Authority issued a notification of grievances against companies alleged to have entered into and implemented an agreement leading to the creation of a monopoly and the elimination of all competition on a market.

The Dossche Mills case illustrates the desire of competition authorities to ensure that no merger, even one not subject to prior notification, harms competition.

The application of rules prohibiting anti-competitive practices to mergers that do not meet the notification thresholds raises questions, however, in that it may undermine the legal certainty previously offered to companies by the ex-ante merger control regime. This is reinforced by the fact that, at present, there is no precise analytical grid that would enable companies to assess the potentially anti-competitive nature of the transactions they are considering. There are also a number of procedural difficulties, such as which statute of limitations to apply (is an anti-competitive merger an instantaneous infringement or a continuing one)? What type of penalty is appropriate, given that it may be imposed long after the transaction has been completed?

The application of this type of ex-post control by competition authorities thus raises many questions for companies, and careful monitoring of developments in the doctrine and practices of competition authorities is crucial.