VBB on Belgian Business Law Van Bael & Bellis on Belgian Business Law should not be construed as legal advice on any specific facts or circumstances. The content is intended for general informational purposes only. Readers should consult attorneys at the firm concerning any specific legal questions or the relevance of the subjects discussed herein to particular factual circumstances. Highlights COMPETITION LAW Belgian Competition Authority Sus- pends Radio Access Network Shar - ing Agreement of Orange Belgium and Proximus Page 4 Brussels Court of Appeal Confirms Finding of Infringement of Compe- tition Rules by Professional Organ- isation of Pharmacists but Directs Belgian Competition Authority to Recalculate Fine Page 5 Topics covered in this issue COMMERCIAL LAW............................................................................................................... 3 COMPETITION LAW.............................................................................................................. 4 CORPORATE LAW ..................................................................................................................8 DATA PROTECTION................................................................................................................9 INSOLVENCY .......................................................................................................................... 12 LABOUR LAW ........................................................................................................................ 13 LITIGATION .............................................................................................................................. 14 Belgian Competition Authority Expands Scope of Simplified Merger Review Page 6 CORPORATE LAW New Directive on Cross-Border Con- versions, Mergers and Divisions Page 8 DATA PROTECTION Belgian Data Protection Authority Finds Website’s Cookie Policy Inad- equate and Imposes Fine Page 10 INSOLVENCY Supreme Court Confirms that Gen- eral Pledges Suffice to Qualify Claims as Preferential in Judicial Reorgani- sation Procedures Page 12 LABOUR LAW Constitutional Court Annuls “Cash for Cars” Regime Page 13 LITIGATION Proposal for Directive on Collective Representation Actions Enters Inter - institutional Negotiations Page 14 VBB on Belgian Business Law | Volume 2020, N O 1 January 2020 Van Bael & Bellis excels in M&A work, and often provides domestic Belgian law advice on cross-border transactions. IFLR1000, 2019 “Van Bael & Bellis’ Belgian competition law practice [...] is a well-established force in high-stakes, reputationally- sensitive antitrust investigations..” Legal 500 2019 [email protected]www.vbb.com
Transcript
VBB on Belgian Business Law
Van Bael & Bellis on Belgian Business Law should not be construed as legal advice on any specific facts or circumstances. The content is intended for general informational purposes only. Readers should consult attorneys at the firm concerning any specific legal questions or the relevance of the subjects discussed herein to particular factual circumstances.
Highlights
COMPETITION LAW Belgian Competition Authority Sus-pends Radio Access Network Shar-ing Agreement of Orange Belgium and Proximus Page 4
Brussels Court of Appeal Confirms Finding of Infringement of Compe-tition Rules by Professional Organ-isation of Pharmacists but Directs Belgian Competition Authority to Recalculate Fine Page 5
Topics covered in this issue
COMMERCIAL LAW ...............................................................................................................3 COMPETITION LAW ..............................................................................................................4 CORPORATE LAW ..................................................................................................................8 DATA PROTECTION ................................................................................................................9 INSOLVENCY .......................................................................................................................... 12 LABOUR LAW ........................................................................................................................ 13 LITIGATION .............................................................................................................................. 14
Belgian Competition Authority Expands Scope of Simplified Merger Review Page 6
CORPORATE LAW New Directive on Cross-Border Con-versions, Mergers and Divisions Page 8
DATA PROTECTION Belgian Data Protection Authority Finds Website’s Cookie Policy Inad-equate and Imposes Fine Page 10
INSOLVENCY Supreme Court Confirms that Gen-eral Pledges Suffice to Qualify Claims as Preferential in Judicial Reorgani-sation Procedures
Page 12
LABOUR LAW Constitutional Court Annuls “Cash for Cars” Regime
Page 13
LITIGATION Proposal for Directive on Collective Representation Actions Enters Inter-institutional Negotiations Page 14
VBB on Belgian Business Law | Volume 2020, NO 1
January 2020
Van Bael & Bellis excels in M&A work, and often provides domestic Belgian law advice on cross-border transactions.
Van Bael & Bellis on Belgian Business Law should not be construed as legal advice on any specific facts or circumstances. The content is intended for general informational purposes only. Readers should consult attorneys at the firm concerning any specific legal questions or the relevance of the subjects discussed herein to particular factual circumstances.
Belgian Competition Authority Suspends Radio Access Network Sharing Agreement of Orange Belgium and Proximus....................................................................................................... 4
Brussels Court of Appeal Confirms Finding of Infringement of Competition Rules by Professional Organisation of Pharmacists but Directs Belgian Competition Authority to Recalculate Fine ........................... 5
Belgian Competition Authority Launches In-Depth Investigation of Dossche Mills / Ceres Merger ..................6
Belgian Competition Authority Expands Scope of Simplified Merger Review .................................................................6
Belgian Competition Authority Imposes Interim Measures on Belgian Bumper Pool Association ................6
CORPORATE LAW 8
New Directive on Cross-Border Conversions, Mergers and Divisions .............................................................................................8
DATA PROTECTION 9
Advocate General Says National Laws to Combat Terrorism Must Comply with Privacy Directive ..................9
EDPB Adopts Final Guidelines on Processing of Personal Data through Video Devices ....................................10
Belgian Data Protection Authority Finds Website’s Cookie Policy Inadequate and Imposes Fine .....................10
INSOLVENCY 12
Supreme Court Confirms that General Pledges Suffice to Qualify Claims as Preferential in Judicial Reorganisation Procedures ...........................................................12
LABOUR LAW 13
Constitutional Court Annuls “Cash for Cars” Regime .......................................................................................................13
LITIGATION 14
Proposal for Directive on Collective Representation Actions Enters Interinstitutional Negotiations ...................14
On 27 January 2019, the statutory interest rate applicable to civil matters and commercial relations with private individ-uals/natural persons was published in the Belgian Official Journal (Belgisch Staatsblad / Moniteur belge). The interest rate will amount to 1.75% and has thus been reduced from 2019 (See, this Newsletter, Volume 2019, No. 1, p. 3).
The default interest rate for commercial transactions appli-cable during the first semester of 2020 remains unchanged from that applied in 2019 (See, this Newsletter, Volume 2019, No. 1, p. 3 and No. 7, p. 3) and will thus amount to 8%. Pursuant to the Law of 2 August 2002 on combating late payment in commercial transactions (Wet van 2 augustus 2002 betreffende de bestrijding van de betalingsachter-stand bij handelstransacties / Loi du 2 août 2002 concer-nant la lutte contre le retard de paiement dans les transac-tions commerciales), the default commercial interest rate applies to compensatory payments in commercial transac-tions (handelstransacties / transactions commerciales), i.e., transactions between companies or between companies and public authorities.
Belgian Competition Authority Suspends Radio Access Net-work Sharing Agreement of Orange Belgium and Proximus
On 8 January 2020, the Competition College (Mededin-gingscollege / Collège de la concurrence) of the Belgian Competition Authority (Belgische Mededingingsautoriteit / Autorité belge de la Concurrence - the BCA) decided to sus-pend the mobile network sharing agreement that Orange Belgium and Proximus signed on 22 November 2019.
Network Sharing Agreement
On 11 July 2019, Orange Belgium and Proximus, the two most important mobile network operators in Belgium, announced their intention to set up a shared radio access network, which would be operated by a 50/50 joint ven-ture (the JV) (See, this Newsletter, Volume 2019, No. 11, p. 4). On 22 November 2019, the parties signed a shareholders’ agreement for the JV (the SHA) and a radio access network sharing agreement (the RSA). The RSA applies not only to so-called passive network components (such as buildings and antenna masts) but also to active network compo-nents (such as radio equipment and antenna’s).
According to the parties, this agreement will allow them “to meet customers’ growing demand in terms of mobile network quality and indoor coverage”. Orange Belgium expects savings of EUR 300 million over 10 years and Prox-imus estimates its recurring annual cash flow benefit of EUR 35-40 million as of 2024.
Procedure Before BCA
Telenet, the only mobile network operator in Belgium that is not involved in the JV, initially participated in talks but later withdrew from them and, on 29 October 2019, filed a complaint with the BCA claiming that the network shar-ing agreement was anticompetitive. Two days later, Tel-enet filed a request for interim measures before the BCA seeking the suspension of the network sharing agreement.
The Belgian Institute for Postal Services and Telecom-munications (the BIPT), the telecommunications regula-tor, intervened in the procedure and made submissions to the BCA.
BCA’s Decision on Telenet’s Request for Interim Measures
The BCA first confirmed that the JV concerned a non-full function joint venture and that consequently the network sharing agreement should be assessed under the rules regarding the exchange of sensitive commercial informa-tion and cooperation between competitors, rather than the merger control rules.
Against this backdrop, the BCA found that “it would not be manifestly unreasonable” to conclude to a prima facie potential restriction of competition on the retail and whole-sale mobile telephony markets.
First, while Orange Belgium and Proximus had implicitly committed to specific measures and disclosures proposed by the BIPT to avoid the exchange of sensitive commercial information, the BCA was concerned that there was little to indicate that these commitments would be reflected in a binding agreement. The management of the JV could attempt to steer the requests of the JV shareholders to benefit the optimal expansion of the common grid.
Second, the BCA stressed the importance of distinguish-ing network-sharing in densely populated areas from network-sharing in lightly populated areas. In the former, infrastructure-based competition should be preferred to the sharing of active network components. However, the sharing agreement between Orange Belgium and Proxi-mus covers the entire Belgian territory, regardless of den-sity of population.
Finally, the BCA referred to the BIPT’s concerns not to underestimate the impact of the JV on the relevant Bel-gian markets and its wish for the BCA to further investi-gate the matter. As a result, the BCA concluded that the JV could appreciably affect the competition between its shareholders, regardless of whether they would continue to pursue their own commercial policies with their own products and services.
The BCA suspended the implementation of the SHA and RSA until 16 March 2020 to allow the BIPT to investigate whether the commitments will be sufficiently reflected in binding agreements and discuss any remaining con-cerns with Orange Belgium and Proximus. In case of dis-agreement, the Competition Prosecutor General of the BCA (Auditeur-Generaal / Auditeur général) could decide to discuss commitments with Orange Belgium and Proxi-mus or could request these to be brought before the Com-petition College.
The Competition College also ordered that by 9 March 2020 Orange Belgium and Proximus should advise it and the Competition Prosecutor General of their discussions with the BIPT and of the BIPT’s views.
The suspension only concerns the transfer of staff and does not prevent the launching of requests for proposals to procure network equipment and selecting staff insofar as these steps do not result in binding agreements.
Brussels Court of Appeal Confirms Finding of Infringe-ment of Competition Rules by Professional Organisation of Pharmacists but Directs Belgian Competition Authority to Recalculate Fine
On 8 January 2020, the Market Court (Marktenhof / Cour des marchés) of the Brussels Court of Appeal upheld the decision of the Belgian Competition Authority (Belgische Mededingingsautoriteit / Autorité belge de la Concurrence - the BCA) of 28 May 2019 finding that the professional organisation of pharmacists (Orde der Apothekers / Ordre des pharmaciens – the PO) infringed Article IV.1 of the Bel-gian Code on Economic Law (CEL) and Article 101 of the Treaty on the Functioning of the European Union (See, this Newsletter, Volume 2019, No. 6, p. 3). The Market Court also held that the BCA misapplied the rules on the calculation of fines and referred the case back to the BCA for a recal-culation of the fine.
The Market Court first explained what it considered to be its powers of judicial review on appeal from decisions of the BCA. According to the Market Court, these powers are limited to ensuring that the BCA (i) observed applicable procedural requirements; (ii) stated the principles on which its decision is based; (iii) accurately set out the facts and
their legal qualification; and (iv) made no manifest error of assessment. The Market Court indicated that it does not act as a regular appellate court.
In the case at hand, the Market Court found that the facts on which the BCA relied to adopt its decision could rea-sonably have caused the BCA to find that the PO had taken a range of exclusionary measures (including disciplinary proceedings and court proceedings) to thwart the devel-opment of Medi-Market, a successful retailer of both med-icines and other, less regulated, health products.
The Market Court went on to confirm that legitimate public service obligations cannot serve as a pretext for anti-com-petitive behaviour. It found that the PO had diverted the task of general interest with which it had been entrusted (i.e., maintaining compliance with the professional rules of ethics) in order to protect a traditional business model of the profession (i.e., the activities of a solo pharmacist) and hamper the development of a new business model implemented by Medi-Market. On that basis, the Market Court dismissed PO’s action to annul the decision of the BCA in its entirety.
At the same time, the Market Court held that the BCA had erred in imposing a fine of EUR 1 million on the PO. Accord-ing to the Market Court, the former version of Book IV CEL did not allow the BCA to calculate the fine cap of 10% by adding the turnovers of the members of the PO. This is because the former version of Article IV.70 CEL reads as follows: “the Competition College may impose on each of the undertakings and associations of undertakings concerned, fines not exceeding 10% of their turnover”.
The Market Court made short shrift of the similarities con-sidered by the BCA between former Article IV.70 CEL and Article 15 of Regulation No 17 implementing Articles 85 and 86 of the Treaty. For the Market Court, it is clear from Article 5 of Regulation 1/2003 of 16 December 2002 on the implementation of the rules on competition laid down in Articles 81 and 82 of the Treaty that national competition authorities only have the power to impose the fines that are provided for in their national law. Hence, the BCA could only impose the fines provided for by Belgian law. Impor-tantly, the Market Court added that the principle that pen-alties must be lawful requires that any text providing for a fine must be interpreted restrictively and not by analogy.
The Market Court therefore annulled the fine and referred the case back to the BCA which, in a different composition, will have to calculate a new fine. It is expected that the fine eventually imposed by the BCA will be reduced to around EUR 250,000.
The implications of this judgment are likely to be limited since the new version of Article IV.84 CEL explicitly states that “the turnover of associations of undertakings shall be the total of the turnover of all the active members on the relevant market”.
Belgian Competition Authority Launches In-Depth Inves-tigation of Dossche Mills / Ceres Merger
The Competition College of the Belgian Competition Authority (Belgische Mededingingsautoriteit / Autorité belge de la Concurrence - the BCA) decided, on 15 January 2020, to open an in-depth (“phase 2”) investigation of the concen-tration involving Dossche Mills S.A. and Ceres S.A.
The concentration takes place in the sector of the produc-tion and sale of soft wheat flour for human consumption. According to the notification form, which was filed with the BCA on 7 November 20109, the concentration concerns (i) the grain processing sector; (ii) grain milling (i.e., the manu-facture of flour, groats, meal or pellets of wheat, rye, oats, corn or other cereal grains); (iii) the manufacture of cere-al-based breakfast foods, (iv) the manufacture of mixed flours prepared for the manufacture of breads, cakes, bis-cuits, pancakes, etc.; (v) the wholesale of flours and bakery products; and (vi) ancillary transportation services.
Belgian Competition Authority Expands Scope of Simpli-fied Merger Review
On 20 January 2020, the Belgian Competition Authority (Belgische Mededingingsautoriteit / Autorité belge de la Concurrence - the BCA) announced the adoption of new rules expanding the scope of the simplified merger review procedure in Belgium. These rules were also published in the Belgian Official Journal on 20 January 2020 and entered into force on the same day.
Under these new rules, the BCA can decide to follow a simplified procedure to review transactions that satisfy two conditions: (i) the cumulative market share of all parties “having horizontal relationships” remains below 50%; and
(ii) the Herfindahl-Hirschman index delta (i.e., a method of measuring the increase of market concentration) resulting from the transaction is below 150.
The BCA can also apply the simplified procedure to hori-zontal mergers where the parties’ combined market share remains below 50% and the transaction results in less than 2% increment in market shares.
Finally, the BCA can apply the simplified procedure in two cases “when it considers, in view of all relevant circum-stances, that there is no doubt on the admissibility of the concentration and that it does not raise any objections”: (i) in horizontal mergers, when the parties are active on the same (product and geographic) market and their cumu-lative market shares are above 25% but below 40%; and (ii) in vertical mergers, when the parties operate at differ-ent levels of the supply chain and their market shares on vertically related markets are above 25% but below 40%.
Belgian Competition Authority Imposes Interim Measures on Belgian Bumper Pool Association
On 24 January 2020, the Competition College (Mededin-gingscollege / Collège de la concurrence) of the Belgian Competition Authority (Belgische Mededingingsautoriteit / Autorité belge de la Concurrence - the BCA) announced that it had imposed interim measures on the Belgian Bumper Pool Association (VZW Belgische Golfbiljartbond - BGB) concerning bumper pool balls that may be used in com-petitions and matches organised by the BGB or its affiliated associations and clubs.
The current 2019-2020 rules provide that players can only use two balls from a competing manufacturer. The Com-petition College offered BGB the following choice:
• Either BGB suspends “any contractual or regulatory obligation on the currently exclusively admitted balls from the start of the 2020-2021 season until receipt of the final decision of the case on the merits opened by the Competition Prosecutor General” and makes clear that the admissibility of balls in competitions and matches depends on their objective characteristics and does not favour players using a specific brand of balls;
• Or BGB organises a call for tenders for a sponsorship contract in order to determine the balls allowed during competitions and matches for a maximum of two sea-sons, starting with the 2020-2021 season. This tender should be “open to all suppliers of bumper pool balls that have specific objectively identifiable character-istics that make them functionally suitable for playing bumper pool” and should not favour players using a specific brand of balls.
New Directive on Cross-Border Conversions, Mergers and Divisions
On 1 January 2020, Directive (EU) 2019/2121 amending Directive (EU) 2017/1132 as regards cross-border conver-sions, mergers and divisions (the Directive) entered into force. The Directive aims to remove barriers to the free-dom of establishment of EU limited liability companies by facilitating cross-border conversions, mergers and divi-sions within the EU. At the same time, the Directive aims to safeguard the interests and rights of employees, creditors and minority shareholders.
The Directive introduces new procedures for cross-bor-der conversions and divisions on the basis of the (now updated) existing procedures on cross-border mergers within the EU. With the introduction of these new pro-visions, the Directive aligns the different procedures for cross-border conversions, mergers and divisions in all EU Member States.
Further, the new provisions also simplify the three cross-border procedures, for example, by providing the possibility to speed up the procedure by waiving the preparation of specific reports (with the shareholders’ con-sent and in specific situations).
At the same time, the Directive ensures that employees will be adequately informed and consulted on the expected impact of the operation and that minority and non-voting shareholders’ rights enjoy greater protection. In addition, minority shareholders and creditors of the company con-cerned are granted more safeguards. For example, share-holders who voted against the approval of the draft terms of the cross-border conversion have the right to dispose of their shares for adequate cash compensation.
The Directive also introduces a system of pre-conversion certificates to be issued by a competent authority (a court, notary or other authority) confirming compliance with all relevant terms and conditions and the proper completion of all procedures and formalities of the relevant national legislation of the Member State of departure.
Finally, the Directive encourages the use of digital tools throughout the cross-border operations. Digitally inter-connected business registers should make it possible to exchange all relevant information online. Companies should also be able to complete all formalities online.
Member States must implement the Directive into their national laws by 31 January 2023.
Advocate General Says National Laws to Combat Terror-ism Must Comply with Privacy Directive
On 15 January 2020, Advocate General Manuel Campos Sánchez-Bordona issued three opinions (the Opinions) on the compatibility of Directive 2002/58/EC concern-ing the processing of personal data and the protection of privacy in the electronic communications sector (the ePrivacy Directive) with methods for combating terrorism. The Opinions were given in case C-623/17, Privacy Interna-tional, joined cases C-511/18 and C-512/18, La Quadrature du Net and Others and French Data Network and Others, and case C-520/18, Ordre des barreaux francophones et ger-manophone and Others. The Opinions show that providers of electronic communication services must still observe the ePrivacy Directive, even in situations that oblige them to retain the data of their subscribers and allow the pub-lic authorities to access these data on grounds of national security.
The Opinions address queries from a range of courts, including the Belgian Constitutional Court (Grondwet-telijk Hof / Cour constitutionnelle), that raise questions on the compatibility of national legislation which requires companies to retain electronic communication data with requirements for the protection of personal data and pri-vacy under the ePrivacy Directive.
The Advocate General starts out by citing established case-law of the Court of Justice of the European Union (CJEU) according to which Member States are precluded from imposing obligations of general and indiscriminate retention of data on the providers of electronic commu-nication services.
The Advocate General goes on to clarify the scope of application of the ePrivacy Directive. According to the Advocate General, the ePrivacy Directive does not apply to activities that are aimed at safeguarding national security carried out by the public authorities on their own account. By contrast, when private parties are obliged to cooper-ate with public authorities, even when such cooperation is required on grounds of national security, that brings those activities into an area governed by EU law. This means that the protection of privacy is enforceable against those pri-vate parties. When providers of electronic communication
services are required by law to retain data belonging to their subscribers and allow the public authorities to have access to such data, they therefore must comply with the ePrivacy Directive.
The Advocate General recommends the CJEU to uphold its earlier case-law which established that a general and indiscriminate retention of all traffic and location data of all subscribers and registered users is disproportionate. At the same time, the Advocate General recognises the usefulness of an obligation to retain data for the purposes of safeguarding national security and combating crime and recommends a “limited and discriminate retention”. According to the Advocate General, the concept of limited and discriminate retention implies the retention of spe-cific categories of data that are absolutely essential for the effective prevention and control of crime and for the safeguarding of national security during a defined period of time. The Advocate General adds that any exceptions to and limitations on the obligation to guarantee the confi-dentiality of communications and related traffic data must be interpreted strictly in the light of the fundamental rights of the data subjects enshrined in the Charter of Fundamen-tal Rights of the European Union (the Charter).
The Advocate General goes on to consider the questions referred by the various courts.
In response to the reference made by the French Council of State (Conseil d’Etat) (joined cases C-511/18 and C-512/18), the Advocate General states that the ePrivacy Directive precludes Member States from imposing an obligation on providers of electronic communication services to retain, in a general and indiscriminate manner, the traffic and loca-tion data of all subscribers, as well as data that can be used to identify the creators of the content offered by the pro-viders of those services. Given the general and indiscrim-inate nature of the French statutory requirement to retain data, the Advocate General considers that obligation to be a serious interference with the fundamental rights of the data subjects. He also takes issue with the absence of an obligation on the authorities to notify the data subjects of the processing of their personal data by these authorities.
The Advocate General also addresses the questions raised by the Belgian Constitutional Court. The Opinions provide that the ePrivacy Directive precludes legislation pursuant to which providers of electronic communication services are burdened with a general and indiscriminate obligation applying permanently to retain traffic and location data processed in the course of providing electronic commu-nication services, even if the appropriate safeguards are taken. This is incompatible with the Charter.
Separately, the Advocate General tackles a query by the Belgian Constitutional Court according to which a national court can maintain national legislation even if this has been declared to be incompatible with EU law. According to the Advocate General, compelling reasons related to the pro-tection of national security can, exceptionally, justify main-taining some of the effects of the challenged legislation.
As regards the question referred by the Investigatory Pow-ers Tribunal of the United Kingdom, the Advocate Gen-eral explains that the ePrivacy Directive precludes Member States from imposing legislation that requires providers of electronic communications services to supply bulk communications data to the UK Security and Intelligence Agencies based on a general and indiscriminate collection. This finding comes despite Article 4 of the Treaty on the European Union according to which national security is the exclusive responsibility of each Member State.
EDPB Adopts Final Guidelines on Processing of Personal Data through Video Devices
On 29 January 2020, the European Data Protection Board (EDPB) adopted final guidelines on the processing of per-sonal data through video devices (the Guidelines). The EDPB published a draft of the Guidelines on 10 July 2019 which was subject to public consultation (See, this News-letter, Volume 2019, No. 7, p. 7). The final version of the Guidelines does not include major changes compared to the draft version.
The Guidelines aim to clarify how General Data Protection Regulation 2016/679 (GDPR) applies to the processing of personal data through video devices. While individuals may be comfortable with video surveillance set up for a specific purpose such as security, guarantees must exist to avoid any misuse for totally different and unexpected purposes (e.g., marketing purposes or employee perfor-mance monitoring). Video surveillance is not by default
a necessity when there are other means to achieve the underlying purpose.
The Guidelines address issues such as the lawfulness of processing, the processing of special categories of data, the rights of the data subject and the transparency and information obligations that come with video surveillance.
The final version of the Guidelines can be consulted here.
Belgian Data Protection Authority Finds Website’s Cookie Policy Inadequate and Imposes Fine
By imposing a fine of 15,000 EUR at the end of December 2019, the Belgian Data Protection Authority (Gegevensbes-chermingsautoriteit / Autorité de protection des données - DPA) sent a warning message to operators of websites using cookies that operate in Belgium. This sanction is the first fine imposed in Belgium for violating the cookie con-sent rules and is the highest fine imposed by the DPA so far.
The website in question, jubel.be, offers legal news and insights but its cookie policy was found to be lacking trans-parency and visitors of the website were not offered an option to refuse cookies.
On 27 February 2019, the board of directors of the DPA tasked the Inspectorate (Inspectiedienst/service d’inspec-tion) with looking into the data protection notice and cookie management of the website jubel.be. The Inspectorate established various infringements and brought the pro-ceedings before the Dispute chamber of the DPA (geschil-lenkamer/chambre contentieuse – the Dispute Chamber) which handed down its decision on 17 December 2019.
Transparency
First, the Dispute Chamber established a number of short-comings with regard to the information provided on the website including:
• the privacy notice was not made readily available to users;
• the language of the notice did not match the target audience (i.e., the notice was available only in Dutch while the website also targeted French-speaking users);
• the notice did not contain essential information, includ-ing the retention period of cookies;
• the notice wrongly stated the applicable legal basespermitting the processing;
• the notice wrongly indicated that the use of IPaddresses would allow the processing to be“anonymous”;
• the notice erroneously referred to the application of“US Privacy Law” and the “California Privacy ProtectionAct”.
Many of the shortcomings have been resolved by the web-site owner during the proceedings, but it failed to rem-edy all issues before the hearing and only acted after the DPA investigation had identified the issues. The Dispute Chamber held that the website owner had been negligent and failed its obligations of transparency, information and accountability under the GDPR.
Consent for Cookies
The DPA also held that the website had failed to obtain valid consent for the use of non-essential cookies. In accordance with the General Data Protection Regulation (GDPR), visitors of a website must be offered the choice to accept cookies before visiting the website. Valid con-sent requires clear information to be available about which cookies are collected and for which purpose. Recently, the Court of Justice of the European Union (CJEU) held that a pre-ticked cookie checkbox does not give rise to valid consent under the GDPR (Case C-673/17, Planet49, see this Newsletter, Volume 2019, No. 10, p. 11).
The website’s cookie notice stated that the use of cook-ies was justified by the website’s legitimate interest and during the proceedings, the defendant argued that sta-tistical cookies would fall within the “necessity” exemp-tion of the ePrivacy Directive 2002/58/EC. However, the Dispute Chamber rejected this argument and held that first party analytical or statistical cookies do not fall within the exemptions of the ePrivacy Directive. Therefore, such cookies can only be installed subject to the user’s prior consent. The website had changed its consent mechanism from opt-out to opt-in and therefore the Dispute Chamber established an infringement of Articles 6 and 7 juncto 4.11 of the GDPR. Moreover, the Dispute Chamber held that
the website provided insufficient information about how users could withdraw consent, whereas under the GDPR, withdrawing consent should be as easy as giving consent (Article 7.3 GDPR).
Finally, the Dispute Chamber considered whether the cookie consent could be given for a category of cook-ies rather than for individual cookies. It considered that it would be beneficial to include a second layer of consent which allows users to set their preferences for each indi-vidual cookie within a given category.
Calculation of Fine
Under the GDPR, the Dispute Chamber is granted a varied toolbox of enforcement measures. For this case, it consid-ered that the negligence exhibited by the website’s oper-ator justified the imposition of a fine. Taking account of the duration of the infringement, the number of users of the website, the intent underlying the website (which changed from opt-in to opt-out consent during the proceedings), and balancing this against the fact that the website had undergone improvements to its information notice during the proceedings, the Dispute Chamber considered that a fine of EUR 15,000 would be an appropriate sanction for the infringement at hand.
While the fine remains low considering the defendant’s total annual turnover (EUR 1.7 million), this decision sends a clear warning to website operators. Both the CJEU and the Belgian DPA have now made a clear point on the impor-tance of appropriate consent and information for the use of cookies. These decisions provide useful guidance for website operators to review their current practices and update website policies and consent mechanisms.
Supreme Court Confirms that General Pledges Suffice to Qualify Claims as Preferential in Judicial Reorganisation Procedures
On 16 January 2020, the Supreme Court (Hof van Cassatie / Cour de cassation - the Court) held that claims covered by a general pledge on all existing and future claims qualify as preferential claims in judicial reorganisation procedures.
Background
Pursuant to the general terms and conditions of a credit facility agreement between BNP Paribas Fortis NV (BNP) and Exponant BVBA (Exponant), BNP’s claims were secured by a general pledge over all existing and future receivables of Exponant.
When Exponant entered into a judicial reorganisation pro-cedure, BNP argued that its claim qualified as a preferen-tial claim as it was covered by a pledge. Exponant disa-greed with BNP’s position.
Pursuant to Article I.22, 14° of the Code of Economic Law (CEL), a claim qualifies as a preferential claim in a reor-ganisation procedure if it is covered by a security in rem, and only in the amount of (a) its registration, or (b) in the absence of a registration, the collateralised good’s recov-erable value in going concern, or (c) if the security relates to specific receivables, its accounting value.
Siding with Exponant, the Court of Appeal held that BNP’s claim was not preferential as BNP’s general pledge over all existing and future receivables had not been registered and did not relate to specific receivables.
Court Judgment
In its judgment, the Court held that pursuant to Article I.22, 14° CEL a claim covered by a pledge on receivables does qualify as a preferential claim. If such a pledge relates to specific receivables, the creditor will have a preferen-tial claim in the amount of these receivables’ accounting value. However, if the pledge does not relate to specific receivables, but is rather a general pledge on all existing and future receivables (as was the case here), the claim
will be considered to be preferential only in the amount of these receivables’ recoverable value, while the debtor is assessed as a going concern.
As a result, the Court held that the Court of Appeal erred in its judgment in deciding that BNP’s claim covered by a general pledge over all existing and future claims of Expo-nant cannot be considered to be a preferential claim under Article I.22, 14° CEL.
Constitutional Court Annuls “Cash for Cars” Regime
In its judgment of 23 January 2020, the Constitutional Court annulled the Law of 30 March 2018 regarding the implementation of a mobility allowance (the Law) infor-mally known as the “Cash for Cars” regime which implied the exchange of the company car for a cash mobility allowance.
Reasons for Annulment
The Constitutional Court decided that the Law is discrim-inatory based on the following grounds:
• an unjustified social security and tax difference in treatment was created between employees who benefit from a cash mobility allowance (after having exchanged their company car) and employees who do not benefit from a cash mobility allowance. This is because the cash mobility allowance is subject to a favourable tax and social security treatment while regular salary is subject to much higher social security contributions and taxes;
• it is not proven that the cash mobility allowance would allow the objective of the Law to be met, i.e., reduc-ing the negative impact of company cars on mobility and the environment. In this respect, the Constitutional Court considered that:
• the employee who exchanges his/her company car for a cash mobility allowance can freely use this cash amount to purchase a personal car that may even be more polluting;
• an employee who benefits from more than one company car will be able to combine the benefit of a company car and the cash mobility allowance, as it is sufficient to exchange one company car to be entitled to the cash mobility allowance; and
• the cash mobility allowance is calculated on the basis of the catalogue price of the exchanged company car and is not linked to the actual dis-tance between the place of work and the place of residence of the employee.
Practical Consequences
In order to allow Parliament to adopt corrective legislation, the annulment will only have effect on 31 December 2020.
This means that employees are still entitled to a cash mobility allowance until the end of the year. As of 1 Janu-ary 2021, this cash mobility allowance will become subject to normal taxation and social security contributions, failing corrective legislation.
An alternative may be to offer the employees a mobility budget which was implemented by the Law of 17 March 2019 and is not affected by the judgment of the Constitu-tional Court.
The mobility budget is intended as a more sustainable alternative to a company car. It allows the employee to exchange his/her company car for a budget that may be spent for an environmentally friendly company car and/or other sustainable means of transportation, including pub-lic transport, a bicycle and car-sharing services. The bal-ance of this budget can be converted into cash. However, this amount is taxed more significantly and is therefore not thought to create a form of tax discrimination.
Proposal for Directive on Collective Representation Actions Enters Interinstitutional Negotiations
On 9 January 2020, the Legal Affairs Committee of the European Parliament (the EP) decided to open interinsti-tutional negotiations with representatives of the Council of the European Union (the Council) and of the European Commission in order to reach a compromise on the con-clusion of a Directive repealing Directive 2009/22/EC as regards representative actions for the protection of the collective interests of consumers (the Proposed Direc-tive). The Proposed Directive aims to facilitate redress for consumers if there are widespread infringements of their rights in more than one EU Member State (See, this News-letter, Volume 2018, No. 4, p. 19).
The Proposed Directive was initially approved in first read-ing by the EP in March 2019. On 28 November 2019, the Council also agreed on a general approach for the Pro-posed Directive (See, this Newsletter, Volume 2019, No. 11, p. 18). The EU institutions will now cooperate with a view to reconciling their positions in order to adopt the Proposed Directive without starting a second reading process.
