Villo! contract under investigation by EU Commission

The European Commission is investigating the conditions of a number of contracts between the Brussels-Capital Region and advertising company JC Decaux, including its rights to run the city’s bike-hire system Villo!.

The complaint was brought to the Commission by Clear Channel, JC Decaux’s main competitor in public advertising. In 2008, Decaux was given the exclusive right to operate the Villo! system, where it also places its advertising panels. There are 360 Villo! stations spread across the capital. The system is financed by user fees and by advertising sold for the stations’ ad panels.

The contract with JC Decaux also included a tax relief and ad space rental conditions, which Clear Channel argues amount to illegal state aid and distortion of competition. A Commission spokesperson said that the rent and tax advantages had the appearance of “overcompensation”.

The Commission will also investigate an agreement for advertising hoardings signed with Brussels City in 1999. The contract stipulates that JC Decaux will decommission a number of hoardings by 2010. The company continued to use the hoardings after that date, however, but no longer paid tax or rent on them.