i Merger control authority

Further to a considerable reform of the French merger control regime (Law on Modernisation of the Economy) and since 2 March 2009, the Competition Authority (Authority) has exclusive jurisdiction in merger control cases.

The Minister for the Economy, previously in charge of merger control in France, still holds residual powers; he or she may request the opening of an in-depth investigation and may reverse the Authority’s decision on grounds of general interest.

ii Statutes, regulations and guidelines

Rules applying to the French merger control procedure are set out in the French Commercial Code under Articles L430-1 et seq and Articles R430-1 et seq. Law No. 2015-990 of 6 August 2015 (Macron Law) slightly amended the corpus of rules applicable to merger control.

In addition, new guidelines on merger control were adopted on 10 July 20132 after a public consultation was held to consider a draft interim text. This text is a revision of the previous guidelines on merger control of December 2009, and takes into account the experience acquired since then by the Authority and also refers to the practice elaborated under the jurisdiction of the Minister for the Economy, as well as to the practice of the European Commission (Commission) and case law of the Court of Justice of the European Union and the French Administrative Supreme Court. Answers to questions concerning both procedure and substantive assessment can be found in these guidelines.

The new guidelines on merger control aim to:

  • a facilitate the pre-notification process;
  • b specify the criteria for the simplified procedure;
  • c specify the conceptual framework for the analysis of relevant markets and the role of this analysis; and
  • d propose standard models for transfers of assets and trustee mandates.

Even though these guidelines are not binding, the Authority is committed to applying them in each case unless specific circumstances or general interest considerations justify derogation.

iii Transactions that require approval

Pre-merger notification to the Authority is required when the envisaged transaction qualifies as a concentration and, provided the Commission does not have jurisdiction, when turnover thresholds are met.

Definition of concentration

The French definition of ‘concentration’ is similar to that set out in the EU Merger Regulation (EUMR). Accordingly, there is a concentration where:

  • a two or more formerly independent undertakings merge; or
  • b one or several persons who already control at least one undertaking, or one or several undertakings, directly or indirectly acquire control of the whole or parts of one or more other undertakings.

In addition, the definition of ‘control’ under French law is the same as that set out in the EUMR. Thus, ‘control’ shall be constituted by rights, contracts or any other means that, either separately or in combination, and having regard to the factual or legal circumstances, enable a party to exercise a decisive influence on an undertaking, be it on a sole or joint basis, and in particular:

  • a ownership rights or possession of all or part of the assets of an undertaking; or
  • b the rights or contracts that confer a decisive influence on the composition, voting or decisions of an undertaking’s decision-making bodies. Minority interests can be caught by this definition of control provided that other legal or factual elements are taken into account (e.g., veto rights).

Transactions leading to changes in the quality of control (change from sole to joint control, and conversely, entry of an additional shareholder, replacement of an existing shareholder, etc.) fall within the scope of French merger control. French law is in line with EU practice regarding transactions leading to a change in control. In this respect, therefore, reference can be made to the Commission’s consolidated jurisdictional notice under Council Regulation (EC) No. 139/2004 on the control of concentrations between undertakings.

The creation of a joint venture that performs, on a lasting basis, all the functions of an autonomous economic entity (a full-function joint venture) also constitutes a concentration.

Jurisdictional thresholds
General thresholds

French merger control applies where the following cumulative conditions are met:

  • a all the undertakings that are party to the concentration have a worldwide aggregate pre-tax turnover in excess of €150 million;
  • b at least two of the parties concerned each have a pre-tax turnover in France exceeding €50 million; and
  • c the transaction does not fall within the scope of the EUMR.
Specific thresholds for the retail sector

If two or more parties involved in the transaction operate one or more retail stores, the Authority’s prior approval is required where:

  • a the combined worldwide pre-tax turnover of the parties exceeds €75 million; and
  • b at least two of the parties concerned each have a pre-tax turnover in France exceeding €15 million in the retail sector.
Specific thresholds for the overseas territories

When one party to the merger carries out part or all of its activity in one or several French overseas territories, the transaction has to be submitted to the Authority if:

  • a the combined worldwide pre-tax turnover of the parties exceeds €75 million; and
  • b each of at least two of the parties concerned achieved a pre-tax turnover exceeding €15 million (or €5 million if the retail sector is concerned) in at least one of the French overseas territories concerned. This threshold does not have to be reached by all the parties concerned in one and the same territory.

Which undertakings are to be considered as parties to the concentration or as parties concerned depends on the type of transaction. Thus, it will, for instance, be the merging entities in the case of a merger, the acquirer and the target (excluding the seller) in the case of an acquisition of sole control, and the controlling parent companies in the case of a newly created joint venture.

‘Turnover’ is the amount derived from the sale of products or the provision of services in the preceding financial year. Calculation of the relevant turnover may involve adjustments, depending on the nature of the transaction (e.g., the purchaser’s turnover including the turnover of its group and the target’s excluding the seller’s turnover in the case of a basic acquisition, aggregate turnover of the parent companies (and their groups) intending to share control in the case of a joint venture) and on the sector concerned (e.g., specific rules applying in the banking and insurance sectors).

When jurisdictional thresholds are met, pre-merger filing is mandatory. This applies to all concentrations, including foreign-to-foreign transactions and even in the absence of overlap between the parties’ activities.

Individuals and companies acquiring control of all or part of an undertaking are responsible for notifying. In the case of a merger, this obligation is incumbent upon the merging entities. In the case of a joint venture, the parent companies can file a joint notification.

Sanctions for not filing or for closing before clearance are as follows: corporate entities – up to 5 per cent of the turnover in France during the previous financial year (plus, where applicable, that of the acquired part generated in France); and individuals – up to €1.5 million. For instance, on 26 December 2013, the Authority imposed a fine of €4 million to Castel Frères, a company active in the wine sector, for failing to notify its acquisition of six companies that were part of the Patriarche group prior to closing the transaction on 6 May 2011. The Authority was informed of the acquisition by a third party, and found that there was evidence that Castel Frères engaged in such ‘gun-jumping’ on purpose in order to close the transaction rapidly. Even though the transaction was finally notified and authorised by the Authority on 2 July 2012, the Authority specified that this did not make the breach less serious. On appeal, the Administrative Supreme Court reduced the amount of the fine to €3 million, taking into account that (1) the transaction was notified shortly after the Authority’s request; and (2) Castel Frères did not intend to bypass competition rules.3

Finally, the parties may be required, subject to a periodic penalty, either to file the concentration or to demerge. Transactions that have been completed without clearance are illegal and not enforceable. There are no criminal sanctions for not filing.

In this regard, it is worth mentioning that the power of the Authority to withdraw merger approvals has been validated by a decision of the French Constitutional Court in the context of the appeal by Canal Plus and Vivendi against an order to re-notify the purchase of its former rival TPS.4 According to the Constitutional Court, rules allowing the withdrawal of merger clearances are legal and the French enforcement system ensures the impartiality of these decisions. According to this decision, the powers granted to the Authority ‘do not breach companies’ right to undertake business in a disproportionate manner’. The court also concluded that the French rules did not lead to any ‘confusion between the investigative function and that of decision-making within the competition authority’. The Authority’s power to start an investigation on its own decision does not prejudge the outcome, the ruling concludes.


In 2015, 192 concentrations were reviewed and cleared by the Authority, six of which were cleared conditionally (that is, with remedies).

It is possible to distinguish 2015 and the first semester of 2016 by different trends in merger control review by the Authority. First, we observe a clear acceptance of behavioural remedies, as will be discussed infra. Second, the Commission referred three important cases to the Authority: (1) the acquisition of Davigel by Bain Capital in the frozen and ice cream products, which was authorised with no remedies in October 2015;5 (2) the de facto merger of Auchan and System U for which the Authority recently opened an in-depth examination; and (3) the acquisition of Vitalia by Vedici Holding (CVC Capital Partners) in the health institution sector, which was cleared by the Authority in October 2015 without remedies.6 Third, the Administrative Supreme Court issued several decisions confirming the effectiveness of the judicial review in the field of merger control.

In 2015–2016, several major decisions were adopted that concern various industry sectors. We present some of the cases below.

i LDC/Glon and LDC/Agrial’s assets

Despite very high combined market shares, the Authority authorised two concentrations in the agribusiness. In a first decision of 24 February 2015, LDC Volaille (LDC) obtained unconditional clearance for the acquisition of Glon Sanders’ (Glon) poultry slaughtering and sales activities;7 and then, in a second decision of 24 February 2016, LDC also obtained unconditional clearance to acquire some assets from the Agrial group.8 In both cases, the transaction led to very high combined market shares (up to 70 or 80 per cent) in some products markets. However, the Authority considered the very strong countervailing buyer power; the presence of several competitors in the market, further to the transaction and the growing importance of imports in the poultry sector, which exercises strong competitive pressure on producers in France, and on LDC in particular. In the second case, during the market test, the majority of operators questioned indicated that the transaction was necessary to structure the market around solid industrial groups in order to face the strong competition from imports.

ii Totalgaz/UGI

On 18 May 2015, the Authority authorised with conditions the acquisition of Totalgaz SAS (Totalgaz), a subsidiary of the Total group, by UGI France, the parent company of Antargaz.9 The case was referred back by the Commission. Antargaz and Totalgaz are both present in France on the markets for bottled liquefied petroleum gas (LPG), fuel LPG and LPG sold in mini-bulk (for filling private tanks) and in intermediate and large-bulk both to end-consumers and to professionals (for filing professional tanks). The Authority considered that the operation would lead to significant horizontal concerns. First, it would significantly strengthen Antargaz’s presence nationwide on the sectors of intermediate and large bulk LPG whereas the competing LPG distributors were not able to maintain sufficient pressure to constrain the new entity’s behaviour, especially in relation to price. The new entity would own the main supply infrastructure (i.e., the sea import depots, namely Norgal and Cobogal, and the refineries), which could limit its competitors’ access to adequate sources of supply. Second, on the market for mini-bulk LPG, the new entity would have strong position at a local level through a significant increase in storage capacities. Thus, in order to prevent distortion of competition, UGI France agreed to transfer several depots and amend its supply agreement with Total. One of the interesting features of this case is that the Authority applied for the first time the ‘fix it first’ solution for one of the divestiture remedy. This solution requires the notifying party to identify, prior to the adoption of the decision with remedies, an acquirer to purchase the asset it has to divest.

iii Quick/Burger King

On 10 December 2015, the Authority authorised the acquisition of Quick by Burger King France, subject to one commitment.10 The transaction only raised concerns in Ajaccio (Corsica), where the availability of fast food is particularly low (no other fast-food chain restaurants, such as McDonald’s, KFC or Subway, are present in Corsica). Only Quick was present until Burger King entered the market in October 2015. As a consequence, the merging of Quick and Burger King was likely to recreate a monopoly in Ajaccio. To prevent that, Burger King committed to: (1) terminate the franchise agreement with the operator of the Quick restaurant in Ajaccio so that the latter can join the network of competing fast-food chain restaurants; and (2) not franchise the restaurant for a period of 10 years.


In its decision dated 21 January 2016,11 the Authority cleared a vertical concentration in the sector of television broadcasting, excluding any risk of foreclosure. Indeed, it authorised the acquisition by TF1 (a television channel) and FIFL of joint control of FLCP, a company whose subsidiaries were producing and selling television series. Although the Authority found that the transaction should not incur any risk of horizontal effects on competition, it carefully assessed the potential vertical effects underlined by one of TF1’s competitors (France Télévision). The latter feared that TF1, as a buyer of television programme broadcasting rights, might implement a foreclosure strategy, in other words, limit the ability of its competitors to purchase rights from FLCP’s subsidiary (France Télévision’s major programme was produced by Newen, FLCP’s subsidiary). Still, the Authority found that TF1 could not proceed to such a foreclosure strategy because of the number of other television programme suppliers or because of contractual provisions protecting France Télévision’s rights. Moreover, according to the Authority, TF1 should not be tempted to proceed, particularly because it would deprive it of substantive revenues. Thus, the Authority cleared the transaction without requiring any commitment.

In addition to the above cases, 2015 and the beginning of 2016 were marked by the monitoring of Numericable’s compliance with the commitments taken to acquire SFR, as cleared by the Authority in October 2014.12 For instance, the Authority and the ARCEP (the French regulatory authority in the telecom sector) approved the sale to Hiridjee of the Outremer Telecom mobile operations that Numericable agreed to divest in Réunion and Mayotte.13 In July 2015, the Authority approved Numericable’s reference offers for access to its cable network, further to amendments,14 so that competitors can replicate Numericable’s retail offers on its very high-speed cable network while deploying their own FttH networks; the Authority also fined Altice/Numericable for non-compliance with one of its commitments relating to the divestiture of Outremer Telecom’s mobile telephony business, as presented infra.15


i Waiting periods and time frames

Filing has a suspensive effect, which means that the parties cannot implement the merger before clearance is granted by the Authority. Timetable management is therefore of the utmost importance.

Pre-notification contacts

Pre-notification contacts with the Authority are optional but strongly advisable. Pre-notification is particularly recommended when there are uncertainties as to whether the transaction must be notified, or in the event of complex concentrations when the parties intend to include economic studies with their notification or when they would like to have an initial idea, on a confidential basis, of the Authority’s opinion on their project. To start this phase, the parties generally send a briefing memorandum on the transaction (describing the parties, the envisaged transaction, the markets concerned, the competitors and the parties’ market shares) or a draft notification form. Informal meetings can also be arranged between the Authority and the parties if necessary.

Formal filing

Filing can be made as soon as the parties are able to present a sufficiently well-advanced project. In other words, filing is possible when the parties can prove their firm intention to carry out the concentration. In practice, notification usually occurs after the parties have entered into a binding agreement. However, notification may also occur before a binding agreement is signed on the basis of, for instance, a signed letter of intent or a memorandum of understanding. In the case of a public offer, parties can file once the purchase or exchange offer is announced publicly.

Practically, notification must be made in a specific format prescribed by the French Commercial Code. The content of the notification form and the documents to be provided to the Authority are also specified in the Commercial Code and described in the guidelines. Information communicated to the Authority in the notification form and during the review process may be disclosed when the Authority’s decision is issued. However, business secrets may be protected upon request.


As to formal notification and provided, the notification form is deemed to be complete, the review of a concentration takes place in one or two phases.

Phase I

The Authority shall issue its assessment within 25 working days of the day on which complete notification was received. To this end, the Authority may request further information from the parties. The Authority will also usually conduct market tests to check information provided by the parties. Market tests are usually conducted through information requests sent to other market players (competitors, suppliers, customers).

When remedies are proposed to the Authority, the review period is automatically extended by 15 working days. Besides, parties may ask when necessary for the review period to be suspended (‘stop the clock’) for a period of up to 15 working days. Such possibility may be used to finalise commitments, for example. At the end of this period, if no particular competition concerns arise, the Authority will clear the concentration. Otherwise, the process moves on to Phase II.

Within five working days after the notification of the Authority’s clearance decision to the Minister for the Economy, the latter can ask the Authority to open a Phase II for the review of the concentration.

The Macron Law introduced the possibility for the Authority to stop the clock in Phase I either when parties failed to inform of new relevant facts that occurred before the submission of the filing or failed to provide all or part of the information requested within the deadline.

Phase II

If the concentration raises serious doubts as to competition issues, the Authority will initiate an in-depth examination. The opening of Phase II will usually lead to additional information requests. State-of-play meetings and hearings may also be held. The Authority will then issue its decision within 65 working days as from the opening of Phase II. If commitments, or amendments to commitments previously submitted, are sent less than 20 working days from the expiry of the 65-day period, the review period is extended by 20 working days from receipt of these commitments or amendments, and shall not exceed 85 working days as from the opening of Phase II. Here again, parties may ask, when necessary, to stop the clock for a period of up to 20 working days (to finalise the commitments, for example). The Authority may also stop the clock if parties failed to inform of new relevant facts when they occurred or failed to provide all or part of the information requested within the deadline, or third parties failed to communicate information requested because of the notifying parties.

Within 25 working days from the notification of the final decision of the Authority, the Minister for the Economy can, on the basis of public interest grounds (industrial development, companies’ competitiveness in an international context, social welfare, etc.), call the case and issue a decision based on the aforementioned grounds.

ii Parties’ ability to accelerate the review procedure

French law does not provide for an accelerated procedure. However, as provided in the new merger guidelines of July 2013, upon request, parties to a concentration may benefit from an anticipated decision, particularly in cases where a simplified notification form may be used (absence of overlap, for instance).

Besides this, there are two cases where the parties can proceed without having to wait for the Authority to issue its decision.

First, it is possible to obtain an individual derogation, which remains exceptional and difficult to obtain to the extent that it must be necessary and duly justified. For instance, derogation could be granted in the case of an offer to buy an undertaking subject to insolvency proceedings. It should nonetheless be stressed that in the case of acquisitions by investment funds, in the absence of overlap, the derogation is quite easily granted. The Macron Law added that derogations (1) may be granted upon condition; and (2) may cease to be effective if the Authority has not received a complete notification of the transaction three months after the closing of the transaction.

Second, there is an automatic derogation in the case of the exchange of securities on a regulated market. The rule is that takeover bids may always be implemented, provided that the acquirer does not exercise the voting rights attached to the securities at issue.

iii Third-party access to the file and rights to challenge mergers

Third parties are not directly involved in the merger control proceedings. Third parties do not have access to the notification file, but notifications are announced on the Authority’s website with a summary of the concentration, which open a right for them to submit observations. Furthermore, the works councils of the companies involved in the concentration must be informed within three days after publication of the notification of the concentration on the Authority’s website.

Moreover, the Authority has the power, during both phases, to interview any third party when reviewing a concentration (clients, competitors, suppliers, etc.).

Clearance and prohibition decisions, and also certain related decisions, particularly those regarding publication or approval of a purchaser of assets in the case of remedies, can be challenged by any third party having an interest in contesting such decision.

iv Resolution of authorities’ competition concerns, appeals and judicial review
Resolution of authorities’ competition concerns

Where competition problems are identified, parties to the concentration may submit remedies. Even though remedies are usually proposed by the parties, they can also be imposed by the Authority. The Macron Law recently empowered the Authority with the right to impose, subject to fines, injunctions or prescriptions as a substitute to the commitments the parties did not comply with. Such right enables the Authority to replace a commitment that would have become outdated, without withdrawing the clearance decision.

Remedies can be submitted at the time of formal notification or at any time during the review. The review period is automatically extended by 15 working days when remedies are submitted in Phase I; when they are submitted less than 20 working days before the end of Phase II, the review period ends 20 working days after the day the said remedies were submitted and shall not exceed 85 working days as from the opening of Phase II.

In the new guidelines on merger control, the Authority has detailed and provided illustrative examples of its decision-making practice, which is characterised by a preference for structural remedies, including transfers of minority share holdings where the particularities of the merger operation will allow it. However, in the case of complex operations, especially when they consist of the acquisition of suppliers or distributors (vertical integration) or when they lead to conglomerate effects, the Authority indicates that it will pragmatically accept behavioural remedies (for which it provides several examples). A review of mergers over the past years confirms such a trend.

For instance in 2015, in four cases out of six, the Authority conditioned its approval only to behavioural remedies,16 whereas in the two remaining cases, structural and behavioural remedies were taken.17

It is also interesting that in the UGI/Totalgaz case, among the remedies taken by the parties, the Authority accepted alternative remedies, the content of which had been made confidential in the published decision. Competitors of the merging parties lodged an appeal before the Administrative Supreme Court asking for the annulment of the decision on the merits and the publication of the two alternative commitments. In its judgment, the Administrative Supreme Court recently ruled that the confidentiality of alternative commitments prevented it from controlling the legality of the decision, and thus ordered the Authority to disclose them, postponing its ruling on the merits until the Authority make this disclosure.18 The appeal is still pending.

Whatever the type of remedy, the appointment of an independent officer responsible for monitoring the implementation of the remedies is almost systematically required by the Authority. This independent officer’s role, the provisions guaranteeing his or her independence with regard to the parties and the details of how he or she is to report on his or her assignment to the Authority are specified in the commitments.

Taking its inspiration from models developed by the Commission and other competition authorities, in the new guidelines the Authority also suggests two model forms for the transfer of assets and trustee mandates aimed at relevant parties contemplating structural remedies. These models can be adapted on a case-by-case basis. The model form for divestiture commitments lists the legal requirements and defines the terms of the commitment. It also contains a pre-formulation of the transfer procedure, as well as some basic guarantees that the Authority deems necessary to retain the viability of the assets transferred. The role of the trustee tasked with monitoring the commitments or the transfer procedure has moreover been specified: its status, the terms of its independence from the companies and, more generally, the conditions to obtain the Authority’s approval, as well as the tasks to be implemented by the trustee in practice, are set out in a model contract.

By using these examples, the Authority intends to facilitate, secure and homogenise the practice of notifying parties during the crucial phase of the commitments. Experience has shown that it is necessary to anticipate any potential transfers of assets very early in the process when a merger operation raises competition problems, particularly for the acquisition of a competitor firm or a merger between competitors.

It is also important to note that the Authority carefully monitors the implementation of remedies and may withdraw an authorisation in case of non-compliance. In such a case, the parties will then have to either restore the situation to what it was before the transaction (i.e., ‘unwind’ the operation) or re-notify the transaction to the Authority within a month. Compliance with commitments by the companies is central to the process of French merger control.

If such refusal to comply with the remedies is confirmed, the Authority is also able to impose financial penalties on the notifying parties of up to 5 per cent of their net turnover achieved in France. In this regard, the Authority recently fined Altice/Numéricable19 €15 million for non-compliance with one of the commitments taken for the acquisition of SFR. Indeed, at the time, Altice and Numéricable committed to divest Outremer Telecom’s mobile telephony business and, within this context, to maintain the viability, market value and competitiveness of this business and not interfere with the management of the divested concerns. However, the Authority found that Altice/Numéricable increased the subscription prices of Outremer Telecom in Réunion and Mayotte, which necessarily affects its competitiveness in these territories. As a consequence, Altice/Numéricable was considered to have failed to respect its commitments.

Appeals and judicial review

Appeals against the Authority’s decisions can be brought before the Administrative Supreme Court. The time limit to lodge such appeal is, for the parties, two months from the date of the notification of the Authority’s decision and, for third parties, two months from the publication of this decision on the Authority’s website.

Clearance and prohibition decisions, but also certain related decisions, particularly regarding publication or approval of a buyer of assets in the case of remedies, can be contested by the parties to the transaction as well as by any third party having an interest in contesting such decision.

Actions directed against the Authority’s decision are essentially actions for annulment. For example, the Administrative Supreme Court may examine matters relating to the compliance of proceedings, whether a transaction had to be reported, the definition of relevant markets and competitive assessment. When bringing an action for annulment, the applicant can also bring a claim in summary proceedings requesting suspension of the challenged decision. In the event of total or partial annulment of a decision taken by the Authority or by the Minister for the Economy, and, as the case may be, re-examination of the file, an updated notification will have to be filed within a period of two months from the date of notification of the Administrative Supreme Court’s decision.

Recently, the Administrative Supreme Court adopted several judgments in the field of merger control.


Compagnie des Gaz de Pétrole Primagaz (Primagaz) and Vitogaz France (Vitogaz), main competitors of the parties, appealed against the Authority’s decision approving the acquisition of Totalgaz by UGI with remedies. First, they asked for a summary ruling (suspension of the execution of the transaction and suspension of the approval decision) and, second, they challenged the decision on the merits. The summary request for suspension was dismissed by the Court:

  • a given that the parties to the mergers already implemented the transaction, and the request for suspension of the execution was inadmissible; and
  • b in the absence of emergency characterised by a sufficiently serious and immediate threat to the public interest, the Court considered that remedies did not seem insufficient or inadequate and dismissed the request. The second appeal (on the merits) is still pending, and the Court stayed the proceeding to the disclosure by the Authority of the alternative commitments taken by UGI (see supra).20

In July 2012, the Authority authorised the acquisition of TPS and CanalSatellite by Goup Canal Plus (GCP) and Vivendi Universal subject to injunctions, among which GCP was prevented to acquire any exclusive broadcasting rights on the cabled platform of Numericable. Further to the clearance granted to Numericable/Altice in October 2014 for the acquisition of SFR, GCP contacted the Authority to ascertain whether the merger of SFR’s and Numericable’s platforms would change the injunctions taken in 2012. By letter of 31 March 2015, the Authority replied that such an injunction was indeed no more relevant and thus no more enforceable. Numericable challenged such a deliberation before the Administrative Supreme Court, requesting its suspension and its annullment on the merits. In its judgment of 24 June 2015, the Court dismissed the summary request given the lack of emergency.21 In its judgment of 21 March 2016, the Court also dismissed the appeal on the merits.22 This judgment is mainly interesting for its developments regarding the fact that the deliberation of the Authority was challengeable before the Court.


In November 2014, the Authority cleared the acquisition by Carrefour group of six shopping malls from Unibail-Rodamco. Two competitors requested the annulment of the approval decision on the merits. In its judgment of 17 February 2016, the Administrative Supreme Court dismissed the appeal confirming the competitive assessment conducted by the Authority.

v Regulatory review

There is a number of specific areas in which specific merger rules apply, such as:

  • a the audiovisual sector, in which, unless otherwise agreed in international conventions to which France is a party, a foreign legal entity may not hold more than 20 per cent of the capital or voting rights of a company operating an audiovisual communications system in French. There are also specific rules on cross-media ownership; and
  • b the press sector, in which a single individual or legal entity may not control daily publications that represent more than 30 per cent of the total circulation of similar publications on the national market; for publications in French, the above 20 per cent rule applies.

In addition, in the course of Phase II, the Authority will request non-binding opinions from the relevant regulatory authorities. This applies in particular in the audiovisual sector (the Audiovisual Council), in the banking sector (the Credit Institutions and Investment Firms Committee, the Banking Commission and the Financial Markets Authority), the insurance sector (the Insurance Companies Committee), the energy sector (the Energy Regulation Commission) and the telecommunications sector (the Regulatory Authority for Electronic Communications and Post).


i Coordinating with other jurisdictions

When dealing with concentrations, the Authority and competition authorities of other states (including EU Member States) may have concurrent jurisdiction. The Authority cooperates with competition authorities of other Member States through the European Competition Network. In parallel, the European Competition Authorities (ECA), which groups together the competition authorities in the European Economic Area,23 has been considering ways in which the processing of mergers subject to investigation in more than one country can be made easier both for the parties to the merger and the authorities, while ensuring that cooperation between members takes place as far as national legislation allows this. According to the arrangements agreed upon by the ECA, when an ECA authority is informed by the notifying parties that they have also notified or will be notifying the concentration to other authorities within the ECA, the relevant officials will contact their counterparts in the other ECA authorities informing them of the notification. The relevant officials of the notified ECA authorities will then exchange views on the case without exchanging confidential information (unless national legislation makes this possible), and keep each other informed of the development of the case as appropriate. It should also be noted that, on 9 November 2011, the ECA adopted a set of best practices to handle cross-border mergers that do not benefit from EU ‘one-stop shop’ review (i.e., mergers reviewed by two or several ECAs simultaneously that are not subject to notification before the Commission). This document envisages cooperation in multijurisdictional cases where the exchange of information between ECAs could be valuable. The success of such cooperation depends to a great extent on the goodwill of the notifying parties, since ECAs will in most cases depend on them for permission to exchange confidential information.

Besides this, national competition authorities from the European Union recently published a report containing a complete overview of the state of play of information requirements for merger notification in the European Union (May 2016). This document intends to provide guidance to companies that must notify a transaction in several Member States.

However, the Authority and the Commission do not have concurrent jurisdiction. Concentrations with a Community dimension fall within the exclusive jurisdiction of the Commission, and reciprocally the Commission has no jurisdiction to deal with a concentration falling within the competence of the Member States.

In spite of this clear division of competence, some cases can, upon request and provided certain criteria are met, be re-attributed by the Commission to the Authority and vice versa (Articles 4§4, 4§5, 9 and 22 of the EUMR). Then, as a derogation from the general rules that determine jurisdiction based upon objectively determined turnover thresholds, various referral procedures may lead the Authority to review a concentration with an EU dimension.

Recently, the Commission partially referred the Bain Capital/Davigel Group concentration to the Authority, upon request of the parties.24 The Brake group, belonging to the investment fund Bain Capital (the acquirer) and the Davigel group (the target), are mainly active in the distribution of frozen products and ice creams. The Commission considered that the transaction was likely to create horizontal overlaps on the market at a national or infra-national level. The Commission noted that the Authority had great experience on this sector given that it had recently rendered a decision concerning competitors of Brake and Davigel.25 The Commission also acknowledged that the main impacts on competition of the transaction were bound to take place in France. On 27 October 2015, the Authority unconditionally authorised the transaction.26

More recently, the Commission fully referred back to the Authority the Vedici/Vitalia merger by which Vedici was to acquire the exclusive control of Vitalia.27 The parties are both present on the market of diagnosis and hospital treatment in France. According to the Commission, the transaction could lead to overlaps in some regions but its main effects are limited to the French territory. The transaction was cleared by the Authority with no conditions.28

Finally, the Commission also referred the de facto merger between Auchan and System U, for which the Authority recently opened a Phase II.

ii Dealing with special situations
Ancillary restraints

Agreements entered into parties to a concentration may restrict the parties’ freedom of action in the market and thus contain restrictions on competition. Commonly encountered restrictions in this context include in particular non-compete clauses imposed on the vendor, restrictions in licence agreements and purchase and supply obligations.

Contrary to EU law, which has long provided that such restraints are covered by the decision clearing the concentration if they are directly related to and necessary to the implementation of the concentration (ancillary restraints), the French merger control regulation did not have specific provisions dealing with ancillary restraints. Nevertheless, the French decisional practice had so far been in line with that of the European Union, the Minister for the Economy considering restrictions that were necessary and directly related to the concentration as covered by the clearance decision.

The Authority has clearly stated that it will scrutinise such restrictions, and to that end will use the Commission Notice on restrictions directly related to and necessary for concentration as guidelines.

The Authority considers that even though there is no obligation for the parties to a concentration to advise the Authority of the existence of such restraints, it is in their interest to do so to the extent that their compatibility with competition law can raise doubts.

It is further specified that, when examining such restraints, the criteria of direct relation and necessity will be assessed by the Authority, which is not bound by the parties regarding said restraints as such.

Recently, when the Authority cleared the acquisition of some assets of the Agrial group by LDC Volailles,29 it examined their contractual provision according to which Agrial committed to guarantee continuing purchase of a given volume of products from LDC group for a given period of time. The Authority referred to the Commission’s notice and acknowledged that this commitment was directly related to and necessary for the implementation of the transaction since it aims at allowing the two unprofitable target companies to keep a sufficient level of activity in order to make adequate investments and to redeploy their commercial activities.

Distribution agreements

The new thresholds specific to the retail sector have led to an increase in the number of notifications that involve distribution agreements (e.g., franchise contracts, contracts for car dealerships). In particular, several large distribution networks, whether large food or other specialised distribution networks, have opted for an organisation that contractually binds ‘network members’ (dealers, franchise holders, etc.) to a ‘network leader’ (which can be a licensor or a franchisor, for example). The application of merger control to relationships within such a distribution network involves examining various questions (nature of the control, calculation of turnover, evaluation of market power, etc.).

Distribution contracts are indeed likely, when considered together with other elements of law or of fact, to give the network leader a decisive influence on the business activities of the network members. The Authority will examine all clauses that allow the network leader to limit the members’ autonomy, both in implementing their sales policy (e.g., through contractual mechanisms that transfer all or part of the members’ commercial risk to the network leader) and in having the possibility to change network, and will determine whether they are sufficient to give the ‘network leader’ a decisive influence on its members’ business, namely, control, as defined by merger regulations.

In the same way, if the distribution network leader acquires a stake in the share capital of a member that enables it to exercise control alone or jointly over the member, the transaction will easily be qualified as a concentration.

The situation is less clear-cut if only a minority stake is acquired. Such an acquisition can have, as its main objective, the protection of minority shareholders’ financial interests as investors and is not sufficient a priori, as such, to grant a decisive influence on the franchise holder (the dealer or the cooperative member). In this case, the Authority will assess to what extent other elements could give the minority shareholder a decisive influence on the member. In a case, the Authority considered that a minority shareholder, together with the distribution agreement, granted the network leader a decisive influence since the articles of association could only be amended with the consent of the minority shareholder, provided that the member should carry on its business under a specific name.30 The same applies when the articles of association provide for a very long period of time before the members can leave the network or de facto prevents members from leaving the network for a very long time. Such provisions in the articles can be in consideration for stakes equal to a blocking minority or even for holding one preference share. In another case31 where the network leader owned only one preference share in a company operating a point of sale but where the articles of association granted the network leader, for a period of more than 10 years, the possibility of preventing any change of trade name, opposing any transfer of shares and obliging majority shareholders to sell the business if they operated a similar business with a competing trade name, the Authority considered that the network leader controlled the network member. In addition, the network leader had a right of first refusal in the event of sale of the business.

Depending on other prerogatives that may have been granted to the minority shareholder pursuant to the articles of association as regards the management of the business and depending on the provisions of the trade name agreement, the control exercised by the network leader on the members can be joint, with both parties necessarily having to agree on the sales policy for the points of sale, or exclusive, with the network leader alone being able to determine this policy. When the network leader already exercises joint control on the members, the transaction by which the network leader acquires exclusive control of the member also constitutes a concentration.

Financial distress and insolvency

The fact that a concentration takes place within the context of an insolvency proceeding does not prevent the Authority from reviewing it.

Therefore, filing remains mandatory upon purchasers acquiring all or part of a company subject to insolvency proceedings. The purchasers can however request derogation from the suspensive effect. Application for such derogation is examined briefly and is generally viewed favourably by the Authority. However, derogation in no way prejudges the outcome of the merger control. The Authority retains full jurisdiction to consider the merits of the case and can, after review, impose divestment of the target’s or the purchaser’s assets, and even prohibit the concentration if it adversely affects competition.

In the case of a concentration involving the acquisition of an undertaking that would soon disappear without the transaction, the Authority can consider clearing the case, even if it adversely affects competition. The Authority’s positions are inspired in this respect by the case law of the European Court of Justice, according to which in the event of a competitor purchasing a failing company, the transaction can nevertheless be authorised when it appears that the effects of the transaction would not be more unfavourable than those that would result from the disappearance of the failing company (the ‘failing firm defence’). The effects of a transaction can be considered to be no more damaging to competition than the disappearance of the failing company when, if not taken over by another undertaking, the financial difficulties would force the failing company out of the market; there is no less anticompetitive alternative purchaser than the notifying party; and the disappearance of the failing company would be no less damaging to consumers than the planned purchase.

Concentrations involving investment funds

Merger control applies to concentrations involving investment funds. However, the Authority acknowledges that specific issues may arise in the case of acquisitions of control by investment funds. An annex to the guidelines is dedicated to the general features of merger control applied to such structures, including questions such as the notion of control, turnover calculation, etc.

The Authority recalls that investors participating in investment funds do not usually exercise control. Control is normally exercised by the investment company that has set up the fund.

Allocation of turnover may also raise specific issues in the case of concentrations involving investment funds. Turnover of all portfolio companies held by the different funds over which the investment company exercises control will have to be taken into account.

Substantive assessment of a concentration involving an investment company raises specific issues as to the extent to which the investment company can be considered autonomous from the investors. In the case of a sufficiently autonomous investment company, the competitive assessment will take into account all undertakings over which it exercises decisive influence through its funds. When it appears that the investment company does not control any undertaking active in the same market in which the target is active or in an upstream, downstream or connected market, the case will not require further analysis. On the contrary, when an overlap would result from the transaction, the effects of the concentration on the market must be assessed.

In cases where the investment company cannot be considered sufficiently autonomous in relation to investors of the funds, the assessment shall cover all undertakings controlled by the said investors.


The transfer of merger control from the Minister for the Economy to the Authority alone is no doubt the cornerstone of the recent reform of the French competition enforcement framework. Beyond dropping the double jurisdiction system (the Minister for the Economy plus the Competition Council), other significant changes, such as new turnover thresholds and new procedural time limits, have been implemented. As illustrated above, although the new merger control regime is in line with past practice, the Authority has clearly shown during its first years of enforcement that it will not hesitate to explore its own methods of reviewing mergers. The new guidelines on merger control now provide more clarity regarding the specificities used by the Authority in reviewing mergers, and will hopefully improve the French merger control process in the future.


1 Hugues Calvet and Olivier Billard are partners at Bredin Prat. The authors would like to thank Ning-Ly Seng for her contribution to the writing of this chapter.

2 Available on the Authority’s website: www.autoritedelaconcurrence.fr.

3 Judgment of the Supreme Administrative Court dated 15 April 2016, appeal No 375658.

4 Case No. 2012-280 QPC.

5 Case No. 15-DCC-141.

6 Case No. 15-DCC-146.

7 Case No. 15-DCC-14.

8 Case No. 16-DCC-33. Not published yet.

9 Case No. 15-DCC-53.

10 Case No. 15-DCC-170.

11 Case No. 16-DCC-10.

12 Case No. 14-DCC-160.

13 Case No. 15-DCC-142.

14 Case No. 15-DAG-02.

15 Case No. 16-D-07.

16 Acquisition of Les Journaux du Midi by La Dépêche du Midi, decision dated 4 June 2015, Case No. 15-DCC-63; acquisition of Société Réunionnaise de Produits Pétroliers (SRPP) by Rubis Group, decision dated 13 May 2015, Case No. 15-DCC-104; acquisition of Société Anonyme de la Raffinerie des Antilles (SARA) by the Rubis Group, decision dated 13 May 2015, 15-DCC-54; acquisition of Quick by Burger King, decision dated 10 December 2015, Case No. 15-DCC-170.

17 Acquisition of Audika by William Demant, decision of 18 September 2015, Case No. 15-DCC-115; and acquisition of Totalgaz by UGI, decision of 15 May 2015, Case No. 15-DCC-53.

18 Judgment of the Administrative Supreme Court dated 15 April 2016, appeal No. 390457.

19 Case No. 16-D-07.

20 Judgment of the Administrative Supreme Court dated 9 July 2015, appeal No. 390454.

21 Judgment of the Administrative Supreme Court dated 24 June 2015, appeal No. 390640.

22 Judgment of the Administrative Supreme Court dated 21 March 2016, appeal No. 390023.

23 EU Member States and the Commission, Norway, Iceland, Liechtenstein and the EFTA Surveillance Authority.

24 M.7651.

25 Case No 15-DCC-80.

26 Case No 15-DCC-141.

27 M.7725.

28 Case No. 15-DCC-146.

29 Case No 16-DCC-33.

30 Case No. 09-DCC-06.

31 Case No. 09-DCC-064.