New Belgian law to govern contractual relationships between companies

Recently, the Belgian parliament adopted the Law of 4 April 2019 modifying the Belgian Code of Economic Law (“CEL”) by (i) prohibiting certain unfair, misleading and/or aggressive market practices in a B2B context, (ii) introducing a greylist and a blacklist of clauses in B2B contracts and (iii) expanding the scope of Belgian competition law to also cover abuses of economic dependence. The purpose of the legislator was to strengthen the negotiating position of smaller companies in their vertical relationships with larger companies. The Law of 4 April 2019 will however apply to all contractual B2B relationships.

(i) Misleading and/or aggressive market practices
Entry into force: 1 September 2019

Law of 4 April 2019 copies the already existing provisions in B2C contracts, and now explicitly prohibits the following practices between companies:
– misleading market practices
– aggressive market practices
– all market practices which would encourage an infringement of the CEL.

(ii) Blacklisted and greylisted clauses
Entry into force: 1 December 2020

In addition to misleading and aggressive market practices, the Law of 4 April 2019 introduces the following:
– a general unfairness test, which prohibits contractual clauses creating an obvious (legal) imbalance between the parties (not extended to essential terms of the contract);
– a blacklist, containing the following 4 clauses which will always be prohibited:
o A clause providing that party A is irrevocably bound, while the obligations of party B are subject to a condition at this party’s discretion;
o A clause granting a party the unilateral right to interpret any clause of the contract;
o A clause which, in case of a dispute, leads the other party to waive any legal recourse;
o A clause which provides, irrefutably, that a party has had knowledge of provisions which it could not actually have knowledge of before entering into the contract.
– A greylist of clauses which will be considered prohibited unless (i) it does not create an obvious imbalance, or (ii) such clause was truly desired and knowingly adopted by the parties. These clauses include, a.o., unilateral modification clauses, clauses limiting means of evidence, excessive damage clauses, etc.

For reasons of legal certainty and legitimate expectations, the provisions regarding B2B-clauses will only apply to B2B contracts which are established, renewed or modified after 1 December 2020. Therefore, the black- and greylisted clauses will not be applicable to already existing contracts, unless they are renewed or amended.

(iii) Abuse of economic dependence
Entry into force: 1 June 2020

The legislator has also created an additional category of restrictive competition practices, besides restrictive agreements and the abuse of a dominant position. Businesses will now also be prohibited from abusing a position of economic dependence of another business, by which competition on the Belgian market concerned can be affected (for example: the refusal of a sale).

Importantly, the maximum fine that the Belgian Competition Authority can impose has also been increased. The cap has been increased to 10% of the worldwide turnover of the undertaking involved. This could significantly increase fines in Belgium, given that, to date, fines were capped at 10% of Belgian turnover (including exports), which was favourable for international undertakings.