Belgium: VBB On Belgian Business Law | Volume 2023, NO 1

COMMERCIAL LAW

Book 1 ("General Provisions") and Book 5 ("Obligations") of Civil Code Enter Into Force

On 1 January 2023, Book 1 on "General provisions" of the Civil Code (Boek 1 "Algemene bepalingen" van het Burgerlijk Wetboek / Livre 1er "Dispositions générales" du Code civil - the Book on General Provisions) and Book 5 on "Obligations" (Boek 5 "Verbintenissen" van het Burgerlijk Wetboek / Livre 5 "Les obligations" du Code civil - the Book on Obligations) entered into force.

The Book on General Provisions (available in Dutch here and in French here) contains cross-sectional rules that are not specifically associated with one of the other Books of the New Civil Code. It includes generally applicable principles of civil law, such as the rules governing the temporal application of laws. Additionally, it covers the general theory of representation, the rules on the calculation of time periods and the prohibition of abuse of rights.

The Book on Obligations (available in Dutch here and in French here) contains the general rules that govern all obligations, as well as the general regime for contracts, legal facts (rechtsfeiten / faits juridiques) and quasi-contracts. The rules set out in this Book will apply to all legal acts (rechtshandelingen / actes juridiques) and legal facts as of 1 January 2023, subject to two exceptions that provide for the application of the old regime unless the parties agree otherwise:

1. future consequences of legal acts and legal facts which took place before 1 January 2023; and
2. legal acts and legal facts which took place after 1 January 2023 but relate to an obligation arising from a legal act or legal fact that took place before 1 January 2023.

For a discussion of both Books, see, this Newsletter, Volume 2022, No. 4 and Volume 2021, No. 2.

Statutory Interest Rates Increase Significantly

On 31 January 2023, the 2023 statutory interest rate applicable to civil matters and commercial relations with private individuals/natural persons was published in the Belgian Official Journal (Belgisch Staatsblad / Moniteur belge).

The statutory interest rate will amount to 5.25% in 2023, and has thus increased sharply compared to 2022, when it amounted to 1.50% (See, this Newsletter, Volume 2022, No. 2). The statutory interest rate applies unless otherwise agreed by contract.

In addition, the statutory interest rate for late payment in commercial transactions amounts to 10.5% during the first semester of 2023.

COMPETITION LAW

Belgian Competition Authority Fines Novartis for Warning against Off-label Use of Competing Ophthalmological Product and for Running Free Goods Programme

On 23 January 2023, the Belgian Competition Authority (BCA) imposed a fine of EUR 2,782,808 on Novartis for allegedly abusive behaviour. The BCA took the view that Novartis had abused a collective dominant position which it allegedly held with Roche in relation to therapies for wet age-related macular degeneration (AMD).

Novartis was found guilty of misleading ophthalmologists, hospitals and public authorities in warning against the off-label use of Avastin®, an oncology medicine of Roche, for the benefit of its own, more expensive product Lucentis® which, unlike Avastin®, is indicated for the treatment of AMD. According to the BCA, the position taken by Novartis was not supported by scientific evidence and is therefore misleading and abusive.

Novartis was also found to have abused its dominant position by running a "Free Goods Programme" of Lucentis® in the hospital channel. That programme went beyond what would have been possible under applicable sample rules. While the BCA did not address this issue, the programme may also have been in breach of the rules curbing the inducement of health professionals to prescribe contained in Article 10 of the Belgian Medicines Law of 25 March 1964.

The BCA thus partially emulated the proceedings which the French competition authority had pursued in 2020 against Genentech, Novartis and Roche in a case that gave rise to an aggregate fine of EUR 444 million (see, Van Bael & Bellis Life Sciences News and Insights of 9 September 2020). The BCA actually relied in part on theories of harm and evidence used by the French "Autorité de la Concurrence". At first sight, this may cast doubt on the fate of the Belgian decision, following the annulment of the French decision by the Paris Court of Appeal on 16 February 2023.

However, despite the ostensible similarities between the Belgian and French decisions, there are also important differences. First, notwithstanding the finding that both companies occupied a collective dominant position on the Belgian market for AMD medicines, the BCA only fined Novartis and not Roche (Genentech was not involved in the Belgian procedure). This is because the file contained no incriminating evidence against Roche.

Second, the BCA determined the period of infringement as extending between May 2 011 and 31 December 2015. This is because, starting in May 2011, several clinical study outcomes saw the light of day which demonstrated that the off-label use of Avastin® for the treatment of AMD did not carry more risk than the use of Lucentis®. Before May 2011, the degree of risk associated with the off-label use of Avastin® was still uncertain, which caused communications pointing to that risk in a measured tone to be legitimate and not abusive. Interestingly, the BCA's approach would not seem to contradict the verdict of the Paris Court of Appeal which decided only to focus on the conduct of Novartis and Roche before the entry into force of the "loi Bertrand" of 29 December 2011 which had restricted the off-label use of medicines. The resulting cut-off date therefore caused the Paris Court of Appeal also to look only at the very period during which doubts regarding the safety of the off-label use of Avastin® were legitimate. The regulatory obstacle for scrutinising the behaviour of Novartis and Roche in France after that date did not exist in Belgium and arguably allowed the BCA to review the messages of Novartis towards physicians and towards the authorities in the light of the new scientific evidence that had since emerged.

Third, the fine levied in Belgium is only a fraction of that imposed in France. As a matter of fact, the fine which the competition college (the decision-making body of the BCA) eventually adopted is also dramatically lower than the fine which the competition prosecutor had proposed, and which fell in a bracket between EUR 60,000,000 and EUR 70,000,000. This is because the competition college reduced the period of infringement (considered, as noted, to have started only in May 2011) and accepted a variety of mitigating circumstances in favour of Novartis.

Supreme Court Overturns Markets Court's Judgment Annulling Decision of Belgian Competition Authority to Reject Complaint by Football Club Virton On 5 January 2023, the Supreme Court (Hof van Cassatie / Cour de cassation) overturned a judgment delivered on 23 September 2020 by the Markets Court (Marktenhof / Cour des marchés - the Markets Court) of the Brussels Court of Appeal, which had itself annulled a decision by which the Belgian Competition Authority (Belgische Mededingingsautoriteit / Autorité belge de la Concurrence - the BCA) had denied interim measures sought by football club Royal Excelsior Virton (Virton) against the Royal Belgian Football Association (the RFBA).

This case started in 2020, when the RBFA refused to renew Virton's operating licence because that club had failed to comply with the continuity principle. The decision of the RBFA caused Virton to be relegated to a lower tier in the competition. Virton complained to the BCA that the RBFA had restricted competition and requested interim measures. The BCA denied Virton's request for interim measures, finding that, while it could not be "prima facie excluded" that some of the criteria applied by the RBFA were problematic, Virton did not establish that it would have satisfied the conditions to obtain a licence absent the application of these problematic criteria.

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