i Merger control authority

Since a major overhaul of the French merger control regime (the Law on Modernisation of the Economy), the Competition Authority (FCA) has exclusive jurisdiction in merger control cases.

The Minister for the Economy, previously in charge of merger control in France, still holds residual powers: in theory, he or she may request the opening of an in-depth investigation and may reverse the FCA's decision on grounds of general interest. However, to our knowledge, such residual powers have yet to be applied.

ii Statutes, regulations and guidelines

Rules on French merger control procedure are set out in the French Commercial Code (FCC) under Articles L430-1 et seq and Articles R430-1 et seq (as last amended by Law No. 2015-990 of 6 August 2015).

The Authority adopted guidelines on merger control on 10 July 2013.2 These guidelines take into account the experience acquired by the FCA and refer to the practice of the Minister for the Economy, as well as of the European Commission (Commission) and to the 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 issues can be found in these guidelines. Even though these guidelines are not binding, the FCA is committed to applying them in each case unless specific circumstances or general interest considerations justify a derogation.

iii Transactions that require prior approval

Notification to the FCA 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 a concentration

The French definition of ‘concentration' is similar to that set out in the EU Merger Regulation (EUMR)(i.e., it applies whenever there is a lasting change of control over an undertaking).

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; or
  • c a joint venture that performs, on a lasting basis, all the functions of an autonomous economic entity (a full-function joint venture) is created.

In essence, the notion of ‘control' under French law is the same as that set out in the EUMR: it is the ability to exercise decisive influence over the activity of an undertaking (the EU Commission's consolidated jurisdictional notice is therefore relevant in this regard). Legally speaking, article L430-1 FCC defines ‘control' as all 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.

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 FCA's prior approval is required where:

  • a the combined worldwide pre-tax turnover of the parties exceeds €75 million;
  • b at least two of the parties concerned each have a pre-tax turnover in France exceeding €15 million in the retail sector; and
  • c the transaction does not fall within the scope of the EUMR.

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 FCA if:

  • a the combined worldwide pre-tax turnover of the parties exceeds €75 million;
  • 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; and
  • c the transaction does not fall within the scope of the EUMR.

The undertakings whose turnover are to be considered depend on the type of transaction. For instance, will be considered: 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, 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 pursuant to Article L.430-2 V. FCC, which sets out rules similar to those of Article 5 of the EUMR. In essence, the aim is to reflect the underlying economic reality of the market, by ensuring that (1) the turnover corresponds to the entire group of companies; (2) it is properly allocated geographically speaking; (3) internal turnover is excluded; and (4) the specificities of certain sectors are taken into account (e.g., in the financial services sector).

When jurisdictional thresholds are met, pre-merger filing is mandatory and suspensive (i.e., there is a stand-still clause). This applies to all concentrations, including foreign-to-foreign transactions, 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.

In case the parties fail to file a concentration or implement a concentration before the FCA clears it, the FCA may (1) order the parties to file and impose a periodic penalty payment until they do so; (2) impose a fine up to 5 per cent of the French turnover during the previous financial year (plus, where applicable, that of the acquired undertaking) for companies and up to €1.5 million for individuals. Transactions that have been completed without clearance are illegal and not enforceable. There are no criminal sanctions for not filing.

For instance, on 26 December 2013, the FCA 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 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 FCA, the FCA 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 FCA's request; and (2) Castel Frères did not intend to bypass competition rules.3 This last reason appears somewhat inconsistent with the finding that Castel had deliberately failed to file.

On 8 November 2016, the FCA issued a particularly significant decision relating to Altice's practices when it notified (as two separate cases) the acquisitions of, respectively, exclusive control over SFR and OTL. Various competitors had complained to the FCA that Altice had begun implementing both transactions before the FCA had approved them in, respectively, June and September 2014. The FCA then carried out dawn raids at Altice, SFR and OTL's premises. At the end of its investigation, the FCA concluded that Altice had indeed begun to interfere in the respective commercial policies of SFR and OTL before it had approved of the transactions, in particular by (1) approving the conditions at which SFR answered to a call for tender; (2) approving the conditions of a significant contract between SFR and a third party; (3) influencing SFR's pricing policy for its commercial offers; (4) coordinating with SFR for the acquisition of OTL. Altice and SFR also exchanged various commercially sensitive information, coordinated on the launch of a new commercial offer that marked a departure from SFR's previous commercial strategy, so that such offer could launch as of the FCA's clearance decision. Also, Altice and OTL similarly exchanged various sensitive information and Altice approved various operational decisions taken by OTL and it appointed OTL's CEO before the FCA's authorisation. The FCA therefore imposed a fine of €80 million to Altice for gun jumping. The European Commission has recently announced that it had sent a statement of objection to Altice for gun-jumping behaviour in the context of the acquisition of PT Portugal that the Commission had approved subject to conditions in February 2015.4


In 2016, 230 concentrations were reviewed and cleared by the FCA, six of which were cleared conditionally (that is, with remedies).

This marks an increase in the 184 cases reviewed and cleared by the FCA in 2015 (12 notifications were withdrawn in the course of 2015, which may happen in particular when the parties do not feel that they can secure a positive outcome or an outcome under conditions acceptable to them - this seems to have been the case for instance in the JCDecaux/Metrobus case where the parties announced that they were abandoning the concentration due to the unreasonable requests from the FCA5 or for the Auchan/Système U merger).

So far in 2017, the FCA has adopted 56 decision clearing concentrations, including two conditionally.

These figures include a number of simplified decisions, in particular concerning the sector of retail distribution, due to the particularly low thresholds for notifying such concentrations (in practice, many decisions may concern a change of control over a single retail store).

Below is a presentation of the main significant cases cleared by the FCA in 2016.

i Groupe Fnac/Darty

On 18 July 2016, the FCA cleared conditionally the acquisition of Darty by Groupe Fnac after a Phase II investigation. Both undertakings are active in particular in the retail distribution of electronic consumer goods. They are head-to-head competitors on the French and Belgian markets, with sometimes retail shops in the direct vicinity of one another. Following its traditional approach, the FCA would have defined catchment areas around each store of the target (Darty) and assessed the parties' market shares on such markets as a starting point for its competition analysis. In this instance, however, it did define catchment areas but, for the first time, it computed market shares also including sales made on the internet (internet sales of both pure players and of brick-and-mortar retailers). Applying this novel approach, the FCA only identified six catchment areas where the parties' market shares risked raising competition issues. Fnac committed to divest five stores to resolve the FCA's concerns in those six catchment areas.

ii Labeyrie/Aquaculteurs Landais/Groupe Aqualande

On 25 April 2016, the FCA conditionally authorised Labeyrie and Aquaculteurs Landais to take joint control of Groupe Aqualande (Groupe Aqualande was a pre-existing subsidiary of Aquaculture Landais). Both Labeyrie and Groupe Aqualand are active in the sector of production and sale of gourmet foods and in particular of smoked trout. Groupe Aqualand was also active on the market for the supply of fresh trout that is characterised by higher demand than supply. The FCA therefore identified horizontal risks (lessening of competition between Labeyrie and Groupe Aqualande for the transformation and sale of smoked trout), as well as vertical risks (input foreclosure as Labeyrie and Groupe Aqualande would buy a large share of Groupe Aqualande's fresh trout production) and conglomerate risks (given Labeyries' strong market share on the adjacent market for smoked salmon, Labeyrie could bundle the sale of smoked trout to the sale of smoked salmon in relation to retailers). The parties accordingly offered solely behavioural remedies for a period of five years: (1) in order to solve the vertical concerns, Groupe Aqualande committed to offer a contract for the supply of fresh trouts to a third party for volumes equivalent to those purchased by Labeyrie before the transaction; (2) in order to solve the horizontal concerns, Groupe Aqualande and Labeyrie committed to maintain independent and separate negotiating teams with the retailers; (3) in order to solve the conglomerate concerns, Labeyrie and Groupe Aqualande committed not to implement any binding or tying policies between smoked salmon and smoked trout. The Authority deemed such remedies sufficient to conditionally authorise the transaction.

iii Vinci Aéroports/Aéroport de Lyon

On 2 November 2016, the FCA authorised the acquisition of exclusive control over Aéroport de Lyon by Vinci Aéroport. The FCA essentially identified a risk of vertical foreclosure: after the transaction, Aéroport de Lyon will have to issue calls for tenders to carry out maintenance or construction works on its site. Vinci Aéroport, which is part of the larger construction firm Vinci, could favour its own parent company in the attribution of the various works. The parties therefore offered behavioural remedies in order to secure the FCA's greenlight. Vinci committed (1) to increase transparency of Aéroport de Lyon's procurement process, by ensuring that a representative of the Minister for the Economy and a representative of the Chamber of Commerce could take part in meetings of its procurement committee; (2) to implement procedural rules to ensure a separation between Aéroport de Lyon's procurement committee and the rest of the Vinci Group; (3) to appoint a monitoring trustee reporting to the FCA on all tenders above a given threshold. These commitments are applicable until 2047 (i.e., for 30 years). It may also be emphasised that most of the substantive analysis is based on an opinion that the FCA delivered in 2010 when an association lodged a request for its opinion on the process of airport privatisations.

iv Eco-emballages/Eco Folio

On 4 April 2017, the FCA approved the merger between Eco-emballages and Eco Folio. Both undertakings are active in the recycling sector, Eco-emballages being specialised in packaging and Eco Folio in paper recycling. The FCA considered that each of these undertakings was the sole government-licensed operator for its respective activity, so that each effectively enjoyed a monopoly situation. The FCA also noted that a new call for tender was issued by the government that set out new, more flexible, conditions to license operators for recycling. This was to facilitate entry of new actors and thus stimulate competition. In this context, the merger between Eco-emballages and Eco Folio would effectively impede potential competition, as Eco-emballages was well positioned to enter into Eco Folio's market and vice-versa. In order to solve the FCA's concerns, the parties committed to make available various information to any third party that would be willing to enter into the relevant markets.


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 FCA. Timetable management is therefore of the utmost importance.

Pre-notification contacts

Pre-notification contacts with the FCA are in theory optional but are very strongly advisable (except perhaps in some extremely simplified cases). Pre-notification is particularly recommended when there are uncertainties as to whether the transaction must be notified, or in the event of complex concentrations, or when the parties would like to have an initial idea, on a confidential basis, of the FCA's opinion on their project. To start this phase, parties can send a briefing memorandum on the transaction (describing in particular the parties, the envisaged transaction, the markets concerned, the competitors and the parties' market shares) or, more generally, a draft notification form. Informal meetings can also be arranged between the FCA and the parties if necessary. The FCA may also take the initiative to contact the parties, when it sees in the press that a transaction is announced or being negotiated.

In practice, the parties can end prenotification talks and formally notify a concentration when the FCA gives its go-ahead.

Formal filing

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 FCC. The content of the notification form and the documents to be provided to the FCA are also explained in the guidelines. The information requested is overall similar to the information requested in EU Merger control proceedings (with some small specificities).

Information communicated to the FCA in the notification form and during the review process may be disclosed when the FCA's decision is issued or in the course of its investigation (e.g., in the course of the market test). However, business secrets may be protected upon request.

Phase I

The Authority shall issue its decision within 25 working days of the day on which complete notification was received. To this end, the FCA may request further information from the parties. In practice, the FCA sends a letter declaring a file to be complete as from the day it received the complete file (i.e., contrary to practice at the EU level, the clock does not start to run automatically as the day of notification) and where the FCA considers that the file is incomplete it may send a letter stating that such and such information is missing thus preventing the clock from running.

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 FCA, 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. The Authority may also 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.

At the end of this period, if no competition concern remains unsolved, the FCA will clear the concentration. Otherwise, the process moves to Phase II.

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

Phase II

If the concentration raises serious doubts as to competition issues, the FCA will initiate an in-depth examination. The opening of Phase II usually leads to additional information requests. State-of-play meetings and hearings are generally also held. The Authority has to issue its decision within 65 working days as from the opening of Phase II. If commitments, or amendments to commitments previously submitted, are submitted 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 (i.e., it cannot 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 FCA, the Minister for the Economy can, on the basis of public interest grounds (industrial development, companies' competitiveness in an international context, social welfare, etc.), review the case himself 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 FCA guidelines, parties to a concentration may request to benefit from an anticipated decision, particularly in cases where a simplified notification form may be used (absence of overlap, for instance).

In two cases, the parties can proceed without having to wait for the FCA to issue its decision.

First, the parties may request an individual derogation to the duty to stand-still. The parties must justify that this derogation is strictly necessary. When the FCA grants this derogation (which may be subjected to conditions), the parties have to file a complete notification within three months. Should they fail to do so, the derogation becomes void. Obtaining such a derogation is exceptional. It applies mostly in the case of an offer to buy an undertaking subject to insolvency proceedings. It may also apply in some cases of acquisitions by investment funds, in the absence of overlap.

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 (this is thus similar to the rules of Article 7, paragraph 2, of the EU Merger Regulation).

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

Third parties are not directly involved in the merger control proceedings. They do not have access to the notification file. However, firstly, notifications are announced on the FCA's website with a summary of the concentration. This opens a right for them to submit observations. 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 FCA's website. Secondly, the FCA has the power, during both phases, to interview any third party when reviewing a concentration (clients, competitors, suppliers, etc.), which it generally does by sending out detailed questionnaires and, in the course of phase II proceedings, by organising hearings and inviting them to defend their case before the decision-making body of the FCA.

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. Remedies can only be proposed by the parties in the course of Phase I (the FCA considers in its guidelines that it may ‘invite' the parties to offer remedies). However, at the end of Phase II, the FCA may impose remedies in order to clear a transaction (to avoid this, parties can withdraw their notification before the end of Phase II).

In its guidelines, the FCA details and provides illustrative examples of its decision-making practice, which is characterised by a preference for structural remedies, including transfers of minority share holdings where necessary. However, in particular in the case of transactions leading to vertical integration or to conglomerate effects, the FCA indicates that it will pragmatically accept behavioural remedies (for which it provides several examples). A review of mergers over the past years suggests that the FCA is much more willing to accept behavioural commitments than the Commission might be (including to solve horizontal concerns, as the Labeyrie case described above shows).

For instance in 2015, in four cases out of six, the FCA conditioned its approval only to behavioural remedies,6 whereas in the two remaining cases, structural and behavioural remedies were taken.7 In 2016, the FCA accepted twice behavioural commitments, three times structural remedies and once a mix of both. In 2017, so far, the FCA has accepted once behavioural commitments and once structural remedies.

It is also interesting to note that the FCA has now a well-established practice of requesting alternative or crown-jewels remedies. In principle, such commitments remain confidential in the published decision. However, in the UGI/Totalgaz case, competitors of the merging parties lodged an appeal before the Administrative Supreme Court asking inter alia for the publication of the two alternative commitments. In an interim judgment, the Administrative Supreme Court ruled that the confidentiality of alternative commitments prevented it from controlling the legality of the decision, and thus ordered the FCA to disclose them.8 The disclosure of such commitments was in the end without effects on the legality of the decision (see, infra).

Whatever the type of remedy, the appointment of an independent trustee responsible for monitoring the implementation of the remedies is almost systematically required by the FCA. The trustee'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 FCA are specified in the model text for commitments.

Taking its inspiration from models developed by the Commission and other competition authorities, in its guidelines the FCA presents two models: one for divestiture commitments and the other for trustee mandates. These models can be adapted on a case-by-case basis although the FCA will try to stick to its model to the greatest extent possible and thus does not offer much flexibility in practice.

The Authority carefully monitors the implementation of remedies and may withdraw an authorisation in case of non-compliance. In such a case, the parties must either restore the situation to what it was before the transaction (i.e., ‘unwind' the operation) or re-notify the transaction to the FCA within a month (the duty to re-notify the transaction was challenged before the Constitutional Council which affirmed its constitutionality) .

If such failure to comply with the remedies is confirmed, the FCA has the power to impose financial penalties on the notifying parties of up to 5 per cent of their net turnover achieved in France. The FCA has not shied away from using this fining power. It began in 2011 when the FCA fined Canal Plus €30 million for failing to implement the behavioural commitments it had taken to obtain the green light to buy its rival TPS. Since then, the FCA has shown its willingness to scrutinise the full respect of commitments. In particular, the FCA fined Altice twice for failing to respect the commitments adopted to obtain the greenlight for its acquisition of SFR in 2014. Firstly, in April 2016, the FCA imposed a €15 million fine for non-compliance with the duty to preserve business's competitiveness pending its divestment. (Altice had committed to divest Outremer Telecom's mobile telephony business and, pending such divestiture, it increased Outremer Telecom's prices, which the FCA considered would impede its competitiveness).9 Secondly, in March 2017, the FCA imposed a €40 million fine to Altice for failing to respect a behavioural commitment relating to the proper performance of a contract for the creation of an optic fibre network.10

Appeals and judicial review

The Authority's decisions can be appealed before the Administrative Supreme Court within two months from the date of the notification of the FCA's decision (for the parties) or from the publication of this decision on the FCA's website (for third parties). Third parties will need to show they have an interest in challenging the decision.

The applicant will generally seek an annulment of the FCA decision (rendering it null and void) on procedural and substantive arguments. The appeal is not suspensive but the applicant can also bring summary proceedings requesting a stay of execution of the challenged decision (be it of the authorisation in itself as long as the transaction as not been implemented or of the remedies attached thereto as long as they have not been fully implemented). Such a stay of execution may be requested when it is urgent and there is prima facie a doubt as to the legality of the FCA's decision.

In the event that the FCA's decision is declared null and void (partially or totally), the FCA will have to reassess the case and 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.

The following cases are noteworthy.

Soufflet Agriculture/Sobra

On 17 October 2016, the Administrative Supreme Court dismissed the summary request for stay of execution of the FCA decision dated 21 September 2016 authorising the acquisition of sole control of Agri-Négoce by Axéréal participations.

The Administrative Supreme Court considered that, because the transaction had already been implemented, Soufflet and Sobra, competitors of the parties, could not request a stay of execution of the authorisation of the merger. It, however, considered in more detail whether they could request a stay of execution of the commitments. The Court also dismissed that request since it did not appear that the FCA's decision was prima facie illegal. In particular:

  • a the FCA did not have to order remedies that would stimulate competition going beyond the situation that existed before the FCA's authorisation (i.e., given that Axéréal had a 65 per cent market share before the transaction in a given local market where a remedy was necessary, that remedy did not have to bring Axaréal's market share below its pre-existing 65 per cent level);
  • b the FCA did not err in assessing the suitability of a given divestment: whereas Soufflet and Sobra challenged that the assets to be divested were not sufficiently viable, the Court considered that the market test had shown a market appetite to buy such assets and this was sufficient to prove their viability.

Compagnie des Gaz de Pétrole Primagaz (Primagaz) and Vitogaz France (Vitogaz), main competitors of the parties, appealed against the FCA's decision approving the acquisition of Totalgaz by UGI with remedies. First, they asked for a summary ruling to suspend the FCA's decision (and thus the transaction's closing) and, second, they challenged the decision on the merits.

On 9 July 2015, the Administrative Supreme Court declared the summary request for suspension inadmissible by the Court given inter alia that the parties to the mergers already implemented the transaction.11

On 6 July 2016, the Administrative Supreme Court issued its ruling on the substance, deciding notably that third parties could not challenge the choice of the FCA to adopt a phase I decision with commitments rather than opening a phase II investigation (they can however challenge that the commitments address all relevant competition concerns). It also set out that the FCA had to carry out a prospective analysis based on all relevant information and to characterise the potential effects on competition of the transaction based on a credible economic scenario. In this regard, the Administrative Supreme Court mostly approved the FCA's decision except for one market for which it considered that the FCA failed to identify some local markets on which anticompetitive effects could occur. It also considered that the FCA had failed to request commitments for all the risks to competition that it highlighted. Therefore, the Administrative Supreme Court partially annulled the FCA decision and ordered the FCA (1) to reconsider the situation of the local markets where it had failed to identify a risk to competition; and (2) to impose sufficient remedies to alleviate all identified risks.


In July 2012, the FCA authorised the acquisition of TPS and CanalSatellite by Goup Canal Plus (GCP) and Vivendi Universal subject to conditions, among which GCP was prevented to acquire any exclusive broadcasting rights on the cable platform of Numericable. Further to the clearance granted to Numericable/Altice in October 2014 for the acquisition of SFR, GCP contacted the FCA to ascertain whether the merger of SFR's and Numericable's platforms would change that condition. By letter of 31 March 2015, the FCA replied by an informal letter that the condition was indeed no longer relevant. Numericable challenged such a letter before the Administrative Supreme Court. On 21 March 2016, the Court dismissed the appeal on the merits,12 holding, however, that the informal letter of the FCA was challengeable before the Court.

v Regulatory review

There are some 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 FCA may 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 FCA 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,13 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 multi-jurisdictional 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 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 FCA 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 FCA and vice versa (Articles 4, Sections 4 and 5, and 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 FCA to review a concentration with an EU dimension.

Referrals from the Commission may give rise to a complicated Phase II investigation. Recently, the Commission referred the de facto merger between Auchan and System U. The Authority opened a Phase II, at the end of which, the parties withdrew their notification and abandoned the transaction in view of the risk of prohibition or onerous commitments.

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 of 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 does not have specific provisions dealing with ancillary restraints.

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 FCA of the existence of such restrictions, it is in their interest to do so when they have doubts as to their ancillary nature. In this review, it is obviously not bound by the parties' assessment. The guidelines also specify that the FCA could initiate antitrust proceedings against such restrictions that would not be ancillary to the transaction and that the parties would implement.

In March 2016, the FCA cleared the creation of a full-function JV and examined in particular three ancillary restraints. It considered two of them to be ancillary restraints on the basis of the EU Commission's notice (non-compete obligation for the parents in relation to the JV for the JV's lifetime and an exclusive distribution agreement for a period of five years). A commercial contract, the nature of which was kept confidential in the Authority's public decision, was, however, declared not to be directly related and necessary to the transaction.14

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 FCA will assess to what extent other elements could give the minority shareholder a decisive influence on the member. In a case, the FCA 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.15 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 case16 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 FCA 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 preclude the FCA 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 FCA, but does not prejudice the outcome of the substantive review.

In the case of a concentration involving the acquisition of an undertaking that would soon disappear without the transaction, the FCA can clear the case if, in essence, the disappearance of that undertaking would yield more negative effects for competition than the transaction would (following EU case law on the ‘failing firm defence').

The FCA may also strive to adopt a decision ahead of the phase I deadline, in order to ensure that its decision comes at a time that is fully compatible with the insolvency proceedings. For instance, on 23 May 2017 it authorised a concentration on the 17th day of Phase I.17

Concentrations involving investment funds

Merger control applies to concentrations involving investment funds. However, the FCA 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 take into account all undertakings controlled by the said investors.


Since the transfer of merger control from the Minister for the Economy to the FCA in 2009, the FCA has taken advantage of the new regulatory framework to create a robust and efficient merger control process. The FCA has the ability and the resources to tackle complex cases and it has clearly shown during its first years of enforcement that it will not hesitate to explore its own methods of reviewing mergers. The FCA has also shown that it does not shy away from strictly enforcing the rules on gun jumping and that it follows closely the implementation of the behavioural or structural commitments that it accepts in merger control proceedings.


Bredin Prat

Hugues Calvet is a partner at Bredin Prat specialising in antitrust law. His practice covers both transactional and litigation matters. He represents French and international companies before European and French courts and antitrust agencies. He has been involved in many landmark antitrust cases during the past 20 years. He is a former law clerk of the European Court of Justice in Luxembourg.


Bredin Prat

Olivier Billard is a partner at Bredin Prat, specialising in antitrust law. His expertise covers all aspects of competition law, and focuses on merger control, state aid and antitrust and private damages litigation cases before French and EU authorities and courts. Prior to joining Bredin Prat in 2001, he practised for several years at well-known French firms in both Paris and Brussels. He is a member of the Paris and Brussels Bars.

Guillaume Fabre

Bredin Prat

Guillaume Fabre is an associate at the Brussels office of Bredin Prat specialising in antitrust law. He was recently involved in significant merger cases before the French Competition Authority (as well as before the EU Commission).


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1 Hugues Calvet and Olivier Billard are partners at Bredin Prat. Guillaume Fabre is an associate at Bredin Prat. The authors would like to thank Sofia Merola for her contribution to the research for the writing of this chapter.

2 Available on the FCA's website: www.autoritedelaconcurrence.fr.

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

4 Commission press release available at http://europa.eu/rapid/press-release_IP-15-4805_en.htm.

5 www.jcdecaux.com/fr/communiques-de-presse/jcdecaux-decide-de-ne-pas-poursuivre-lacquisition-du-

6 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.

7 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.

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

9 Case No. 16-D-07.

10 Case No. 17-D-04.

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

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

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

14 Case No. 16-DCC-34.

15 Case No. 09-DCC-06.

16 Case No. 09-DCC-064.

17 Press release dated 23 May 2017: www.autoritedelaconcurrence.fr/user/standard.php?id_rub=662&id_article=2978&lang=fr.