The French Competition Authority (FCA) was active in terms of enforcement in 2017. Overall, it issued 27 contentious decisions, of which nine imposed fines amounting to a total of €497.8 million. This amount is much less significant than the total of €1 billion and €1.2 billion imposed in 2014 and 2015 respectively, but exceeds by a considerable margin the aggregated amount of €203 million imposed in 2016. Of the nine fines imposed:

  1. two decisions sanctioned anticompetitive agreements with a value of €302.303 million (60.7 per cent);
  2. four decisions sanctioned abuses of dominance with fines of €125.4 million (25.2 per cent);
  3. c one decision sanctioned a breach of commitments within the context of a concentration with a fine of €40 million (8 per cent);
  4. one decision sanctioned anticompetitive importation exclusivity provisions in overseas territories based on a provision specific to French law with €0.1 million (0.2 per cent); and
  5. the final decision, the first of its kind in France, imposed a €30 million fine (6 per cent) on one company for obstructing an investigation into possible anticompetitive practices.

In addition, the FCA issued 236 decisions within the context of merger proceedings.

The FCA’s substantive position was confirmed in judicial appeals during 2017, with a few exceptions. Importantly, the FCA maintained close scrutiny of the online advertising sector, with the launch of a public consultation and the publication of the sector inquiry opinion on 6 March 2018. It also formally opened a healthcare sector inquiry in 2017, which, according to FCA President Isabelle de Silva, remains a priority for 2018.2 In addition to enforcement, the FCA continued providing guidance with the publication of a procedural notice on settlement procedures and compliance programmes. The FCA supplemented this notice with the publication on 8 March 2018 of the procedural notice draft regarding the settlement procedure.

On a separate note, in March 2017 France implemented the Antitrust Damages Directive.3 The new provisions aim to facilitate compensation for damage suffered by victims of competition law infringements in actions brought before the French courts. Finally, the Prime Minister issued a circular that provides guidance on the EU state aid framework to the administration bodies in charge of granting public financing, while at the EU level the European Commission (EC) analysed the adequacy of French financial support schemes in line with such framework.

We discuss some of this and other relevant developments in detail below.


The enforcement of Article L 420-1 of the French Commercial Code and Article 101 of the Treaty on the Functioning of the European Union (TFEU) prohibiting cartels and anticompetitive practices plays a key role in the allocation of resources at the FCA.

i Significant cases

In 2017, the FCA issued seven cartel decisions. The year was marked by a fine of €302 million imposed by the FCA upon the three leading manufacturers of PVC and linoleum floor coverings (and the relevant trade union) for a price-fixing cartel in the floor coverings sector. Not only was this the largest fine imposed by the FCA in 2017, it also exceeded the aggregate amount of fines imposed in 2016 (€203 million). The case involved the first combined use of the settlement procedure introduced by the Macron Act of 6 August 20154 and the leniency procedure (for two of the parties, including Tarkett, which itself was fined €165 million). Without the use of the two procedures, the fine would have been significantly higher.5

Furthermore, on 23 May 2017 the Court of Appeal of Paris (CAP) partially quashed a March 2015 FCA decision6 imposing a €192.7 million fine on 10 fresh dairy producers for participating in a price-fixing and volume-allocation cartel within the own-brand dairy products sector.7 For the CAP, the FCA violated the parties’ defence rights (resulting mainly from the late disclosure of a new econometric analysis assessing damage to the economy and providing too short a deadline in which to respond). The CAP also reduced the fines on other grounds. First, it re-quantified the level of gravity estimated by the FCA, as a result of (modulated) entry barriers and increased distributor buyer power, from 16 to 15 per cent. Second, it granted different individual reductions, including:

  • a a 15 per cent reduction to Novandie for not having entirely adhered to the cartel;
  • b a 10 (Novandie) and a 20 per cent (MLC and Laïta) reduction for minor involvement; and
  • c other reductions (30, 45 and 70 per cent to MLC, Novandie and Senagral, respectively) due to financial hardship.

As a result, the CAP reduced the aggregated fine, by approximately one-third, to roughly €130 million. An appeal against the CAP ruling is now pending before the French Supreme Court.8

Importantly, on 21 December 2017, the CAP issued its long-awaited ruling on a referral appeal against a 2010 FCA decision9 that imposed fines on 11 leading French banks amounting to €384.9 million. The banks allegedly agreed to charge unjustified interbank fees during the transition period towards using a new digital system for the processing and encashment of cheques (a common means of payment in France). They passed on the fee either directly (increasing cheque remittance) or indirectly (increasing the prices of other banking services). The CAP upheld the main elements of the FCA decision, but set it aside in terms of the fact that the FCA had increased fines imposed on four participating banks by 10 per cent as a result of their ‘active persuading role’. In this respect, the CAP agreed that the FCA can use its discretionary power to decide that the ‘active persuading role’ of some banks constitutes an aggravating factor for the purposes of the calculation of the fine, even though the parties did not act as ‘instigators’ or ‘leaders’ of the interbank cheque fee arrangement. The CAP, however, annulled the 10 per cent fine increase as the FCA had not provided evidence of such ‘active persuading role’ (e.g., with proof that the banks had tried to convince, insist on, persuade or even exerted pressure on other banks to accept their agreement).10

For its part, on 8 November 2017, the Supreme Court partially quashed a ruling of the CAP that had set aside an FCA decision11 imposing a fine on various undertakings for sharing future pricing information in the wallpaper market. According to the Supreme Court, the CAP wrongly included the sales of sister wallpaper companies of the infringing undertaking, which was mainly active in this market (single product undertaking), in the calculation of the fine.12

French courts set precedents on defence rights and legal privilege

On a separate note, 2017 offered the opportunity for French courts to confirm the defence rights protecting companies during dawn raids. In the Samsung Electronics France13 ruling of 4 May 2017, the French Supreme Court overturned a 2016 CAP order which found that the FCA dawn raids conducted on the company’s site in October 2013 were lawful. The Supreme Court ruled that the FCA prohibition on Samsung to call external counsel until the premises had been sealed breached Article L450-4 of the French Commercial Code, which empowers companies to get legal assistance from the time of notification of an inspection decision.

Importantly, on 8 November 2017, the CAP held in Whirlpool France14 that legal privilege covers emails between in-house counsel when they relate to the legal advice and strategies set up by a company’s external counsel. In this case, Whirlpool had sought advice from its external competition counsel for a defence strategy in anticipation of possible dawn raids, in an audit report based on recent raids conducted at competitors’ premises. When the FCA subsequently raided Whirlpool’s premises, it seized emails from Whirlpool in-house counsel – including with other members of the company – that analysed and commented on the audit report. The CAP quashed the seizure of these documents. It considered that the documents were covered by legal privilege in that they were based on the defence strategy prepared by the company’s external counsel, even if the emails included in-house counsels’ own comments, and did not emanate from, nor were addressed, to the external counsel.

France implements the Antitrust Damages Directive

On a separate note, in March 2017 France published an order and implementing decree incorporating the Antitrust Damages Directive into French law. These provisions, which were supplemented by a circular, set out a civil liability regime to facilitate private actions by victims of damages stemming from competition law infringements. These infringements are cartels and abuses of dominance, as well as infringements that are particular to the French legal framework such as abuse of economic dependence, exclusive (overseas) importation right agreements or abusive low pricing. The new regime applies to any claims resulting from an event giving rise to liability (mainly, the infringement) that took place as of 11 March 2017 (i.e., as of the entry into force of the order). This includes infringements that were initiated prior to that date but continued thereafter (continuing infringements). However, procedural rules on disclosure and access to evidence apply to proceedings initiated as of 26 December 2014.15

ii Outlook

The FCA is expected to continue prioritising tackling cartels when allocating resources internally. Furthermore, the recent settlement procedure may accelerate proceedings: more companies may be willing to settle, because settling parties are given a range (minimum to maximum amount) of the future fine, which provides welcome certainty for their future business strategies. This is in contrast to the former ‘non-challenge procedure’, where parties could only negotiate a 10 per cent fine reduction to be applied to an unknown fine amount.

In this respect, the FCA anticipated in a procedural notice of 19 October 2017 the intention to adopt a procedural notice providing guidance on the implementation conditions of the recent settlement procedure. On 8 March 2018, the FCA published the procedural notice draft and opened a public consultation period to gather views from the parties impacted by the recent settlement procedure. Stakeholders and practitioners welcome such guidance in this still-novel antitrust area in France.


i Significant cases

The FCA’s antitrust enforcement activity (other than cartels) will be particularly remembered with regard to the decision of 21 December 2017 imposing a €30 million fine on Brenntag SA (and its holding company, Brenntag AG) for the procedural obstruction of an investigation in the chemical sector. This is the first decision applying Article L 464-2.V of the French Commercial Code, which allows the FCA to impose financial penalties of up to 1 per cent of a company’s global turnover on any company obstructing FCA investigations. The fine stems from FCA investigation proceedings launched into alleged anticompetitive practices by Brenntag in the sector. To date, the FCA has not been able to decide on the merits of such proceedings because Brenntag breached its duty to cooperate in the investigation by, in particular, submitting late, incomplete and imprecise information, and refusing to provide information and documentation (notably invoices and extracts from their accounting software) despite repeated requests from the FCA. Brenntag’s lack of cooperation and obstructive behaviour was deemed serious and prejudicial to the investigation. Therefore, the FCA imposed a €30 million fine, which represents 7.8 per cent of Brenntag’s French turnover and 0.3 per cent of Brenntag’s group global turnover. The company has submitted an appeal against the decision before the CAP.16

In addition to Brenntag, the FCA made 16 contentious decisions (other than cartels) under Articles L 420-1 and L.420-2 of the French Commercial Code or Article 101 and 102 TFEU, or both, sanctioning anticompetitive practices and abuse of dominance. These decisions relate to a wide array of sectors ranging from digital terrestrial TV, energy and postal services to funeral services. We describe a few decisions below.

Former incumbents found to use non-reproducible advantages without justification to hinder competition

In March 2017, the FCA fined the former incumbent gas supplier ENGIE a total of €100 million for having abused its dominant position in the gas markets.17 The FCA found that ENGIE had, in particular, misused its database of customers eligible for regulated tariffs on gas (TRV18) (as heritage of its former monopoly) and its TRV business structure to promote its market-based gas and electricity supply contracts. In addition, ENGIE misleadingly raised doubts on the part of customers about the security of gas supply provided by competitors. The company decided to settle. This fact, together with a perceived lack of awareness of its obligations in a market that had recently been opened to competition, helped to mitigate the ceiling of the fine to €100 million. Further, in September 2017, the FCA accepted the company’s commitments in a separate case pertaining, in particular, to the pricing method applicable to certain market-based contracts for business that the FCA suspected could be predatory. The commitments included a price adjustment to reflect costs (in line with a reliable cost structure).19

Along the same lines, on 27 September 2017, the French Supreme Court partially quashed a ruling of the CAP that partially set aside an FCA decision20 fining EDF €13.5 million for having abused its dominant position in the electricity supply market, where it performed a public service function. For the FCA, EDF provided various resources that could not be replicated by competitors to its subsidiary EDF ENR, such as the customer database, to promote EDF ENR’s products in the photovoltaic solar power market. The FCA increased the fine (among others) by 25 per cent due to an aggravating factor, namely recidivism, yet the CAP invalidated this as the practices concerned were neither identical nor similar. In its 2017 ruling, the Supreme Court pointed out that recidivism requires identity or similarity with regards to the object or effects of the practices but does not require identity with regard to the practice being implemented or to the market concerned. It therefore quashed the CAP ruling in this respect and referred the case back to it.21

Funeral services company fined for bundling public service activities to competitive services

Confusion among customers regarding the dividing line between public services and the competitive services when they are conducted by the same company reached the funeral sector. On 27 July 2017, the FCA fined the crematorium and funeral services company Comtet €80,000 for misleading customers into believing that its public cremation service was tied to the provision of additional funeral products and services, and for unjustifiably charging extra fees for its cremation services to funeral service competitors as compared to its own customers. Comtet had earlier refused to accept the settlement proposed by the authorities.22

French healthcare sector under continuous scrutiny23

In June 2017, the French Supreme Court rejected an appeal by Cegedim against a CAP ruling upholding a July 2014 FCA decision that imposed a €5.7 million fine on the company. The FCA found that Cegedim’s refusal to grant a licence for the use of its medical information database OneKey to pharmaceutical companies using or intending to use Euris’ customer relationship management (CRM) software constituted discriminatory abuse. Cegedim, which was found to be dominant in the market of medical information databases for pharmaceutical companies for the organisation of medical visits (78 per cent), refused access to OneKey to Euris’ clients. However, it granted such access to pharmaceutical companies using Cegedim’s own or alternative competing CRM software. Because CRM software cannot function without access to medical information databases, Cegedim’s unjustified refusal resulted in Euris losing 70 per cent of its CRM software customers. Cegedim’s argument that refusal was justified by ongoing national counterfeiting proceedings taking place against Euris was rejected on grounds that a litigious situation cannot justify the implementation of anticompetitive practices.24

The FCA decision of 20 December 2017 imposing a €25 million fine on Janssen-Cilag (and its parent company Johnson & Johnson) for hindering the commercialisation of generic versions of its analgesic Durogesic® confirms the competition watchdog’s interest in the healthcare sector. The FCA decision stems from a complaint by Ratiopharm (now known as Teva Santé), which in October 2007 obtained a marketing authorisation (MA) under the mutual recognition procedure for a generic version of Durogesic (fentanyl used for severe chronic pain). According to the FCA, Janssen-Cilag aimed to convince the French public health authorities to refuse to issue MAs to generic versions of Durogesic, raising doubts about the similarity between Durogesic and generic versions and about the generic regulatory framework (notably, safety and quality standards), with the ultimate aim of hindering the arrival of generics. This prompted the authorities to initially refuse generic status and only grant MAs to generics at the end of 2008 with a warning that recommended monitoring of vulnerable patients when switching between fentanyl-based medicinal products. Furthermore, the company launched a global advertising campaign with the aim of disparaging generic versions of Durogesic among healthcare professionals and pharmacists, misinforming about the warning and conveying a negative message within a context already reluctant to accept generic versions (possibly explained by the lack of awareness regarding the MA procedure and fear of liability). Janssen-Cilag has appealed the decision before the CAP.

The FCA withdraws the 2012 Framework Document on antitrust compliance programmes

Importantly, on 19 October 2017, the FCA issued a procedural notice on the settlement procedure and compliance programmes (2017 Notice). The 2017 Notice withdraws the 2012 Framework Document on antitrust compliance programmes. Under the 2012 Framework Document, undertakings that submitted commitments to implement compliance programmes within the context of the ‘non-challenge’ procedure could benefit from a fine reduction if these commitments were relevant, credible and verifiable. The 2017 Notice re-emphasises the importance of antitrust compliance programmes to minimise the risks that companies infringe competition rules. However, it considers that they are part of the day-to-day management of undertakings and, as a matter of principle, no longer justify a fine reduction in the event of an antitrust infringement, particularly when an infringement involves very serious offences such as cartels and information exchanges on future pricing and business policy.

The CAP notes that submission to significantly unbalanced obligations must always be established

On 20 December 2017, the CAP dismissed the Minister of Economy’s action against a distributor’s central purchasing agency (ITM Alimentaire International – Group Les Mousquetaires) (Group).25 According to the Minister, the Group submitted (or attempted to submit) its suppliers to significant unbalanced obligations by including two excessively unbalanced clauses in their annual trade conventions in breach of Article L442-6.I.2 of the Commercial Code, and requested the CAP to order the Group to terminate the practices and pay €2 million. The CAP found that the Minister did not provide evidence of the submission (or attempt to). To do so, the Minister would have had to show evidence of the absence of effective negotiations, in particular, by proving that the suppliers had tried to exclude – or amend – the contested clauses during negotiations without success. In this respect, the submission could not be inferred only from the content of the clauses or from the distributor purchasing power as, in particular, there were suppliers with enough power to reject a clause detrimental to their interests (in fact, certain suppliers negotiated an amendment to one contested clause). This is the first time that the CAP has dismissed an action initiated by the Minister on grounds of significant imbalance.

National private damage actions: Orange ordered to compensate Digicel circa €350 million

2017 ended with a landmark ruling of the Paris Commercial Court ordering telecoms Orange (formerly, France Telecom) and its subsidiary Orange Caraïbe to pay a fine of circa €350 million to Digicel (formerly, Bouygues Telecom Caraïbes) for compensation of damages stemming from an abuse of dominance infringement. The case dates back to 2009 when the FCA imposed a €63 million fine on Orange26 – reduced to €60 million on appeal – for having abusively thwarted competition in the mobile telephone market in the French West Indies and Guyana zones through, among other things, the use of exclusivity agreements with independent distributors, exclusivity clauses with the single handsets repair centre, as well as a loyalty programme through which Orange Caraïbe customers could only use loyalty points for the acquisition of a new handset under the condition of a renewed 24-month contractual commitment. The FCA also found that France Telecom favoured Orange Caraïbe through a free rate option (Avantage Ameris) that offered volume-based discounts to professionals, companies and administrations for landline calls going to the Orange Caraïbe network, and through the use of margin-squeeze practices (‘landline to mobile’ offers to companies and administrations below an equally efficient competitor’s costs).

Digicel filed a damages action before the Paris Commercial Court to claim damages of €494 million. In its 18 December 2017 ruling27 – which came after a series of appeals – the Paris Commercial Court established that Digicel suffered damage as a result of the abusive loyalty programme, which had been amended to restrict the 24-month commitment when acquiring a cell phone, and the free rate option (Avantage Ameris). It then awarded damages of €179.94 million (which amount was mainly based on an economic study submitted by Digicel), plus annual interest at a rate of 10.4 per cent applicable since 10 March 2009, date of serving Orange before the courts for damage compensation, to compensate for the loss of opportunity resulting from the unavailability of capital (taux d’actualisation). Therefore, the final damages award amounted to around €350 million. Orange has (reportedly) submitted an appeal.

ii Outlook

The Brenntag decision shows that it is of the utmost importance that companies fully and faithfully cooperate throughout FCA investigations. In particular, companies must provide, within stated deadlines, complete and accurate responses (including documentation, where appropriate) to requests for information as well as during interviews. Companies must thus be particularly diligent in fulfilling their cooperation duties, especially as the FCA may sanction ‘simple negligence’28 leading to obstruction (without the need to prove any intent) and as the implementation of an internal compliance programme no longer plays a role in reducing the impact of a possible fine. Further, recent decisions concerning former incumbents make it clear that the FCA and the national courts will continue to monitor former monopolies to ensure that they do not misuse their market power in such markets with the aim of hindering competition in these or adjacent markets. The healthcare sector also remains a priority for the FCA within a context where the protection of public health must be balanced with the duty to ensure the sustainability of the healthcare systems (in particular, through the promotion of less expensive specialties such as generics).

In that respect, the CAP’s publication on 19 October 2017 of technical sheets providing guidance on how to compensate for economic damages constitutes a warning for companies to ensure compliance with the antitrust framework. Specifically, these sheets include guidance on how to ask for and get compensation for unfair competition and antitrust-related damages, which will certainly be helpful in any private actions initiated by third parties against companies that are in breach of competition rules.


2017 confirmed that digital and healthcare constitute a priority in the FCA agenda.

i Significant cases

The FCA makes progress in its online advertising sector inquiry

In 2017, the FCA launched, within the context of an online (display) advertising sector inquiry that it had opened in May 2016, a public consultation period so that interested stakeholders (advertisers, publishers, service providers, etc.) could provide comments on the competition and regulatory conditions within the sector (including data processing). The FCA analysed these comments together with those provided by advertisers, publishers, service providers and online operators (such as Facebook and Google) in response to interviews and questionnaires. The information collected from these responses led to preliminary findings that the sector is characterised by:29

  • a an increasing number of intermediaries between publishers and advertisers (such as demand and supply-side platforms);
  • b the reinforcement of market positions (notably, in display and social network advertising);30
  • c the automatic match of demand to the advertising space available; and
  • d the relevant value of proprietary or third-party data to improve the effectiveness of campaigns.

On 6 March 2018, the FCA published its (lengthy) opinion.31 The opinion confirms the preliminary findings and describes in detail the dynamics within a sector that made €4.2 billion in 2016 only in Europe (with France lagging behind the United Kingdom and Germany). The opinion states that online advertising in France is characterised by a strong increase (12 per cent in 2017). The drivers behind this increase are, in particular, the widespread use of programmatic technologies, social networks, search engines and video-sharing platforms, with targeted advertising playing an essential role in the sector development as a result of the use of collected data (user’s interests, products purchased, etc.). However, the sector is also under a fragile competitive equilibrium where, despite the presence of multiple stakeholders, two major operators (Facebook and Google) generate most of the revenue, mostly thanks to the huge amount of user data that they collect and process, user data being the key advantage in this market. In addition, Facebook and Google enjoy other competitive advantages, in particular:

  1. considerable popularity among users through services such as Google Search, YouTube, Chrome, GoogleMaps, WhatsApp, as well as the use of social networks (for Facebook);
  2. vertical integration both in the publishing and advertising intermediation, with Google even supplying indispensable intermediation services to advertisers and publishers;
  3. the offering of very precise targeting options to advertisers thanks to the data collected, in terms of number of users and type of data, not only from their own services but also from third-party sites and applications that use their advertising services; and
  4. Google enjoys a unique interface in both online display and search advertising services.

In addition, several publishers and intermediary advertising stakeholders raised concerns arising from certain stakeholders’ practices. These practices include, among others, bundling and tying, low pricing, exclusivity, discriminatory treatment, restrictions on interoperability as well as on the collection of and access to user data, and market leverage (in media audit and agency sectors, and the supply of advertising and of data processing services).

The General Rapporteur at the FCA will conduct a preliminary examination of the information collected in order to determine whether to pursue further with the formal opening of one (or more) investigations.

The FCA launches healthcare sector inquiry

On 20 November 2017, the FCA launched a healthcare sector inquiry into medicinal products and biomedical laboratories.32 The inquiry aims to address the challenges that the sector poses for the French insurance system and public health, and to assess the feasibility of more competitive conditions with the aim of reducing health expenditure. More specifically, the inquiry focuses on the pharmaceutical distribution chain and the mechanisms for setting the price of medicinal products.33

With regard to pharmaceutical distribution, the FCA will assess in particular the role of intermediaries (wholesaler distributors, purchasing group networks and pharmaceutical purchasing organisations). The new inquiry echoes the 2013 sector inquiry into the distribution of human medicines in private practice, which found that pharmaceutical companies offer weak discounts for non-reimbursable medicines (which prices are not set by law) to intermediaries, thus favouring direct-to-pharmacy sales. This might prevent pharmacies that order fewer quantities from offering competitive prices due to a lack of bargaining power in relation to pharmaceutical companies. Furthermore, the outcome of the 2013 sector enquiry recommended a controlled opening of the market for over-the-counter sales of non-prescription medicines to competition and softening the regulatory conditions for their online sale under conditions. The FCA will reassess its previous recommendations, which the government only partially took into consideration, and shall explore new ones with the aim of stimulating competition (such as new business models based on pharmacy chains, corporate pharmacy ownership, new advertising rules for pharmacies) as well as the possibility of softening online sales provisions (storage outside the pharmacy premises, a single website for various pharmacies, etc.). The FCA will extend the inquiry to biomedical laboratories.

In addition, the FCA will review the price-setting mechanisms for reimbursable medicinal products and, in particular, whether these should be modified with the aim of offering competitive prices while protecting public health. The FCA may consider the feasibility of new price-setting parameters, for example, to reward innovation or bring prices towards the competitive benchmark (set by medicines within the same therapeutic class or by generics). The inquiry will also examine possible effects across the distribution chain of discounts granted to pharmacies on generic medicines, and the extent of the hospitals’ bargaining power when tendering for medicinal products, so as to determine whether the existing regulatory framework or incentives should be modified.

ii Trends, developments and strategies

For the FCA, the in-depth analysis on online advertising by the General Rapporteur as well as the healthcare sector inquiry constitute priorities for 2018. In particular, the opening of the inquiry into the healthcare sector adds to enforcement actions in the area such as the decisions imposing fines for abuse of dominance on Cegedim (upheld by the Supreme Court) and on Janssen-Cilag, and the analysis of the competition conditions in the private clinic sector (with the authorisation of the acquisition of MédiPôle-Partenaires by Elsan).34 The FCA has already suggested that the inquiry may lead to recommendations aimed at softening regulatory constraints in the sector.


i Significant cases

The state aid legal framework is enforced by the EC and the Court of Justice of the European Union at an EU level. In 2017, the EC made over 40 state aid decisions concerning France. In general, the EC’s analysis did not raise objections to the schemes concerned, apart from a few exceptions where it issued conditional or negative decisions. The following cases are worth exploring.

The EC approves financial support to French outermost regions

On 15 March 2017, the EC approved (until the end of 2020) French government support in the form of reductions of the octroi de mer tax for a specific list of local products originating from the French outermost regions of Guadeloupe, Guyane, Martinique, Mayotte and La Réunion. The EC concluded that the operating aid granted was designed to compensate for the additional costs incurred by local companies due to structural disadvantages (such as the very small size of the market, geographic remoteness and supply difficulties) and was in line with EU state aid rules.35

Focus on electricity and renewable energy

In line with the Juncker Commission’s priorities for supporting investments in order to position the EU as a leader in renewable energy, and following the EC final report on the state aid sector inquiry into electricity capacity mechanisms in the EU (30 November 2016), the EC’s enforcement activity in 2017 paid close attention to financial schemes granted within these sectors. On 10 January 2017, the EC issued a press release confirming that French plans to grant a capital injection of €4.5 billion to the (listed) nuclear company Areva, which is majority-controlled (86.5 per cent) by the French state, complied with the EU state aid rules.36 The payment of the aid was subject to conditions, which included the sale of Areva’s nuclear reactor business to reduce distortions of competition caused by the financial support. On 29 May 2017, the EC approved the acquisition of New Areva NP, Areva’s nuclear reactor business, by the French energy company EDF under the EU merger control framework.37

Maritime transport support schemes under review38

In July 2017, the EC required France and Belgium to abolish the corporate tax exemptions granted to their ports. The French ports concerned were the 11 ‘grands ports maritimes’,39 the Port autonome de Paris and ports operated by chambers of industry and commerce. For the EC, the tax exemptions did not pursue a public interest objective (such as the promotion of multimodal transport) and provided a selective advantage in breach of the EU state aid rules. Therefore, it requested both Member States to subject these ports to normal national corporate taxes as of 1 January 2018 to avoid further distortions of competition. On 6 December 2017, France amended its national provisions in line with the EC decision.40 Furthermore, in separate proceedings related to maritime transport, the General Court confirmed that certain financial measures (including capital injections and payments within the context of restructuring and privatisation plans) featuring over €221.5 million granted in favour of the maritime transport company SNCM constituted unlawful state aid. France must now recover the aid from SNCM (now known as Maritima Ferries).41

National private damage actions: French Council of State confirms that illegal aid reclaimed from a beneficiary does not constitute compensable damage

Parties affected by unlawful state aid can seek damages, recovery or injunctive measures before national courts. In this respect, in a decision dated 7 June 2017 constituting the last stage in national appeal proceedings, the French Council of State confirmed that the beneficiary of unlawful state aid could not claim compensatory damages resulting from the devolution of the aid (and corresponding interests) even if the state belatedly requested recovery. The case originated with a tax exemption scheme provided in the French general tax code under which certain companies acquiring industrial firms in distress were exempted from the payment of corporate income tax for two years, which the EC qualified as unlawful aid in 2003.42 However, the French Council of State issued an order to recover the sum from the litigant beneficiary (Le Muselet Valentin) only in 2009.43

ii Trends, developments and strategies

The main development at a national level was the Prime Minister’s adoption on 26 April 2017 of a circular44 that outlines the EU state aid legal framework and related national policy. The circular, which replaces a 2006 circular,45 aims to guide administrations in charge of granting public financing as to the main aspects of the EU state aid framework, namely:

  • a the concept of state aid (detailing the criteria to be used to determine whether a national measure is likely to constitute state aid);
  • b the principles and exemptions (including the national framework as well as provisions governing the general economic interest services);
  • c the conditions under which compatible state aid may be granted;
  • d the procedural rules (including notification and transparency);
  • e the EC and national judicial enforcement control of state aid (including recovery); and
  • f an overview of the relevant texts.

Further, the circular reiterates certain principles of action. First, administrative bodies susceptible to dealing with state aid dossiers are required to appoint state aid advisers. Second, they are also encouraged to frame financial support under any of the state aid exemption regimes, as well as to pre-notify proposed schemes to the EC (in particular, when they pertain to novel or complex issues). Third, the impact assessment accompanying national draft bills must include a reinforced analysis of the compatibility of the proposed provisions with the state aid regime. Further, the ministries must set up an indicative list of cases to discuss with the EC, and communicate it at least once a year to the General Secretary in charge of European Affairs (SGAE) (a function within the Prime Minister’s office). They should also implement a plan for the assessment of financing aids. Finally, the circular confirms the creation of a French website for state aid46 that includes French legal databases pertaining to the granting of state aid.


During the course of 2017, the FCA issued 236 merger decisions under Articles L 430-1 to L 430-7 of the French Commercial Code, including 233 authorisations, of which 225 were authorised without commitments and eight were subject to commitments. In addition, the FCA reviewed previous commitments on two occasions. The main sectors affected by transactional activity during 2017 included the audiovisual, energy, telecommunications, healthcare and waste sectors. Of these decisions, the following are worth covering in brief.

i Significant cases

The 2017 French merger context has not been marked by a milestone decision such as the 2016 decision to impose a €80 million fine on Altice/Numericable and its subsidiary SFR group for breach of the standstill obligation during the acquisition of SFR by Altice subsidiary Numericable, the first decision of its kind in France.47 Notwithstanding this, the FCA maintained a busy enforcement schedule that even led to a new €40 million fine imposed on Altice and SFR for the failure to honour commitments agreed upon within the same merger proceedings.

Altice and SFR fined for failing to honour commitments

On 9 March 2017, the FCA fined Altice Luxembourg and SFR Group €40 million for violation of commitments that conditioned the approval of the acquisition by Numericable (now part of Altice Luxembourg) of SFR in October 2014. The commitments required the parties to honour an existing contract (Faber contract) with co-investors (including Bouygues Telecom) under which Altice and SFR would continue to roll out fibre optic networks for high-speed internet in high-density areas. In the opinion of the FCA, the parties failed to carry out more than half of the planned fibre optic connections (58 per cent), thus hindering competition. In addition to the fine, the FCA imposed injunctions requiring the parties to carry out the remaining connections within 12 months. For the first time since the Macron Act entered into force, granting additional corrective measures to the FCA should merger-related commitments fail to be fulfilled, the FCA pronounced the injunctions to be subject to periodic penalty payments.48 On 28 September 2017, the Council of State rejected the appeal against the FCA decision.49 Earlier, on 31 March 2017, the Council of State had upheld a separate €15 million fine imposed by the FCA in April 2016 for the parties’ failure to comply with other commitments made within the context of the same transaction: this separate case concerned the violation of structural commitments (divestiture of the mobile phone business of Outremer Telecom) as well as behavioural commitments (ensuring that Outremer Telecom remained economically viable pending divestiture, in particular, by not interfering with its commercial business strategy). For the Council of State, the parties failed to prove that the behavioural commitment, which was a distinct and separate commitment, had been met, despite the fact that the divestment finally occurred.50

A merger control decision in the private healthcare sector

On 23 June 2017, the FCA cleared the acquisition of MédiPôle-Partenaires, the third-largest private clinic group in France, by Elsan, the second-largest. The case stems from a referral from the EC, which considered that the French state would be in a better position to examine the effects of the transaction. The referral provided the FCA with the opportunity to examine the competition conditions in non-medical ancillary services within the private clinic sector. The FCA concluded that there was a risk that the transaction would significantly enhance the position of the new entity in particular, that the price of non-medical ancillary services (such as private boarding room supplements, or boarding and meals for visitors) would be increased as a result of the transaction, and that the quality of the healthcare services would be reduced in three French departments. It therefore authorised the acquisition in Phase I subject to structural (divestitures) and behavioural commitments.51

The FCA adapts conditions in pay-TV and free-TV merger transactions to market dynamics

On 22 June 2017, the FCA lifted or amended some of the injunctions that it had imposed in 2012 (for a five-year period) on Groupe Canal Plus (GCP) and Vivendi within the context of the acquisition of the pay-TV operator TPS (and Canal Satellite). For the FCA, the dynamics of the market conditions and negotiating power of GCP changed with the emergence of traditional competitors (Altice) and online video-on demand (VoD) or subscription VoD (SVoD) operators (such as Amazon or Netflix), which no longer justified maintaining some of the restrictions.52 As an example, the FCA amended injunctions regarding the acquisition of film rights (restrictions on GCP’s purchase of film rights from American studios were lifted, while the prohibition on framework agreements with French film rights holders was maintained) and the distribution of specialist channels (GCP was still required to include a minimal proportion of independent premium channels but lifted the prohibition on exclusive distribution agreements subject to certain conditions). Furthermore, the FCA amended injunctions on the acquisition of VoD rights and related services (the obligation to negotiate non-exclusive purchasing agreements for VoD and SVoD rights without bundling them with linear rights was lifted with regards to the acquisition of broadcasting rights for American films but was maintained for French films, and the ban on GCP entering into agreements providing for or encouraging the exclusive or privileged presence of its VoD or SVoD offering on internet service provider platforms was maintained in view of GCP’s position in the market for distribution of linear pay TV services). In view of the rapidly changing market dynamics, the new injunction framework must be maintained only until 31 December 2019.53

On the same day, the FCA lifted or amended certain commitments submitted by GCP in 2012 within the context of the acquisition of free-TV channels Direct 8 and Direct Star, and also in view of the dynamics of the market conditions and improved competition (Altice). In particular, the FCA amended and introduced commitments pertaining to the acquisition of (American and French) film rights, maintained the obligation to keep separate commercial teams in charge of negotiating the acquisition of these rights for recent American films and series and recent original French films to reduce the odds of GCP leveraging between its broadcasting rights for pay TV and free TV, and removed the commitment to organise a competitive bid for the divestiture of rights for major sporting competitions as GCP is no longer able to hold back a substantial portion of the broadcasting rights for these events from free-to-air channels. The new framework applies until 31 December 2019.54

The FCA deals with competition concerns in the collection of non-hazardous office waste in two simultaneous proceedings

On 21 December 2017, the FCA simultaneously decided, for the first time, on two separate procedures related partly to the same activity. In the case at hand, the FCA ended a contentious procedure against La Poste and authorised the creation of a full-function joint venture (JV) between La Poste and Suez in the sector of collection and recycling of non-hazardous waste.55 Both decisions were subject to similar commitments, and the FCA will ensure that the implementation of commitments within the contentious procedure will not be deprived of effect as a result of the implementation of the JV.56

First merger authorisation of two online platforms

Finally, it is worth mentioning that on 1 February 2018, the FCA unconditionally authorised the acquisition of Concept Multimédia (logic-immo.com) by the Axel Springer group (seloger.com) in the markets for property advertising on behalf of real estate professionals. The decision is of relevance as it is the first time that the FCA has examined a transaction between two online platforms (in this case, online property advertising platforms). For the assessment of the transaction, the FCA sent for the first time an online questionnaire to interested parties (more than 30,000 estate agencies). The FCA took into account the different particularities of the platforms and markets concerned and concluded that the transaction would not be likely to harm competition in the markets in question. It therefore granted unconditional clearance.57

Developments on the FNAC/Darty transaction

For its part, on 30 October 2017, the French Council of State rejected the Dray group’s appeal to grant interim suspension of the 28 July 2017 FCA decision refusing to accept Dray as the acquirer of two Darty retail outlets in the Paris area. The order stems from merger proceedings in which, on 27 July 2016, the FCA authorised the acquisition of Darty by FNAC (taking into account the competitive pressure of online sales), subject to it divesting itself of six FNAC or Darty retail outlets to purchasers that would have to be approved by the FCA.58

French companies also under the EC’s merger scrutiny during 2017

It is noteworthy that the hectic transactional activity in France in 2017 was complemented by transactions concerning French companies that were examined by the EC. These transactions related to various industries such as:

  1. aerospace: unconditional clearance of the acquisition of Zodiac Aerospace by Safran;
  2. automotive equipment: unconditional clearance of the acquisition of Opel by Peugeot, clearance of the acquisition of German FTE by French Valeo subject to divestments;
  3. telecommunications: acquisition of Telecom Italia by Vivendi subject to divestments; and
  4. the nuclear industry: unconditional clearance of the acquisition of Areva’s nuclear reactors by EDF.59
ii Trends, developments and strategies

In view of the increasing amount of merger activity in France, which takes up a great portion of the FCA’s resources, and of the current market dynamics, on 20 October 2017 the FCA launched an evaluation exercise with stakeholders with the aim of modernising and simplifying the French merger control framework. The exercise focuses on three aspects.

First, there is the possibility of adapting the simplification procedure, as the vast majority of decisions (96 per cent for data related from 2013 to 2016) does not create competition concerns. This could be done, for example, by including transactions with non-negligible overlaps in horizontal or vertical markets under the simplified procedure (as other Member States do) or subjecting them to a pre-notification obligation, or both, or even reducing the volume of information required to be submitted.

Second, there is the possibility of enlarging the merger framework to encompass transactions that are likely to raise concerns yet do not currently fall under the merger control provisions. This could be done by reintroducing market share thresholds, introducing a threshold based on the value of the consideration involved in the transaction – to capture transactions in the digital economy involving targets with insignificant revenues at the time of the acquisition – or even allowing ex post intervention in the case of substantial competition concerns.

Finally, the role of trustees is also being examined with the aim of looking for avenues to improve the execution of commitments and the exchanges between the trustees and the FCA merger services.60

vii Outlook

2018 should see new and simplified merger control provisions resulting from the evaluation exercise launched with stakeholders in 2017. Such new provisions should be up to date with the current market dynamics and ensure that FCA resources are allocated in priority to the most complex cases (such as Altice/Numericable and the first online platforms transaction). To do so, the current exercise may result in a proposal for the revision of thresholds or information to be provided, or both. This would exclude or facilitate non-problematic transactions, while on the other hand introduce criteria to ensure that problematic transactions that are not covered under the current provisions (especially in the digital sector) are duly assessed.

1 Florence Ninane is a partner and Patricia Carmona Botana is an associate at Allen & Overy LLP. The authors thank Camille Ammeloot and Chloé Spyratos for their assistance.

2 Option Droits&Affaires, Interview with I de Silva, FCA President, December 2017, p. 7.

3 Directive 2014/104/EU of the European Parliament and of the Council of 26 November 2014 on certain rules governing actions for damages under national law for infringements of the competition law provisions of the Member States and of the European Union (OJ L 349/1).

4 The settlement procedure introduced by the Macron Act replaces the previous ‘non-challenge’ procedure. Under the non-challenge procedure, companies could elect not to challenge the accusations in return for which they could negotiate a 10 per cent fine reduction (to be applied to an unknown fine amount). The recent settlement procedure allows the parties agreeing not to challenge the accusations to receive a settlement proposal setting the maximum and minimum amount of the fine incurred. If the parties accept the proposal, the FCA’s board sets the final amount within the proposed limits.

5 Decision 17-D-20 of 18 October 2017 regarding practices implemented in the hardwearing floor coverings sector. See also FCA press release of 19 October 2017: ‘Cartel in the Floor Coverings Sector, as well as Allen & Overy Global Cartel Enforcement 2017 Full-Year’, p. 7.

6 FCA decision 15-D-03.

7 Yoplait, the 11th cartel participant, received full immunity under the leniency programme.

8 CAP ruling No. 2015/08224. The FCA assesses ‘damage to the economy’ caused by anticompetitive infringements when determining the level of the fine (a particularity of the French competition framework).

9 FCA decision 10-D-28.

10 CAP ruling of 21 December 2017, case No. 2015/17638.

11 FCA decision 14-D-20.

12 Supreme Court ruling of 8 November 2017, case No. 1356 FS-D. The CAP had set aside the FCA decision on grounds that successive parent companies of the infringing undertaking were not jointly liable but liable pro rata (according to the duration of their ownership), as solidarity can only be exerted within the same economic unit.

13 Ruling No. 16-81.071 FS-D.

14 Order No. 14/13384.

15 Order No. 2017-303 and implementing Decree No. 2017-305 of 9 March 2017 on damages and interests actions stemming from anticompetitive practices (French Official Journal 0059 of 10 March 2017, texts Nos. 29 and 31). Circular of 23 March 2017 presenting the provisions of Order No. 2017-303 of 9 March 2017 on damages and interests actions stemming from anticompetitive practices and of implementing Decree No. 2017-305 of 9 March 2017. (NOR: JUSC1708788C).

16 Decision 17-D-27 of 21 December 2017 regarding obstructive practices implemented by Brenntag. See also FCA press release of 21 December 2017: ‘Chemical products sector’.

17 Decision 17-D-06 of 21 March 2017 regarding practices implemented in the sector of gas, electricity and energy services. See also FCA press release of 22 March 2017: ‘Energy sector’.

18 Tarifs réglementés de vente du gaz.

19 Decision 17-D-16 of 7 September 2017 regarding the practices implemented by ENGIE in the energy sector. See also FCA press release of 7 September 2017: ‘Energy sector’.

20 Decision 13-D-20.

21 Supreme Court ruling of 27 September 2017, case No. 1223 FS-D.

22 Decision 17-D-13 of 27 July 2017 regarding practices in the funeral services sector in the department of Ain. See also FCA press release: ‘Funeral services in the Ain department’. In addition, on 21 December
2017 the CAP partially overturned a 2016 decision that imposed a €20.6 million fine on the traditional terrestrial Hertzian broadcast actor TDF for, inter alia, having abusively intervened with municipalities with the aim of hindering competition in digital terrestrial television between 2006 and 2010. The CAP reduced the fine to €17.2 million in particular on the grounds that TDF had not acted as a public service entity (a position it no longer held) and that the abusive intervention with the municipalities had not been established (case No. 16/15499).

23 The authors originally commented on the Cegedim and Janssen-Cilag cases on Practical Law Company, ‘Supreme Court confirms discriminatory abuse in market of medical information databases for pharmaceutical companies’, August 2017; and ‘French antitrust watchdog fines pharmaceutical company for anti-generic strategy’, January 2018.

24 Supreme Court ruling of 21 June 2017, case No. 926 F-D.

25 CAP ruling No. 13/04879.

26 Decision 09-D-36.

27 Ruling of the Paris Commercial Court (15th chamber), RG No. 2009016849 of 18 December 2017.Similarly, on 5 July 2017, the CAP condemned on anticompetitive practices and abuse of dominant position grounds a spark plugs manufacturer (NGK Spark Plugs France) for damage suffered by a distributor that was refused access to its network. NGK’s argument that refusal was justified due to the distributor’s counterfeiting action was rejected on the grounds that unfair competition acts cannot justify the implementation of anticompetitive practices (case No. 15/12365). This case shows that stand-alone damage actions may be successful (the FCA refused to investigate the matter despite requests to do so from the General Directorate for Competition Policy, Consumer Affairs and Fraud Control).

28 P. 191 of the Brenntag decision.

29 FCA press release of 11 July 2017: ‘Online advertising, which includes the public consultation document’.

30 With online advertising investments now exceeding those made in television advertising.

31 Opinion 18-A-03 of 6 March 2018 regarding data usage in the online advertising sector.

32 FCA press release of 20 November 2017: ‘Healthcare’.

33 On 23 November 2017, the authors originally commented on the inquiry in Allen & Overy Life Sciences hub site: ‘French Competition Authority launches sector inquiry into medicinal products and biomedical laboratories’ (www.aolifescienceshub.com).

34 See Section VI.i on merger review.

35 SA46899 – ‘Operating aid scheme for outermost regions providing reductions on the Octroi de Mer tax’, 15 March 2017. The octroi de mer is in principle levied on imports as well as on locally produced goods. See EC press release of 15 March 2017: ‘State aid: Commission approves €475 million support in French outermost regions’.

36 SA44727 – Restructuring aid to Areva, 10 January 2017 (appealed before the General Court).

37 Case M7764.

38 SA38398 – Ports taxation in France and SA38393– Ports taxation in Belgium, 27 July 2017 (both appealed before the General Court). See also EC press release of 27 July 2017: ‘State aid: Commission requires Belgium and France to put an end to tax exemptions for ports’. As the financial scheme qualified as existing aid, the EC is not entitled to request recovery.

39 Bordeaux, Dunkerque, La Rochelle, Le Havre, Marseille, Nantes-Saint-Nazaire and Rouen, as well as Guadeloupe, Guyane, Martinique and Réunion.

40 Official Bulletin of Public Finances and Tax of 6 December 2017, French Ministry of Public Accounts, BOI-IS-CHAMP-30-60: ‘IS Ports exemption regime – Compliance with EU framework’ (IS – Scope of application and territoriality – Exemptions – Public bodies).

41 General Court, 6 July 2017, T-74/14, France v. Commission and T-1/15, SNCM v. Commission.

42 Decision 2004/343/CE, 16 December 2003 (JO 2004 L 108, p. 38); confirmed by the EU Court of Justice on 13 November 2008, Commission/France, C-214/07.

43 Council of State, 7 June 2017, Le Muselet Valentin, No. 386627.

44 Circular of 26 April 2017 on the application of EU state aid rules to economic activities (PRMX

45 Circular of 26 January 2006 on the application to local plans of the EU rules on state aid granted to undertakings (PRMX0609055C).

46 www.europe-en-france.gouv.fr/Centre-de-ressources.

47 Altice/Numericable and its subsidiary SFR group were fined €80 million for having implemented notifiable transactions prior to merger control clearance in 2014 through coordination of the parties’ business strategies and commercial behaviour (also known as gun-jumping) (FCA decision 16-D-24). The parties settled the case with the FCA.

48 Decision 17-D-04 of 8 March 2017 regarding compliance with the agreement in the decision authorising the acquisition of SFR by the Altice group, regarding the agreement with Bouygues Telecom of 9 November 2010. See also FCA press release of 9 March 2017: ‘Fibre-to-the-building connections under the so-called ‘Faber’ co-investment contract between SFR and Bouygues Telecom’.

49 Decision No. 409770.

50 Decision No. 401059.

51 Decision 17-DCC-95 of 23 June 2017 regarding the exclusive control of MédiPôle-Partenaires by Elsan. See also FCA press release: ‘Health care institutions sector’.

52 Decisions 17-DDC-92 and 17-DCC-93 of 22 June 2017 reviewing the commitments of decisions 14-DCC-50 and 12-DCC-100 of 23 July 2012 and 2 April 2014 regarding the exclusive control of TPS, CanalSatellite, Direct 8, Direct Star, Direct Productions, Direct Digital and Bolloré Intermédia by Vivendi SA and Canal Plus group. See also FCA press release of 22 June 2017: ‘Pay TV sector’.

53 On 18 December 2017, the FCA approved the new GCP reference offer for the inclusion of independent channels (decision 17-DAG-01 of 18 December 2017 with the annexed reference offer). See also FCA press release of 18 December 2017: ‘Pay TV’.

54 Decision 17-DCC-93. See also FCA press release of 22 June 2017: ‘Free television sector’. The decision has been appealed to the Council of State.

55 The JV activities would extend to other areas, in particular the sector of trading in non-hazardous office waste and paper and cardboard recycling.

56 Decision 17-DCC-209 of 21 December 2017 regarding the creation of a JV by La Poste and Suez RV France. The commitments related, in particular, to the use and misuse of un-reproducible competitive advantages linked to the universal postal service market, especially during the marketing and promotion of the JV services, as well as the supply (by La Poste to the JV) of services linked to offers in the collection of non-hazardous office waste at a price below cost. In particular, La Poste committed to preventing confusion between its office non-hazardous waste collection and recycling offers and its universal postal service offers, to implement a cost methodology to fix prices according to competition rules and to set up competition compliance programmes internally. The same commitments regarding the promotion and marketing of the JV services were made by the parties, with La Poste committing to regulating its behaviour regarding the promotion and marketing of the JV’s services and to pricing any services it provides to the JV at market price via a cost-handling methodology that complies with competition law.

57 Decision 17-DX-02. See also FCA press release of 1 February 2018: ‘Online property advertising’.

58 Order 414890.

59 See Section V.i.

60 As of 1 March 2018, the evaluation is ongoing.