Economic dependence: a Trojan horse in B2B relationships?
With the (postponed) introduction of the theory of economic dependence in December 2020, Belgium joins the ranks of an increasing number of European member states that import antitrust rules previously reserved to curb abuse of (absolute) market power into any B2B relationship where a party can claim to be economically dependent on its counterpart.
The new Belgian B2B Law defines "economic dependence" as:
a position of dependence of one undertaking vis-à-vis one or more other undertakings
characterised by the absence of a reasonably equivalent alternative, available within a reasonable term and subject to reasonable terms and costs
that allows the latter undertakings to mandate performances or conditions that they would not be able to mandate under normal market conditions.
While a case by case assessment will inevitably be required, it stands to reason that, considering this broad definition of "economic dependence", few distribution or franchising agreements will escape the scope of this new legislation.
The consequences on the relationship along the distribution or franchising chain are likely to be significant. The undertakings that carry the long end of the stick in the B2B relationship are essentially equated to dominant market players as far as this relationship is concerned. They are forbidden to "abuse" the situational dependence in which their contract partners find themselves in a way that would harm competition on the relevant Belgian market or a part thereof.
If the vast body of case law on abuse of dominance can be a guide, this would cast doubt on many non-compete clauses, long term exclusivities, tying provisions or refusals to supply, to name but a few contractual staples that until present have always passed under the radar in the absence of actual market power.
Moreover, if you combine this antitrust notion with the general prohibition on misleading and aggressive market practices that the same B2B law has put in place since last year and that will be supplemented with the legislation on blacklisted and grey listed unfair contract terms, also in December (see blogpost here), it is fair to predict that many reseller agreements, either newly to be concluded as of December or that are up for renewal come 2021 will have to be scrutinised in the light of these new rules.