Abuse of economic dependency

You are dependent on a major customer or an exclusive supplier who suddenly changes terms unreasonably, drastically increases prices or threatens to end the partnership. This scenario is unfortunately recognizable for many entrepreneurs. Since August 22, 2020, Belgian law offers protection against this via Article IV.2/1 Code of Economic Law (CEL), which prohibits abuse of economic dependency. However, this is not a panacea, but a specific legal instrument with three strict, cumulative conditions that in practice set a high threshold.

A broader legal framework for protecting the ‘weaker’ company

The ban on the abuse of economic dependency is not an isolated case. It is the latest addition to an arsenal of legal instruments, both at the European and Belgian levels, designed to correct an imbalance in commercial relationships.

The european context: sector-specific protection

At the European level, there are targeted rules that protect weaker parties in specific sectors from unfair practices.

Directive 2019/633/EU: protection in the agricultural and food supply chain

This directive, transposed in Belgium through articles VI.109/4 to VI.109/8 CEL, protects smaller and medium-sized suppliers (such as farmers) against larger buyers (such as supermarkets). The core of this protection consists of two lists of unfair trade practices :

The blacklist (art. VI.109/5 CEL): These are practices that are always prohibited. Examples include paying suppliers late, canceling orders for perishable products on too short notice, unilaterally changing contract terms, or threatening commercial retaliation.
The gray list (art. VI.109/6 CEL): These are practices that are prohibited unless previously “clearly and unambiguously” agreed upon. This emphasizes transparency. Examples include returning unsold products unpaid or making the supplier pay for promotion, advertising or the decoration of the sales area.

Regulation 2019/1150/EU: fairness for business users of online platforms

This regulation (also called the ‘P2B Regulation’) is directly applicable and protects businesses that rely on online intermediary trading services (such as marketplaces, app stores, social media) to reach consumers. The regulation addresses the stronger bargaining power of these platforms by :

Transparency of general terms and conditions: Terms must be written in clear and understandable language. Changes must be given reasonable notice (at least 15 days).
Justification for limitation or termination: A platform that restricts, suspends or discontinues service to a business user must provide a clear justification for this with the specific facts and circumstances that led to the decision.

Specific belgian protection mechanisms

Belgian law has also long had specific rules to protect the weaker contracting party.

Book X CEL: protection in specific commercial contracts

Book X of the Code of Economic Law contains mandatory rules for certain types of commercial collaborations.

Commercial cooperation agreements: The law imposes a strict pre-contractual information requirement. The party offering a commercial formula (e.g., a franchisor) must provide a draft contract and a detailed information document at least one month before the conclusion of the agreement. Failure to comply may lead to the nullity of the agreement.
Commercial agency: The law provides extensive protection for the commercial agent, including through mandatory rules on compensation, notice periods and an enforcement fee upon termination of the contract.
Sales concessions: The law protects the concessionaire (e.g., a car dealer) in the unilateral termination of a concession of indefinite duration. It is noteworthy that Article X.35, 3° CEL extends the protection to situations that closely resemble economic dependence: namely, when “significant obligations are imposed on the concessionaire ... the burden of which is so heavy that the concessionaire would suffer great disadvantage in the event of termination.”.

Sales and delivery refusal as an unfair market practice (art. VI.104 CEL)

Prior to the introduction of the specific prohibition of abuse of economic dependency, the general standard of Article VI.104 CEL already offered a way out. This article prohibited any “act contrary to fair market practices” that could harm the professional interests of another company. Case law has developed the doctrine of wrongful refusal to sell or supply on this basis. This is strongly linked to abuse of law: although in principle a company has the freedom to choose with whom it contracts, that freedom is abused when the refusal manifestly exceeds the limits of a normal exercise of that right. This is the case when the refusal is arbitrary, done purely to harm, or creates an apparent imbalance between the parties' interests.

An in-depth analysis of Article IV.2/1 CEL

The prohibition of abuse of economic dependence was introduced to address an imbalance in contractual relationships between companies where the classic prohibition of abuse of dominance (which requires absolute dominance in the market) does not apply. It is crucial to understand that the law does not prohibit dependence itself, which is a normal feature in many commercial relationships, but only its abuse. To successfully invoke this article, a company must prove three cumulative conditions.

1. The first threshold: when is your business ‘economically dependent’?

The first and often most difficult hurdle is demonstrating that your company is in a position of economic dependency.

The legal definition: a state of subjection

The law defines this concept in Article I.6, 17° CEL as a “position of subordination of an enterprise in relation to one or more other enterprises characterized by the absence of a reasonably equivalent alternative, available within a reasonable time, on reasonable terms and at reasonable cost, which allows it or each of these enterprises to impose performance or conditions that cannot be obtained under normal market conditions“.

This definition contains two key elements:

No reasonable equivalent alternative is available.
This allows the powerful party to impose conditions unthinkable in a normal market.

The key question: is there a ‘reasonable equivalent alternative’?

This is the fulcrum of the analysis. Case law interprets this criterion very strictly and shows a clear reluctance to interfere with freedom of contract and freedom to conduct business. The issue is not whether you can find an identical or equally profitable partner, but rather whether there is a real possibility of continuing your business activities one way or another.

Recent case law illustrates this high threshold:

The Dr. Martens case: The Ghent Court of Appeal ruled that a shoe store that could no longer purchase Dr. Martens shoes was not economically dependent. The reasoning was that there are “several brands operating on the market offering lace-up shoes/boots.” The fact that these are not perfect substitutes and the store lost a popular brand was insufficient to speak of dependence (CoA Ghent 4 April 2022).
The vault case: The Antwerp Court of Appeal rejected the claim of a contractor who claimed to be dependent on a specific supplier of vaulting materials. The overriding argument was that after the breach, the contractor had sourced from competitors, albeit less efficiently, for six years. This was the ultimate proof that alternatives did exist (CoA Antwerp 20 October 2021).
The basic banking service saga: Even in a situation where a Belgian bank account seemed essential to an airline's local operations, the Brussels Court of Appeal ruled that the availability of accounts in other European banks constituted a reasonable alternative. The difficulties this posed to Belgian operations were not sufficient to speak of subordination (CoA Brussels 19 May 2022).

This case law demonstrates that the law does not protect a company's specific business model or profit margin, but only its fundamental ability to participate in economic activity. Therefore, the plaintiff's burden of proof is particularly heavy: you must show that switching partners is not merely undesirable or more expensive, but economically quasi-impossible or destructive.

Indicators in practice: what do judges weigh in?

To assess dependence, judges consider a series of concrete factors that were also mentioned in the parliamentary preparation of the law :

The dominant partner's share of the dependent firm's revenue.
The high awareness of a brand or the scarcity of a product.
The specific technology or know-how available to the dominant party.
Fear of retaliation (e.g., stopping all orders) if one does not agree to the new terms.

An important nuance is that if a company has voluntarily and knowingly placed itself in a dependent position (e.g., as a strategic choice to work exclusively with one partner), a claim of abuse is much less likely to succeed.

2. The second condition: what counts as ‘abuse’?

If a position of economic dependence is proven, it must then be proven that the dominant party abuses it. The law provides a non-exhaustive list of examples in IV/2/1 CEL:

Rejecting a sale, purchase or other transaction terms.
The direct or indirect imposition of unfair purchase or sale prices or other unfair contractual terms.
Limiting production, marketing or technical development to the detriment of consumers.
Applying unequal terms for equivalent performance (discrimination), putting a trading partner at a competitive disadvantage.
Conditioning the conclusion of a contract on the acceptance of additional services unrelated to the subject matter of the contract (tying).

Case law shows that refusal to sell or deliver, in particular, is often at the root of a claim:

The children's clothing store: A supplier suddenly and without proper justification stopped deliveries to a retailer just before the start of the winter season. The court ruled that this was abusive because the supplier knew that it was impossible for the retailer to purchase an alternative winter collection at that time. The timing and lack of justification were crucial here (Pres. Ent. Ghent 28 October 2020).
The shotgun case: A manufacturer still refused to deliver to a former concessionaire after the latter initiated a lawsuit for compensation. The court qualified this as abuse, as the refusal was clearly retaliatory and thus not based on a legitimate economic motive (Pres. Ent.. Antwerp 16 April 2021).
The AED device case: In contrast, a substantial price increase of 66% was not considered abusive. The supplier could show that the new prices were market-conform in the rest of Europe and could provide a plausible historical explanation for the adjustment. This shows that not every painful commercial decision is automatically abusive (Pres. Ent. Leuven 27 April 2021).

There is some legal uncertainty as to whether abuse can only occur within an existing, long-term contractual relationship. Although a Brussels court ruled at first instance that a refusal to grant a patent license (i.e., at a pre-contractual stage) could constitute abuse (Pres. Ent. Brussels (Fr) 26 July 2022), the Court of Appeal overturned that decision, stating that a lasting commercial relationship is a requirement (CoA Brussels 8 June 2023). This remains a moot point.

3. The competition law test: impact on the Belgian market

This is the third, often forgotten but equally crucial condition. It is not enough to prove a contractual dispute between two parties. The abuse must be “capable of affecting competition on the relevant Belgian market or a substantial part thereof.”.

The legislator deliberately placed this prohibition in Book IV CEL (‘Protection of Competition’). The aim is not primarily to protect individual companies, but to safeguard the structure and functioning of the market in the public interest. Thus, a claim based solely on harm to one's own business will fail. You must show how the abuse distorts competition in the broader market, for example by excluding a player, leading to higher prices for consumers, less choice or innovation.

In practice, we see a tension. Some first instance judges, especially in fast injunction proceedings, ignore this condition or fill it in very lightly. However, higher courts and more academically literate judges apply the condition strictly, often resulting in the dismissal of the claim. This requires a complex economic analysis that goes beyond the bilateral relationship.

4. The legal landscape: its relationship to other rules of the game

The prohibition against abuse of economic dependency does not stand alone. It must be seen in the context of other, related legal concepts.

Distinction with abuse of dominance (Art. IV.2 CEL)

The difference is fundamental. Abuse of a dominant position (Article IV.2 CEL) requires that a company has absolute power in a market, enabling it to behave independently of all its competitors and customers. Abuse of economic dependence (Article IV.2/1 CEL) vis a vis relative power in the specific relationship between two (or more) firms. Thus, a company can perfectly abuse economic dependence without having a general dominant position.

The interaction with unfair market practices (art. VI.104 CEL)

Before the introduction of Article IV.2/1 CEL, practices such as unlawful refusal to sell were already addressed through the general standard of Article VI.104 CEL, which prohibits any “act contrary to fair market practices.” A violation of Article IV.2/1 CEL is itself considered such a contrary act. Therefore, in practice, the two articles of law are often invoked together.

The ‘Equiform brake’: why competition law prevails

There is a risk of trying to circumvent the strict third condition (impact on competition) of Article IV.2/1 CEL by merely invoking the more general Article VI.104 CEL. However, the case law of the Court of Cassation, in particular the Equiform judgment (Cass. 7 January 2000), puts a stop to this. This ruling introduced the ‘negative reflex effect’: conduct that is permitted under specific competition law (e.g., because it does not affect competition) cannot still be prohibited under the general law of unfair market practices based on the same reasoning. This principle avoids eroding the specific requirements of competition law and forces the discussion back to the key question: is there an impact on the market structure?

The link to the new law of obligations (Art. 5.37 CC)

The new Civil Code introduced the defect of consent known as “abuse of dependence”. This doctrine states that there is abuse when there is an “apparent imbalance” of performance at the time of contracting, due to abuse by one party of the “weak position” of the other. Although this concept is tangentially related to economic dependence, the scope is broader (e.g., also emotional or intellectual dependence) and the context is different. In a purely commercial B2B relationship where economic dependence is central, the specific competition law prohibition of Article IV.2/1 CEL (as lex specialis) will, as a rule, take precedence over the general provision of the Civil Code.

Strategic insights for entrepreneurs

For the dependent: how do you build a strong case?

Document the absence of alternatives: Prove that you contacted other potential partners, gather offers and explain why they were not a ‘reasonable equivalent’ (e.g., unaffordable, unrealistic deadlines, insufficient quality).
Demonstrate the ‘abuse. Keep all written communications (emails, letters) that demonstrate unreasonable demands, sudden changes or unwarranted refusals.
Substantiate market impact: This is crucial. Argue how your exclusion or weakening reduces competition in the relevant market, to the detriment of other players or end consumers.

For the dominant party: how do you mitigate legal risks?

Maintain objective and consistent commercial policies: A reorganization of a distribution network is a legitimate reason for terminating relationships, provided this policy is applied consistently and non-discriminatorily.
Motivate important decisions: Ensure that decisions such as contract termination or significant price adjustments are based on business, defensible reasons. Avoid any appearance of arbitrariness or retaliation.
Respect reasonable notice periods: Especially in long-term commercial relationships, it is essential to give the other party sufficient time to seek an alternative.

Frequently asked questions (FAQ)

My main client suddenly stops cooperating. Is that an abuse of economic dependency?

Not necessary. It depends on the three cumulative conditions. Can you show that you cannot find other reasonable alternative customers within a reasonable time? Was the termination an ‘abuse’ (e.g., without motive, with intent to harm you)? And does this impact competition in your market? A mere contract termination falls under freedom of contract and is in principle permissible.

What is the difference between hard commercial negotiation and abuse?

Hard bargaining occurs when both parties still have some freedom of choice. Abuse begins where that freedom of choice disappears for one party due to the absence of alternatives, and the other party exploits that situation to impose terms that would be unacceptable under normal market conditions.

What steps can I take if I suspect I am a victim?

You have several options :

Injunction claim: Prompt proceedings before the president of the enterprose court to immediately stop the practice.
Claim on the merits: A proceeding to seek damages and/or to have unlawful contract clauses declared null and void.
Complaint to the Belgian Competition Authority (BCA): The BCA can launch an investigation and impose fines. This procedure can be done anonymously, but does not result in compensation for the victim.
Mediation: Through platforms such as(https://economie.fgov.be/nl/themas/online/belmed-onlinebemiddeling) an out-of-court solution can be sought.

Conclusion

The prohibition of abuse of economic dependency is an important, but at the same time complex and specialized legal weapon in Belgium. Jurisprudence shows restraint and places a high burden of proof, particularly regarding the absence of alternatives and the required impact on competition. Therefore, successful reliance on this legislation is impossible without a thorough factual and legal analysis, in which the nuances between competition law and the law of market practices are crucial.

Are you facing a complex case involving a dominant trading partner or do you suspect you are the victim of an abuse of economic dependency? Our attorneys, specialized in Belgian competition and economic law, are ready to analyze your case and discuss your strategic options. Feel free to contact us for an initial advice.