The Dominance and Monopolies Review: France
In addition to Article 102 of the Treaty on the Functioning of the European Union (TFEU), French law provides for specific rules applicable to dominant firms. Article L420-2 of the French Commercial Code provides for the prohibition of abuses of a dominant position, as well as abuses of economic dependence. A dominant position is defined based on a relevant market whereas a situation of economic dependence is defined with regard to a trading partner. Article L420-4 of the Commercial Code provides for a possible exemption from the prohibition of Article L420-2 when the practices at stake result from a regulation or if they have the effect of achieving economic progress – including creating and maintaining employment – while reserving for consumers a fair share of the resulting benefits and without allowing an undertaking to eliminate competition in respect of a substantial part of the products in question. The exemption is rarely applied in practice.2
The French Competition Authority (FCA) has jurisdiction over abuses of dominance practices. As an independent administrative body, the FCA may investigate abuse of dominance cases and impose fines of up to 10 per cent of the infringing companies' worldwide turnover. The FCA has not issued formal guidance on the way in which it applies Article L420-2 of the Commercial Code. The European Commission's guidance on Article 102 of the TFEU (formerly Article 82 of the EC Treaty), however, provides useful indications as to how Article L420-2 is applied in France.3 French judges can also directly apply the relevant provisions of the Commercial Code concerning abuses of dominance or abuses of economic dependence in the context of civil or commercial litigation.
Year in review
In 2020, the FCA issued 10 decisions on the basis of Article L420-2 of the Commercial Code. The FCA imposed fines in two cases in 2020, which amounted to a total of €662.3 million,4 and accepted commitments in one case.5 The FCA rejected four cases for lack of evidence in 2020,6 and dismissed two other abuse of dominance cases following an investigation on the merits.7 The FCA imposed interim measures in one case in 2020.8 In early 2021, the FCA has already rejected two cases for lack of evidence,9 and has already dismissed requests for interim measures in two cases allowing it to further investigate the merits of the cases.10
The most noteworthy decisions and rulings of 2020 are the following.
In Apple, alongside two alleged vertical practices (volume allocations and resale price maintenance), the FCA imposed a €218.3 million fine on Apple for having abused the situation of economic dependence of its Apple premium resellers (APRs) in relation to the distribution of its own-brand products.11 The abusive practices particularly consisted of delays and cancellations of deliveries, discriminatory treatment, unstable remuneration of the APRs (discounts and outstanding credit lines), and a discretionary implementation of Apple's sales terms. The FCA also held that Apple abused the APRs' situation of economic dependence because, under the APR contracts, their purchases of Apple products had to account for 70 per cent of their turnover, failing which they would lose their premium reseller status. The practices thus abusively restricted the APRs' commercial freedom and placed them at a competitive disadvantage compared to Apple's own distribution network. The decision follows a lengthy investigation initiated in 2012, when the then-largest French APR, eBizcuss, accused Apple of abusing its dominant position.
In Google v. Press publishers,12 following a request from the Syndicat des éditeurs de la presse magazine, the FCA imposed interim measures on Google regarding its implementation of the EU Copyright Directive into French law.13 This new legislation aims at protecting publishers and news agencies by notably granting them the right to allow or forbid the publication of their content by digital platforms – and, in particular, the Google search engine. However, a month before the entry into force of the French implementing legislation, Google unilaterally decided to stop displaying short abstracts, or 'snippets', of press articles unless press publishers and news agencies granted a licence to Google to display these snippets for free. In its April 2020 decision, the FCA considered that at this stage of the investigation, Google's refusal to enter into negotiations in relation to payment for the use of the publishers' editorial content could qualify as an attempt to impose unfair terms and may amount to an abuse of a dominant position as well as an abuse of economic dependence. The FCA thus notably compelled Google to negotiate in good faith, and according to transparent, objective and non-discriminatory criteria, the payment due to press publishers and news agents for any re-use of protected content. In addition, during negotiations, Google must refrain from altering the referencing of the protected content on its search engine. Google also cannot undermine the effects of negotiations by requiring publishers to use some of its services or otherwise affect its other economic relations with publishers. On 8 October 2020,14 the Paris Court of Appeal rejected Google's appeal against the FCA decision and thereby approved the FCA's third interim measures case against the tech giant in a decade. Pending the FCA's decision on the merits, the interim measures remain applicable.
In AMD Treatment, the FCA imposed a €444 million fine on pharmaceutical laboratories Novartis and Roche, and on Roche's subsidiary Genentech, for several abuses of dominant position in the market for age-related macular degeneration (AMD) treatment.15 In particular, the FCA found that Novartis and Roche, by adopting certain behaviours and using alarmist language in their external communications, purposely tried to discourage public authorities from approving the 'off-label' use of Roche's cancer drug Avastin to treat AMD. At the time, because Avastin was about 30 times cheaper than Lucentis, some doctors had already decided to prescribe Avastin to their patients to treat AMD, but the practice was not widespread, as the lack of administrative approval meant that doctors faced higher risks in terms of medical responsibility, and the drug was not reimbursed by the French health insurance system. The companies' purpose was thus allegedly to preserve the sales of Novartis' approved drug Lucentis, for which Roche also received royalties. In this context, following a five-year investigation, the FCA found that (1) Novartis had abused its dominant position by disparaging Avastin before patient associations, health professionals and the general public, and (2) Novartis, Roche and Genentech had abused their collective dominant position by implementing blocking tactics to delay the public authorities' initiatives to regulate the off-label use of Avastin for the treatment of AMD.
Market definition and market power
Under French law, as under EU law, regulators and judges must typically start their analysis by defining the relevant markets where the alleged practices took place. They then analyse whether a situation of dominance (single or collective dominance) or of 'economic dependence' can be established in the relevant market before assessing the existence of an abuse.
i Market definition
The FCA defines relevant markets mostly based on qualitative criteria, although it may also rely on an econometric analysis. To assess demand-side substitution, the FCA takes into account the nature and use of a product, the price differences between similar products, consumer preferences, the legal environment, the brand image of the products and the distribution channels. If the data are available, the FCA may also use quantitative techniques such as cross-elasticity of demand to delineate product markets.
In situations where there are complementary products (e.g., hardware and consumables or maintenance services), the FCA determines, based on a combination of qualitative and quantitative criteria, whether a single market exists for both or whether the products form distinct product markets. In Nespresso,16 the FCA defined a primary market for espresso pod coffee machines, and a distinct secondary market composed only of coffee capsules compatible with Nespresso coffee machines. The FCA found that espresso pod coffee machines and coffee capsules did not belong to the same product market because coffee machines and coffee capsules are not necessarily bought simultaneously or at the same shops and are not manufactured and marketed by the same firms. In addition, a Nespresso internal document considered that the two products were separate. The FCA also found that the secondary market could be narrowly defined as only including coffee capsules compatible with Nespresso machines because users of Nespresso machines were not in a position to use any other kind of capsule. Conversely, in Photocopiers,17 pursuant to the Pelikan v. Kyocera EU case law,18 the FCA refused to define a separate secondary market for the maintenance of photocopiers. The FCA found that when buying photocopiers, purchasers also take into account the price of maintenance services. The FCA further found that the intense competition at the primary level and the short life cycle of photocopiers (three to five years) exerted a sufficient competitive constraint on the conditions of maintenance services at the secondary level. The FCA applied the same reasoning in IT Maintenance 19 where it refused to identify a secondary maintenance market in all cases where maintenance contracts are purchased alongside a server or storage system, given that customers take into account maintenance conditions when purchasing a server or a storage system and the primary market for servers and storage systems is very competitive.
Supply-side substitution also constitutes a relevant criterion for market definition. In Mobile Telephony,20 the FCA found that each operator held a monopoly in the wholesale market for the termination of voice calls on its own network because of, inter alia, the lack of supply-side substitution, as only the terminating operator is capable of localising the recipient of the call. The Court of Appeal followed the same reasoning.21
In Gibmedia,22 in which the FCA found an abuse of dominance against Google, the FCA defined a market for online search advertising based on both demand-side and supply-side substitution factors. The FCA first considered that online advertising is separate from offline advertising, in line with EU and French past case law.23 The FCA further retained a narrower sub-segmentation within online advertising by distinguishing search advertising from non-search advertising. In particular, the FCA concluded that: (1) online search advertising is based on users' explicit requests on search engines that precisely indicate users' intentions and facilitate immediate online purchases; (2) in terms of format, online search advertising is mainly text-based, and advertising creation is less important and cheaper compared to other forms of online advertising; and (3) the structure of the online search advertising market gave rise to significant supply-side specificities given that there are fewer suppliers and substantial barriers to entry and expansion (e.g., suppliers first need to develop a general search engine and significantly invest in technologies dedicated to the provision of search advertising).
As regards the geographic dimension of the market, the FCA typically determines the area where the conditions of competition are homogeneous. The FCA also analyses, for example, the applicable legal framework, transportation costs, logistical constraints and the way tenders are structured to delineate geographic markets. In Termite Traps,24 the insular nature of the department of Réunion Island led the FCA to limit the relevant market to that department alone. In Gibmedia,25 the FCA found that the online search advertising market had a national dimension based on: (1) the linguistic barriers (as online search ads are mainly text-based and, therefore, displayed in different languages); (2) Google's commercial organisation, which has dedicated teams in charge of advertisers depending on their geographic location; and (3) the different legal frameworks applicable in the various countries.
The FCA also uses the 'small but significant and non-transitory increase in price' test approach to define geographic markets (i.e., the relevant geographic market is defined as the area in which a hypothetical monopolist can use its market power, for example, to raise prices profitably without being constrained by other players located in other areas).26
ii Single dominance
Dominance is achieved when a company can determine its pricing policy in the relevant market independently from its competitors and customers.27 The FCA typically considers that market shares above 50 per cent are a strong indicator of market power.
To establish single dominance, the FCA also examines the following criteria in addition to market shares:
- the countervailing market power of competitors;
- the intensity of competition on the market;
- the existence of potential new entrants; and
- the specific advantages of the leading firm (e.g., brands, organisation, better products or services).
In Pet Food,28 Royal Canin held a market share limited to 40 per cent. It was still considered to be a dominant player, because: (1) the second and third-largest competitors respectively held a 12 and 7 per cent market share; (2) Royal Canin had a very good brand image bolstered by high advertising expenses and regular contact with prescribers; and (3) the relevant market was one that presented high barriers to entry.
In Gibmedia,29 the FCA relied on Google's very high – and stable – market share on a restrictively defined online search advertising market (around 90 per cent according to the FCA) to find that Google has an 'extraordinary' dominant position on this market. The FCA also emphasised the importance of barriers to entry given that: (1) new entrants need to undertake significant investments to develop, maintain and improve a general search engine and an advertising platform; and (2) there are significant network effects between online search advertising services and a general search engine. The FCA concluded that Google benefits from a competitive advantage that is hard to match for potential new entrants.
iii Collective dominance
Collective dominance may result from structural links between undertakings, whether capitalistic or contractual, from the market structure, or from both. In the absence of structural links, the FCA applies the cumulative Airtours criteria (i.e., oligopolistic market, significant market transparency, possibility to engage in retaliation and absence of countervailing power from the fringe players).30
In Saint-Pierre-et-Miquelon,31 the FCA imposed a total fine of €381,400 on companies active in the aggregates' market in the archipelago of Saint-Pierre and Miquelon for entering into an anticompetitive agreement and abusing their collective dominant position. In particular, the FCA found that the four undertakings held a collective dominant position as:
- they together held a market share in excess of 80 per cent in the relevant markets;
- they had structural links through the operation of a common quarry and had adopted a common strategy;
- deviation would be unlikely given their historical links;
- entry barriers were high; and
- there were no alternative competitors.32
Although collective dominance cases are rare,33 the FCA's decisional practice shows that it tends to resort to collective dominance when it lacks evidence to support a claim of explicit collusion.
In AMD Treatment,34 the FCA considered that three pharmaceutical companies – Novartis, Roche and Genentech – had abused their collective dominant position in an effort to promote the sale of Lucentis, a drug used to treat AMD, to the detriment of Avastin, a much cheaper drug initially developed to treat certain types of cancer but that could also be used to treat AMD. Both drugs had been developed by US biotechnology company Genentech. However, in terms of distribution outside the United States, Avastin was licensed to Genentech's parent company Roche35 and was granted an EU market authorisation for cancer treatment in 2005, whereas Lucentis, which had been specifically designed to treat AMD, was licensed to Novartis (which, in turn, held 33.33 per cent of Roche's voting rights). When doctors found that Avastin had positive effects for patients with AMD, they started prescribing it as a 30-times cheaper alternative to Lucentis. Roche, however, never applied for an authorisation to market Avastin for AMD treatment and the drug was thus prescribed off-label by doctors, on the basis of an individual assessment of patients. From 2010 to 2013, a scientific debate arose on the respective safety and efficacy of Avastin and Lucentis for AMD treatment. As a result, the French health authorities sought to issue a temporary recommendation for the use of Avastin in the treatment for AMD. This triggered efforts by the three pharmaceutical companies to protect the higher-priced sales of Lucentis. Unlike its Italian counterpart in similar proceedings in 2014,36 the FCA did not rely on Article 101(1) of the TFEU and instead alleged that Novartis, Roche and Genentech engaged in abuse of collective dominance practices infringing Article 102 of the TFEU and Article L420-2 of the French Commercial Code. The FCA found that the three companies, together, held a collective dominant position on the market for the treatment of AMD. The FCA considered that Novartis, Roche and Genentech constituted a single entity because of Novartis' participation in Roche, Roche's shareholding in Genentech, and the contractual links between Genentech and Roche, and Genentech and Novartis, respectively, through the licensing agreements. The FCA considered that this single entity held a dominant position on the market for the treatment of AMD where the parties' combined market share exceeded 90 per cent, until Bayer's entry in 2013. The structural and contractual links between the three drug-makers enabled them to adopt a common course of action in the relevant market and this led the FCA to impose a €385 million fine on Novartis and a joint fine of €59 million on Roche and Genentech.
However, in Molotov, the FCA rejected the allegations of collective dominant position against broadcasters TF1 and M6 given the absence of capitalistic or contractual links between the parties at the time of the practices.37
iv Economic dependence
An abuse of economic dependence is a specific infringement under French competition law, which has no equivalent in EU competition law. Pursuant to Article L420-2(2) of the Commercial Code, the exploitative abuse of economic dependence is prohibited when the FCA proves that three cumulative conditions are met: (1) a position of economic dependence towards a commercial partner exists; (2) the commercial partner abused this situation, through anticompetitive practices; and (3) these practices are capable of affecting the functioning or structure of competition. This provision was originally drafted to protect suppliers from large retail chains (i.e., supermarkets), but is rarely applied in practice due to the high standard of proof that needs to be met, in particular to prove a position of 'economic dependence'.
According to established case law, economic dependence arises when a company is forced into a commercial relationship with another company because it cannot purchase substitutable products under similar terms and conditions, or sell its products to other customers. Both the FCA and the Paris Court of Appeal have established strict criteria for proving a position of economic dependence and examine the following four cumulative conditions:
- the commercial partner's brand notoriety;
- the commercial partner's market share;
- the commercial partner's share in the turnover of the dependent company; and
- the possibility for the dependent company to find an alternative commercial partner.38
Until recently, the FCA had only imposed a fine for abuse of economic dependence in three cases, more than 15 years ago.39 However, the concept was revived in early 2020 in the Apple case.40 The FCA sanctioned Apple for abusing the situation of economic dependence of its APRs (i.e., distributors that exclusively sell Apple products) from November 2009 to April 2013 for the distribution of Apple products (excluding iPhones). The FCA found that the APRs were under a contractual obligation to achieve 70 per cent of their turnover through sales of Apple products. Moreover, the contracts between Apple and the APRs comprised a non-compete clause prohibiting APRs to open any shop specialising in the sale of a competing brand, in Europe, for the duration of the contract and for the following six months. Failing to comply with Apple's terms meant APRs would risk losing their premium reseller status and this would further result in a total loss of value of the APRs' business, for which it would be impossible to recover costs on other investments. The abusive practices unduly restricted the APRs' commercial freedom and included delays and cancellations of deliveries, discriminatory treatment, unstable remuneration (discounts and outstanding credit lines), and a discretionary implementation of Apple's commercial terms. APRs were thus not in a position to compete with other resellers in Apple's internal network, such as Apple stores. The abuse of the situation of economic dependence of its APRs, combined with the fact that Apple entered into vertical anticompetitive agreements with its distributors, led the FCA to issue its highest fine ever on an individual company (€1.1 billion).
Article L420-2 of the Commercial Code specifically mentions a number of abuses, including refusal to supply or deal, tying, or discriminatory practices. However, the list is not exhaustive.
The FCA can find that a company's behaviour is abusive by object or by effect. In past cases, the FCA found that abusive conduct could be established even in the absence of an actual effect on the market. Attempts to abuse a dominant position may, thus, in certain cases also be challenged. In SNCM,41 the court found that a ferry line operator between Corsica and Marseilles abused its dominant position by submitting a bundled and indivisible offer (i.e., island-to-continent) to the call for tenders launched by the Corsican Transport Office, while its competitors submitted point-to-point (i.e., harbour-to-harbour) bids as required by the request for proposals. By doing so, SNCM did not allow the tendering authority to compare bids on a point-to-point basis, and allocate the contract between several ferry operators. Although the bidding procedure was ultimately declared void by the administrative courts and the practice thereby not having any effect, the FCA fined SNCM €300,000 for its attempted abuse of a dominant position. The FCA also considers that it does not need to establish anticompetitive effects for exploitative abuses, to the extent that the objective is to exploit customers, not to exclude competitors.42
ii Exclusionary abuses
Predatory pricing is a pricing strategy whereby a dominant firm offers below-cost prices, thereby incurring losses or foregoing profits in the short term to eliminate actual or potential competition. The FCA relies on the EU Akzo test and considers that the following two situations create a presumption of predatory pricing:
- when the dominant company's prices are lower than the average variable costs (unless a company can convincingly explain that its behaviour did not result from a predatory strategy aimed at eliminating competitors); or
- when the company's prices are between average variable costs and average total costs, and there is clear and convincing evidence that its behaviour is part of a predatory strategy aimed at eliminating competitors.43
French authorities use a slightly stricter, economics-based, test compared to the European Commission's approach. In particular, the FCA has to show that there is a realistic possibility of the dominant player recouping its losses. This may explain why, to date, there has been no successful precedent of predatory pricing where the FCA imposed a fine.44 While predatory pricing concerns were raised by the FCA in several cases, the FCA's investigations were ultimately closed, or generally ended with injunctions or commitments taken by the dominant undertaking to remedy those concerns.45
In SNCF,46 the FCA held that the French rail operator pursued price-based exclusionary practices for its freight services activity by full-trainload because SNCF's prices, although higher than direct average variable costs, were lower than the costs that would be avoided over a three-year period if SNCF terminated its freight services activity by full trainload. Although SNCF's pricing policy was not considered predatory, as the losses incurred by SNCF were sustainable and predated the opening-up of the sector to competition, the FCA nevertheless considered that it was abusive. The Paris Court of Appeal, however, overturned this part of the decision, considering that charging prices superior to average variable costs but inferior to average total costs could only be considered abusive based on evidence that the dominant firm had made specific plans to exclude competitors from the market.47 The Court found that the FCA had not sufficiently established the existence of an exclusionary strategy. However, in a second judgment after the case was referred back by the Supreme Court,48 the Paris Court of Appeal ultimately confirmed SNCF's abusive pricing policy. The Court held in particular that the FCA had applied a relevant cost test and had established the existence of an eviction strategy.49
In Bottin Cartographes,50 following an opinion by the FCA, the Paris Court of Appeal dismissed a predatory pricing claim against Google. Bottin Cartographes, a competitor of Google in online mapping services, claimed that offering mapping services free of charge constituted an abusive predatory strategy. However, the FCA,51 as confirmed by the Court, reaffirmed that for multi-product companies, the predation test to be conducted is a modified Akzo test, where only the incremental cost attributable to a given product should be taken into account (to the exclusion of costs that are common to other products). In practice, average variable costs are to be replaced by average incremental costs, and average total costs by long-run average incremental costs. The FCA found that the relevant costs were those specifically associated with the allegedly abusive activity to the exclusion of common costs supported by Google in its capacity as a multi-service firm (in particular, the costs associated with the acquisition of the underlying maps were not relevant because Google would bear them in any event for its search engine activity). Conversely, the FCA and later the Court confirmed that where a product is offered in different versions (one basic, free version, and one premium, paid-for version), the revenues to be taken into account are those associated with all versions of the product. On this basis, the FCA and the Court of Appeal found that Google's revenues exceeded the total relevant costs, and even if Google's revenues could have been exceptionally lower than the corresponding average total costs, there was no evidence of a predatory strategy. On this last point, the FCA and the Court emphasised that it would have been impossible for Google to recoup the potential losses, and as such no predatory strategy could be found.
In Vendée Sea Crossings,52 the FCA ended a 17-year predatory pricing saga involving a public provider of sea transport services, the RDPEV. The RDPEV is a state-owned entity operating maritime transport services between continental France and the Île d'Yeu in the Vendée region (western France) to the benefit of the local municipality. The service is provided as part of RDPEV's public service mission, except during the peak summer season where commercial transport services are offered in competition with private operators. In 2004, the FCA rejected a complaint from a competitor that claimed that the RDPEV abused its dominant position by offering commercial transport services at predatory prices.53 However, the FCA's decision was ultimately annulled by the Paris Court of Appeal in 2012,54 notably on the ground that the FCA did not correctly define the relevant costs to determine the existence of predatory prices (i.e., whether the common costs incurred for RDPEV's public service mission should be taken into account). In 2018, following a new investigation, the FCA again rejected the predatory pricing allegations. The FCA recalled that when implementing the Akzo test and, except for exceptional circumstances, the costs to be taken into account are, in principle, those that are actually incurred by the dominant undertaking itself, not those incurred by potential or actual competitors of the dominant undertaking.55 The FCA clearly identified incremental costs incurred by the RDPEV and compared the RDPEV's profits resulting from its commercial activity during the peak summer season with its average incremental costs. The latter are the costs that could have been avoided had the transporter not operated any competitive activity during the peak summer season (including salaries, fuel and other costs related to marketing services, but excluding the owner's insurance premiums and the major repairs). The FCA concluded that the transporter's profits resulting from its commercial activity during the peak summer season actually exceeded its incremental costs. In any event, the FCA noted that RDPEV's pricing practice did not lead to any foreclosure effect on competitors. Indeed, one of its competitors was still active and had actually opened a new transport line since 2001, while the two other competitors exited the market almost 15 years after the practices at stake.
In early 2021, in Plüm Energie, the FCA dismissed a request for interim measures from the eponymous electricity supplier regarding alleged predatory pricing practices implemented by incumbent electricity supplier EDF on the market for the supply of electricity to small non-residential customers. In its request, Plüm Energie alleged that, in the context of the end of the regulated electricity tariffs for non-residential consumption sites in France, EDF offered tariffs lower than its costs when bidding for the calls for tenders issued by local and regional authorities. The alleged predatory pricing strategy had foreclosure effects for alternative suppliers at a particularly sensitive time for the development of competition in the electricity sector in France. The FCA, however, considered that the conditions for granting interim measures were not met (see below) and thereby rejected the urgent request but agreed to investigate the merits of the case.56
Leveraging practices consist of a dominant firm taking advantage of its superior market position in a 'dominated' market to expand its position in another related market.
In PMU I,57 the FCA expressed concerns that the French legal monopolist for offline horse race betting leveraged its position to exclude competitors from the competitive market for online horse race betting. In particular, the FCA was concerned that by pooling together its online and offline bets, PMU could attract more bettors, discourage potential new entrants and, in time, drive competitors out of the market, since a greater pool of bets allows for more complex and diversified bets. The winnings on successful bets can also be significantly higher because there would be a greater pool of debts. The FCA accepted commitments from PMU to stop pooling its online and offline bets, and that online and offline activities would be kept separate. Although this could be interpreted as coming close to 'an efficiency offence', because horse racing bettors precisely look for the highest possible winnings (as in any lottery), the FCA justified its preliminary findings by stating that its decision was consistent with the public policy objective of limiting the risk of addiction to online betting. In early 2020, in PMU II,58 the FCA fined PMU €900,000 for breaching its commitments to separate its online and offline betting services regarding international horse races.
In Passenger Transport,59 the FCA accepted the commitments offered by SNCF to prevent its subsidiary Keolis from leveraging SNCF's monopoly in the railway passenger transport market into the competitive market for the urban transport of passengers (i.e., bus, metro, tram). More specifically, the FCA was concerned that Keolis could rely on its parent company's railway expertise to submit bids that cannot be replicated by competitors for the supply of advice and technical assistance to urban transport operators. To alleviate the FCA's concerns, SNCF committed, in particular, to only allow its subsidiaries that are fully independent from its railway passenger transport activities to respond to calls for tender regarding technical assistance to urban transport operators.
In Engie,60 the FCA found that Engie abused its dominant position by leveraging its position as the incumbent gas operator to obtain more contracts in the competitive gas and electricity markets. In particular, the FCA found that Engie used (1) its historical customer database for regulated tariffs for gas to convert customers to market-based contracts for gas and electricity; (2) the business infrastructure and resources developed for its regulated tariff activity to offer new market-based contracts and win former customers back; and (3) misleading sales arguments including allegations that Engie could guarantee a better security of gas supply than its competitors. The FCA considered that these practices were particularly harmful to competition as they were implemented at a time when the market was opening up to competition. Engie did not challenge the objections and settled the case against a €100 million fine.
Margin squeeze is a strategy whereby the dominant vertically integrated firm applies excessive prices on upstream products or services that make downstream rivals' activities unprofitable. French courts consider that margin squeezes restrict competition only if a potentially as-efficient competitor would be unable to enter the downstream market without incurring losses. Such restriction of competition may be presumed only when the products or services supplied to its competitors by the dominant firm are indispensable to enable them to compete on the downstream market.61
In Eiffel Tower,62 the FCA found that TDF had implemented a margin-squeeze strategy in the market for the renewal of the national occupancy contract for audiovisual and radio broadcast from the Eiffel Tower site. Among other practices, the FCA found that the offers made by TDF to alternative operators for hosting services (which were indispensable to compete on the downstream market for the broadcasting of radio programmes from the Eiffel Tower) constituted a margin squeeze that did not allow alternative operators as efficient as TDF to submit competitive offers for the operation of the Eiffel Tower facilities. The FCA imposed a fine of €660,000 on TDF on these grounds.
Exclusive dealings entered into by a dominant firm do not constitute a per se abuse under French law, provided that the dominant firm's behaviour does not result in foreclosing competitors. To assess whether exclusivity clauses may restrict competition, the FCA examines the clauses' scope and duration, the existence of a technical justification and the economic consideration granted to the customer.63
In Mobile Telephony Equipment,64 the FCA was concerned about the duration (20 years) and the restrictive early termination terms of the agreements between mobile operators and the incumbent infrastructure operator TDF for the hosting of their antennae (in particular, early termination was possible only for very few sites each year), which created de facto exclusivity. To address these concerns, TDF offered commitments designed to allow mobile operators to switch to alternative hosts more easily. TDF committed in particular to limit the duration of new hosting agreements to 10 years, cap the penalties in the event of early termination, and increase the number of sites (or quotas) for which early termination was possible.
In Sugar Beet,65 Saint-Louis Sucre claimed that Tereos, a cooperative and the largest sugar producer in the French market (and owner of the Beghin Say brand), abused its dominant position by entering into long-term exclusive contracts with sugar beet growers in the Picardy region, which represents about 40 per cent of French sugar beet production. The FCA found that the contractual terms offered by Tereos raised a number of concerns, especially in light of the opening up to competition of the French sugar procurement market following the abolition of sugar production quotas in October 2017:
- Tereos could potentially lock in all its growers until 2022 as it had introduced a five-year exclusivity commitment for producers willing to increase their beet production by 20 per cent, in addition to the 10-year commitment initially undertaken by Tereos' growers to cover usual beet tonnage;
- the articles of association of Tereos' cooperative did not expressly indicate that cooperative partners could supply part of their beet production to other sugar groups, such as Saint-Louis Sucre; and
- Tereos had required cooperative partners that wished to leave the cooperative to give a 12-month notice period (instead of three months), making it even more difficult to switch to Tereos' competitors.
In light of these concerns, Tereos offered a number of commitments that led the FCA to close its investigation.
Under French law, loyalty rebates granted by a dominant firm may be considered abusive when a discount tends to remove or restrict a buyer's freedom to choose its sources of supply absent a legitimate economic quid pro quo.66 The FCA considers that forward-looking quantitative rebates (as opposed to rebates based on historical sales) conditional upon individual orders, volumes or turnover as generally valid, because they tend to reflect efficiency gains and economies of scale. Other forms of loyalty rebates may be considered abusive.
In DTT Broadcasting,67 the FCA found that TDF had abused its dominant position by granting loyalty rebates to channel editors that hired TDF for a substantial share of their broadcasting sites. The FCA found that TDF generally granted rebates only if channel editors assigned TDF at least 70 per cent of their sites, which prevented other competitors from developing their activity, even though they also offered rebates to channel editors.
In La Poste,68 the FCA expressed concerns in respect of La Poste's loyalty rebates policy for parcel delivery services offered to online sales sites, following a complaint lodged by parcel delivery firm Kiala and the French Minister of the Economy in 2010. The FCA noted that La Poste offered retroactive rebates on (1) home parcel deliveries and out-of-home parcel deliveries (i.e., deliveries to a parcel pick-up point or the post office) based on the cumulated number of home and out-of-home deliveries; and (2) home parcel deliveries increasing with the volume of deliveries entrusted to La Poste. Given La Poste's market shares on the home delivery segment (exceeding 80 per cent), the FCA found that such rebates could encourage customers to entrust their out-of-home and home deliveries to La Poste without its competitors being able to compete with these discounts. It noted that since a large portion of the customers have no choice but to use La Poste for at least part of their home parcel deliveries, they would have strong incentives to meet the requirements to benefit from La Poste's rebates. The FCA ultimately accepted the commitments offered by La Poste and closed the investigation (see below).
Tying and bundling
Tying and bundling consist of tying or bundling two distinct products that typically belong to two different markets, either by forcing consumers to buy the tied products together or by providing them an incentive to buy the products together. The FCA considers that tying by a dominant firm may be abusive if the following two conditions are met: the tying and tied products are distinct products; and the tying practice is likely to lead to anticompetitive foreclosure.69
In Nespresso,70 the FCA accepted commitments addressing its concerns that Nespresso needlessly modified its coffee machines to discourage consumers from buying its competitors' coffee capsules. Nespresso also allegedly falsely implied that only its capsules were compatible with its own machines so as to favour tied sales of its own capsules with its Nespresso machines and exclude its competitors' capsules. Nespresso committed to inform competing manufacturers of Nespresso-compatible coffee capsules of future technical changes in Nespresso machines so that they would have time to adapt their own production and their communication towards consumers. Nespresso also committed to stop commenting on its competitors' capsules.
In Schneider Electric,71 the FCA was concerned that Schneider Electric abused its dominant position by refusing to sell a significant number of spare parts necessary for the in-depth maintenance of its electric equipment to third-party maintenance providers unless they agreed to have Schneider Electric's own employees perform the associated maintenance services. Schneider Electric argued before the FCA that this restriction aimed at ensuring the safety of property and people as well as at protecting its business model, in particular its brand image, know-how and the expertise of its technicians. However, the FCA found that Schneider Electric's policy was not necessary to achieve these objectives. It found that it was likely to constitute an unlawful tied sale by potentially preventing other maintenance providers from carrying out a full range of maintenance services on Schneider Electric's high voltage and low voltage equipment, which respectively accounted for around 70 per cent and 60 per cent of the relevant equipment sales in France. The FCA also found that it was likely to deprive customers of services that might be cheaper and of higher quality. Schneider Electric offered commitments to address the FCA's concerns.
In IT Maintenance,72 the FCA rejected a third-party maintainer's claim that IBM, HPE and Oracle each abused their individual dominant position on the market for the sale of firmware updates by implementing a global strategy to exclude third-party maintainers from the downstream markets for the maintenance of server and storage systems by restricting access to firmware updates that are necessary for maintenance services. The FCA found that the complainant, Econocom, had failed to provide evidence of any abuse of market power for any of the possible commercial relationships corresponding to the sale of maintenance services. First, in all cases where the maintenance contracts are purchased alongside the server or storage system, the FCA found that the secondary maintenance market could not be distinguished from the primary hardware market and that any risk of abuse of dominance regarding maintenance had therefore to be excluded. Second, where customers purchase maintenance solutions for mature systems, the FCA noted that the access to firmware updates is rarely required – or not required at all – since the hardware and software are stabilised and manufacturers offer long-term maintenance contracts that enable customers to cover the entire lifetime of the server or storage system from the moment of the purchase of the system. Third, where customers issue tender offers for multi-brand maintenance contracts, the FCA considered that server manufacturers effectively give access to their firmware updates – including to third-party maintainers, such as the complainant – and do not prevent competitors from bidding. Finally, the FCA acknowledged that manufacturers were under no obligation to supply firmware updates for free, and that it was legitimate for suppliers to monetise access to firmware updates given that these updates necessitate development costs and contain software innovation.
Refusal to deal
The concept of refusal to deal is regularly used by the FCA. It covers a broad range of practices, such as the refusal to grant access to an essential facility or network, the refusal to supply products to existing or new customers, and the refusal to license intellectual property rights. The FCA's test is similar to the test adopted by the European Commission. Refusal to grant access to an essential facility is abusive if the following five conditions are met:
- the facility belongs to a dominant firm;
- access to the facility is necessary to compete in a related market;
- competitors cannot duplicate the facility at reasonable costs;
- the dominant firm unduly refuses access to the facility (or imposes unduly restrictive conditions); and
- access to the facility is possible.73
The same principles apply mutatis mutandis for refusals to supply a product as well as refusals to provide a service. For example, in the area of intellectual property rights, French courts consider that copyrighted software may constitute an essential facility only if it is proved that the software is indispensable to operate on a market, and a competitor could not develop an alternative software under economically reasonable conditions (even if such economic conditions were less favourable than those under which the dominant undertaking operates).74 In practice, the following facilities have been considered essential under French law: transport facilities,75 the electricity network,76 the telephone network77 and certain databases.78
In SNCF,79 the FCA and the Paris Court of Appeal considered that SNCF abused its dominant position by restricting access to the railway infrastructure. More specifically, the abuse consisted of:
- delaying the release of information concerning access to freight yards, thereby preventing its competitors from accessing rail capacities essential to their business activity;
- retaining exclusive use of certain railway cars that are used for large tonnage transportation and constitute an essential part of the infrastructure; and
- pursuing a train path overbooking policy that prevented its rivals from participating in certain calls for tenders or honouring certain contracts.
In Cegedim,80 the FCA imposed a €5.7 million fine on a company active in both the provision of healthcare databases and customer relation management (CRM) software for refusing access to its database of medical information to pharmaceutical laboratories that used the CRM software of one of its competitors, Euris. The FCA considered that Cegedim's database was not an essential facility because there were alternative, albeit inferior, rival databases. However, it found that the refusal to give access to the database still amounted to an abuse of dominance, since Cegedim sought to foreclose Euris from the CRM market by discriminating against customers using Euris' CRM software (the FCA pointed out that the practice had caused Euris to lose 70 per cent of its customers between 2008 and 2012). In 2015, the Paris Court of Appeal upheld the FCA's decision and considered, in particular, that the practices implemented by Cegedim had unjustifiably disadvantaged Euris in terms of costs and reputation.81 The French Supreme Court validated the Court's reasoning.82
In Orange,83 the FCA dismissed a refusal to supply claim as it found that Orange's fibre-to-the-home (FTTH) infrastructure does not constitute an essential facility, in particular since it is not indispensable and can be replicated. The FCA first considered that – given the existence of various national alternatives – access to Orange's FTTH offer does not appear to be strictly necessary (or indispensable) to compete in the relevant market. Second, the FCA noted that it appears to be possible to duplicate Orange's FTTH infrastructure because several alternative optical fibre networks are currently being deployed in France. The FCA, therefore, rejected the refusal to supply claim.
Termination of a contractual relationship
The termination of on-going commercial relationships may also be sanctioned on the basis of Article L420-2 of the Commercial Code. This can be the case in particular if (1) the conditions of termination are abrupt, and (2) the termination has an anticompetitive object or (actual or potential) anticompetitive effects.84
In Satellite TV Decoders,85 following a complaint of a third-party satellite decoder manufacturer, the FCA expressed concerns about the decision of French pay-TV operator Groupe Canal Plus (GCP) to terminate its Canal Ready partnership with third-party decoder manufacturers. Until July 2014, to receive GCP linear programmes by satellite, consumers had to use one of the decoders rented out by GCP or insert a card in a decoder. This decoder could be purchased from an authorised third-party decoder manufacturer that had concluded a Canal Ready partnership agreement with GCP (the card-only system). However, in July 2014, GCP decided to put an end to its card-only system and to terminate its Canal Ready partnership agreements because of content piracy affecting third-party decoders. While the FCA noted that a company, even when it holds a dominant position, is free to modify its strategic model or its business plan as long as these changes do not have an anticompetitive object and can be justified by legitimate reasons, it also clearly stated that a rapid and sudden change can, in some circumstances, amount to an abuse of dominance. The abusive nature of the conduct depends on the justification brought forward for the decision to change model, the conditions in which it takes place, and the effects this decision has on competitors or third parties. According to the FCA's preliminary assessment, GCP's plan necessarily led to the exclusion of third-party decoder manufacturers from the market and could deprive actual and potential consumers from having the option to purchase decoders that were potentially cheaper or offered different features. While taking into account GCP's piracy concerns, the FCA therefore held that the termination of the card-only system had to provide for appropriate measures to remedy the FCA's concerns. This led GCP to offer commitments. GCP agreed to allow third-party decoder manufacturers to manufacture and distribute decoders compatible with GCP satellite programmes, provided these decoders include a software access module called 'myCanal' (that users can download) designed, monitored and updated directly by GCP.
Under French law, disparagement consists of publicly discrediting an identified competitor or its identified products or services. The FCA considers that disparagement is distinct from criticism as it originates from an economic player seeking to benefit from an unjustified competitive advantage by discrediting its competitor or products, and may constitute an abuse of dominance (when disparagement originates from a dominant player).
In Sanofi86 and Schering-Plough,87 the FCA fined two pharmaceutical companies for disparagement that consisted of widely publicising differences between their originator drug (or the generic manufactured by the producer of the originator drug) and other generic drugs at the time of the entry of the generic drugs into the market. Irrespective of whether such differences were verified or not, the companies could not prove that they had therapeutic consequences. Although neither Sanofi nor Schering-Plough had explicitly presented generic drugs as being inferior, but only pointed at factual differences, the very fact of shedding doubts without scientific supporting evidence was found to be abusive by the FCA. Sanofi was fined €40.6 million and Schering-Plough was fined €15.3 million.
In Janssen-Cilag,88 the Paris Court of Appeal confirmed that Janssen-Cilag had abused its dominant position by hindering the development of the generic versions of its Durogesic drug in France but reduced the amount of the fine from €25 million to €21 million on the ground that the damage to the economy was lower than that found by the FCA. The FCA had found that Janssen-Cilag submitted legally unfounded arguments to the French Agency for the Safety of Health Products (AFSSAPS)89 aimed at casting doubts on the innocuousness and effectiveness of the generic drug. This had led the French authority to temporarily refuse to recognise the generic status of Ratiopharm's fentanyl drug. The AFSSAPS ultimately granted generic status to Ratiopharm's drug after a delay of more than a year, but added a warning to this authorisation, recommending careful medical supervision of some patients switching from one fentanyl drug to another. In addition, the FCA had found that once the authorisation was granted, Janssen-Cilag had started a massive disparagement campaign of the generic drugs among health professionals, using different media and channels, with the aim of discrediting the generic drugs' reputation by highlighting quantitative, qualitative and size differences from the Durogesic patch. The FCA had also considered that Janssen-Cilag in its communication distorted the content of the warning issued by the AFSSAPS by providing an inaccurate and incomplete presentation of the risks associated with substitution. The FCA had concluded that Janssen-Cilag's practices constituted a single and continuous infringement that had significant foreclosure effects on competitors by delaying the arrival of generics, and then contributing to their low penetration rate, on a market already marked by the reluctance of healthcare professionals to prescribe generics. The FCA's reasoning on the disparagement practices was upheld by the Paris Court of Appeal. An appeal is now pending before the French Supreme Court.
In AMD Treatment,90 the FCA found that Novartis, Roche and Genentech had disparaged the Avastin drug in the treatment of AMD to preserve the Lucentis drug from competition (see above). More specifically, it found that (1) Novartis had disparaged the Avastin drug before patient associations, health professionals and the general public; and (2) Novartis, Roche and Genentech had implemented tactics aimed at delaying the public authorities' initiative to regulate the use of Avastin in the treatment of AMD. First, the FCA fined the pharmaceutical company Novartis €253.9 million for having disseminated selective and biased data comparing Avastin and Lucentis, unduly insisting on the risks relating to the use of Avastin for AMD treatment. The FCA found that these practices reduced the off-label use of Avastin in ophthalmology, which in turn unduly preserved Novartis' quasi-monopolistic position on the market and helped sustain high prices for Lucentis. Second, Novartis was fined €131.2 million, while Roche and Genentech were jointly ordered to pay a €59.7 million fine, for having intervened in an abusive way before the French public authorities. The FCA found that Roche had unduly emphasised the side effects of Avastin's use in ophthalmology in its communications with the French health authorities. As for Novartis, the FCA found that it had spread a worrying discourse among public authorities based on incomplete studies presented out of context. Although Genentech did not directly intervene in Novartis' and Roche's interactions with the French authorities, the FCA considered that it had helped the two other companies coordinate their message so that it remained consistent and based on the same scientific data. An appeal is currently pending before the Paris Court of Appeal.
Most-favoured nation clauses
In http://www.Booking.com I,91 the FCA accepted commitments addressing its preliminary concerns that the most-favoured nation (MFN) clauses imposed by http://www.Booking.com could have exclusionary effects. MFN clauses prevented hotels from offering to rival reservation platforms or other distribution channels (including through their own sales channels) lower prices or better commercial conditions (i.e., availability, services) than to http://www.Booking.com. In particular, the FCA considered that these clauses could prevent smaller platforms and new entrants from gaining market shares by offering lower prices or better services to customers, including by offering lower commission rates to hotels. A few months later, Article L311-5-1 of the French Tourism Code was modified to guarantee the freedom of hospitality operators to offer discounts and price advantages by prohibiting MFN clauses.92 In parallel, French courts also took issue with MFN clauses and fined Expedia €1 million for creating a significant imbalance in its relationship with hotel partners93 as well as ordered Expedia and http://www.Booking.com to remove price and availability MFN clauses from their contracts with hotels.94
In 2019, in Online hotel booking,95 the FCA issued a decision regarding the claims made by hotels against Expedia and HRS, which, unlike http://www.Booking.com, had refused to offer commitments. The FCA found that the MFN clauses at issue had already been dealt with by other national competition authorities, namely in Sweden, Italy, Greece, Poland and the United Kingdom. In addition, the FCA noted that the European online hotel booking sector had evolved since the beginning of the investigation, as shown by the increased price differentiation in the wake of the http://www.Booking.com I commitments and the statutory prohibition of price MFN clauses in France. The FCA also pointed to the smaller presence in France of Expedia and HRS compared to http://www.Booking.com. As a result, the FCA decided to reject the initial complaint and close its investigation.
Other exclusionary tactics
The FCA may intervene under Article L420-2 of the Commercial Code where a dominant company's allegedly abusive conduct is likely to lead to anticompetitive foreclosure.
In Pétanque Balls,96 the FCA imposed a fine of €320,000 on Obut for imposing resale prices on some of its distributors. The FCA considered that Obut held a dominant position in the market for the production of pétanque balls for use in competitions and relied on its dominant position to impose resale prices to its distributors active in the downstream market for the distribution of pétanque balls in which Obut was also active. The FCA also found that Obut's sales forces monitored compliance with the suggested list prices, and threatened distributors with delayed deliveries, blocked orders and delisting in cases of deviation. The FCA concluded that Obut's pricing policy aimed at ensuring that its distributors could not compete on price with its own retail outlets. In its decision, the FCA noted that such practices are also prohibited under Article L420-1 of the Commercial Code, but decided to rely on Article L420-2 of the Commercial Code. Obut agreed not to challenge the facts before the FCA and settled the case. Interestingly, in early 2020, in Itas/TDF,97 the FCA dismissed a complaint by French terrestrial digital television broadcaster towerCast, which alleged that its competitor TDF's acquisition of Itas (a major French industrial player in the telecoms sector in France and abroad) constituted an abuse of dominance on the wholesale markets for digital terrestrial television broadcasting services. While the concentration did not meet the French or the European merger control thresholds, towerCast argued before the FCA that the transaction would constitute an abuse of dominance by significantly strengthening TDF's position. Indeed, post-transaction, TDF and towerCast would remain the only two competitors on the market. TowerCast's complaint relied on the 1973 Continental Can ruling whereby the Court of Justice held that a company may abuse its dominant position by acquiring one of its competitors, in particular when the acquisition strengthens the acquiring company's dominant position 'in such a way that the degree of dominance reached substantially fetters competition, i.e. that only undertakings remain in the market whose behaviour depends on the dominant one'.98 However, the FCA recalled that the Continental Can ruling was delivered prior to the adoption of any European merger control regulation and concluded on this basis that the principle laid down in this ruling could no longer apply. The FCA found that under both EU and French law a concentration could not be considered, in itself, as an abuse of a dominant position.
iii Exploitative abuses
Exploitative abuses consist of a dominant firm imposing 'unfair' conditions on its trading partners. The imposition of excessively high prices by a dominant undertaking might infringe Article L420-2 of the Commercial Code. Prices are considered excessive where they have no reasonable relation to the economic value of the product or service supplied; in particular, where the difference between the costs actually incurred and the price actually charged is excessive and where the price imposed is either unfair in itself or when compared with competing products.99 Imposing non-price unfair terms can also be considered abusive under certain circumstances.
In 2009, the FCA fined Orange €27.6 million in Telecommunication in Overseas Départements.100 In this case, the FCA investigated the rates applied by Orange for connection services between Réunion Island and the mainland, and found that 'there existed a clear disproportion between these rates and the value of the services', which resulted in the imposition of excessive prices on consumers (residential and professional), and hindered the development of the high-speed market on Réunion Island, and the development of Orange's competitors.
In Sanicorse,101 the Paris Court of Appeal annulled the FCA decision of September 2018 insofar as it had found that Sanicorse abused its dominant position in the market for the treatment of infectious medical waste in Corsica by imposing excessively high price increases.102 In its decision, the FCA had concluded that Sanicorse's price increases were imposed on Corsican healthcare establishments for more than four years without any prior notice. These prices were excessive because they could not be justified by Sanicorse's increased costs and additional investments. The FCA had considered that Sanicorse's practices were particularly serious as they had the – potential or actual – effects of: (1) exploiting healthcare establishments that are legally obliged to manage infectious medical waste under strict conditions and that for some of them experienced financial difficulties; and (2) preventing the development of competitive alternatives. In its ruling, the Paris Court of Appeal found that an exploitative abusive can be established by the FCA when two conditions are met: (1) the dominant firm uses its dominant position to obtain trading advantages; and (2) these advantages are objectively unfair in light of all the relevant circumstances of the case. It also found that prices can be considered unfair when they have no reasonable relation to the economic value of the product or service supplied. Concerning price increases in particular, the Court noted that they may be considered unfair only to the extent that they lead to prices that are themselves unfair or if the dominant firm violates the contractual agreements concluded with its customers to impose such early price increases. The Paris Court of Appeal concluded that the FCA had failed to show that the prices resulting from Sanicorse's increases were objectively unfair (i.e., that they had no reasonable relation to the economic value of the service provided by Sanicorse). As regards the effects of Sanicorse's practices, the Court noted in any event that the FCA had not proven to the requisite standard that Sanicorse's conduct had the object or effect – either potential or actual – of deterring healthcare establishments from developing competing alternatives. The Court in particular noted that none of the Corsican healthcare establishments indicated that they had abandoned an alternative waste treatment project. Conversely, Sanicorse's conduct was likely to persuade healthcare establishments to develop competing alternatives. The FCA has challenged the Court of Appeal's ruling before the French Supreme Court.
In Gibmedia,103 following a complaint from advertiser Gibmedia, whose Google Ads account had been suspended, the FCA found that Google abused its dominant position by defining and implementing its Google Ads policies in a non-objective, non-transparent, and discriminatory manner between July 2012 and October 2018. In particular, the FCA found that Google imposed unfair trading conditions on advertisers active on its online advertising platform. First, the FCA considered the definition of Google's policies to be unfair because (1) some policies were not sufficiently 'objective and transparent' or 'clear', and (2) the policies were 'unstable' as Google regularly changed them over the period at stake. Second, the FCA considered that the application of the Google Ads policies was unfair because the definition of the policies left an excessive margin of discretion to Google. According to the FCA, this led to a 'differentiated and random' enforcement of the policies among advertisers. The FCA also noted that Google's conduct could not constitute a 'reasonable' means to achieve Google's consumer protection objectives and was therefore not justified. The FCA concluded that Google's conduct had – at least potential – effects on the market for online search advertising on which Google holds according to the FCA an 'extraordinary' dominant position and on the 'downstream digital services markets' on which advertisers are active. The FCA imposed a €150 million fine on Google as well as a series of injunctions. These injunctions cover (1) the clarification of the Google Ads policies, (2) the application of the Google Ads account suspension procedures, (3) several measures to prevent, detect and treat violations of the Google Ads policies, and (4) the publication of a summary of the decision. An appeal before the Paris Court of Appeal is currently pending.
Abusive discrimination usually consists in the application by a dominant company of dissimilar conditions to trading partners in equivalent transactions, thereby placing certain trading partners at a competitive disadvantage.104 The FCA considers that discriminatory practices may restrict competition when the dominant firm competes on the downstream market and discriminates against rivals (first-line discrimination). Discrimination may also occur when the dominant firm is not active downstream but discriminates between its customers, thereby altering competition between them (secondary-line discrimination). While first-line discrimination is an exclusionary abuse, second-line discrimination seems to fall within the category of exploitative abuses.
In Electronic Communications,105 the FCA found that Orange gave access to more comprehensive information regarding the operation of the copper local loop to its own commercial entities than to third-party operators. The FCA considered that the (first-line) discrimination in the access to information had artificially strengthened Orange's dominant position, and affected third-party operators by making them appear less reactive and less informed than Orange.
In 2018, in Photovoltaic Electricity,106 the FCA dismissed a first-line discriminatory claim concerning favouritism practices carried out by EDF in favour of its subsidiaries (Enedis and RTE) that were likely to unduly foreclose downstream competitors. The core of the allegations was based on EDF's discriminatory treatment with regard to the filing date of applications for connection to the photovoltaic electricity grid.107 Relying on the EU MEO precedent,108 the FCA pointed out that it is necessary, based on concrete market conditions, economic and legal context and having regard to the circumstances of the case, to demonstrate that the discriminatory conduct in question is likely to produce a competitive disadvantage through a distortion of competition among business partners. The FCA also recalled that setting a de minimis threshold to determine the existence of an abuse of dominance was not justified.109 It specified, however, that for discrimination to be likely to create a competitive disadvantage, it must affect the interests of the operator concerned.110 The FCA concluded that having regard to the circumstances of the case EDF's behaviour did not create a distortion of competition among photovoltaic electricity producers active on the downstream market.111
The FCA has also assessed secondary-line discrimination claims in several cases involving Google's policies for the operation of its Google Ads advertising platform (formerly Adwords). In NavX, the FCA took a strict approach towards secondary-line discrimination, suggesting that dominant firms have an obligation to treat all of their customers in the same manner, even when the dominant undertaking is not active in the downstream market.112 In particular, the FCA found that the Google Ads policies should be applied to all advertisers in an 'objective, transparent and non-discriminatory manner', and that discriminatory treatment could be considered abusive. The FCA ultimately accepted commitments from Google to clarify certain policies applicable to advertisers; in particular, in respect of the conditions of suspension of their accounts. In Gibmedia,113 while the FCA qualified Google's conduct as 'unfair' and noted that 'the notion of unfairness is not the same as the notion of discrimination', it also concluded that Google's conduct was 'discriminatory' but stopped short of attempting to establish an abusive secondary-line discrimination.
Remedies and sanctions
Article L464-2 of the Commercial Code provides that the FCA can impose fines on infringing undertakings of up to 10 per cent of the firms' worldwide turnover. The FCA can also order undertakings to terminate anticompetitive practices within a specified time limit, impose remedies, or both. As an alternative to fines, the FCA may accept commitments offered by the dominant firms being investigated in response to the FCA's competition concerns. In the event that an undertaking does not comply with the FCA's decision to terminate anticompetitive practices or with the FCA's orders, or does not implement the commitments, the FCA may impose a fine of up to 10 per cent of the undertaking's worldwide turnover, as well as penalty payments of up to 5 per cent of the undertaking's average daily turnover.
According to Article L464-2 of the Commercial Code, fines should be proportionate to:
- the gravity of the infringement;
- the importance of the damage to the economy;
- the group or company's individual situation; and
- the possible recidivism.
In any event, fines cannot exceed 10 per cent of the highest consolidated worldwide turnover achieved since the fiscal year preceding the starting date of the anticompetitive practices.
In 2011, the FCA issued guidelines on the method for determining fines.114 The basic amount of the fine is calculated as a proportion of the value of sales affected by the infringement, taking into consideration the gravity of the infringement and the damage to the economy. The proportion of the value of sales is between zero and 30 per cent. The basic amount of the fine is then adjusted taking into account the duration of the infringement, and the existence of aggravating circumstances (e.g., if the undertaking has a specific ability to influence) or mitigating circumstances (e.g., if the infringement was authorised or encouraged by public authorities). Other factors that might also be taken into account are the size and the economic power of the undertaking or its group, the fact that the undertaking is a single product company and recidivism.
With respect to repeat offenders, the Paris Court of Appeal ruled in 2016 in SNCF that recidivism can be established even though the two infringements were implemented on two different markets.115 In late 2018, in Photovoltaic Solar Power,116 the Paris Court of Appeal clarified the conditions under which recidivism can be established. The Court upheld a 2013 FCA decision imposing a €13.5 million fine on EDF,117 including a 25 per cent increase for reiteration. The FCA had found that EDF, as the incumbent electricity supplier, unfairly favoured its subsidiary, EDF ENR, operating in the competitive market for photovoltaic solar power offered to individual customers. In particular, EDF made various resources available to its subsidiary that could not be replicated by competitors, notably for prospecting, promoting and marketing photovoltaic offers. The FCA had applied a 25 per cent fine increase for recidivism on EDF on the ground that EDF had previously been sanctioned in 2000 for other abusive practices in the public lighting sector. Those other practices consisted in (1) bidding at very low prices in response to calls for tenders organised by municipalities, behaviour that then discouraged municipalities from maintaining any tendering process, EDF thereby being automatically attributed the market, and (2) concluding agreements with municipalities for an excessive period of time with termination clauses that made it more difficult to end the commercial relationship.118 On appeal, the Paris Court of Appeal first held that recidivism was not established and reduced the amount of the fine by half.119 However, in 2017, the French Supreme Court quashed this analysis and referred the case back to the Paris Court of Appeal.120 In its new ruling in late 2018, the Paris Court of Appeal essentially found that the 25 per cent fine increase was justified and proportionate because:
- the two infringements that led to the FCA's decisions of 2000 and 2013 were similar both in terms of object and effects (in both cases, EDF restricted competition on markets related to the electricity supply market where it holds a dominant position owing to its former legal monopoly through methods falling outside the scope of competition on the merits);
- the practices sanctioned in the 2013 decision were neither unprecedented nor innovative and EDF was fully aware of applicable competition rules; and
- the seven-year period that had elapsed between the 2000 decision and the beginning of the new practices represented less than half of the 15-year period after which the FCA typically waives recidivism.121
Since the issuance of the FCA's fining guidelines, fining decisions have been issued in 26 abuse of dominance cases:
- Mobile Telephony;
- Ordre des Experts Comptables;
- Photovoltaic Solar Power;
- Mobile Telephony at Réunion Island and Mayotte (residential customers);
- Antilles Dairy Products;
- Overseas DDT Deployment;
- Eiffel Tower;
- Mobile Telephony at Réunion Island and Mayotte (non-residential customers);
- Electronic Communications;
- DTT Broadcasting;
- Pétanque Balls;
- Funeral Services in the Ain Department;
- Termite Traps;
- Sanicorse (quashed by the Paris Court of Appeal);
- Apple; and
- AMD Treatment.122
In 2015, the FCA imposed a record-breaking fine of €350 million on Orange in the Electronic Communications case (after settlement).123 Although the FCA applied its fining guidelines in most of the cases mentioned above, it decided to depart from its guidelines in some other instances.124 In Gibmedia,125 the FCA recently expressly departed from its fining guidelines to impose a €150 million fine on Google. This is the second largest fine ever imposed by the FCA for an abuse of dominance.126 The FCA relied on a 'lump-sum' method to calculate the fine as it considered that the application of its fining guidelines would lead to a fine that would not be proportionate to the gravity of the facts and to the importance of the damage to the economy, and would therefore be deprived of any deterrent and punitive effect. This is the first time that the FCA has applied a lump-sum method for deterrence and punitive purposes.
ii Behavioural remedies
The FCA can impose behavioural remedies either as an interim measure or as part of a decision on the merits.
Pursuant to Article L464-1 of the Commercial Code, the FCA may grant interim measures in the event that the reported practices cause serious and immediate damage to the general economy, the economy of a sector or the interests of either consumers or the complainant. Since 2010, interim measures have been granted in seven abuse of dominance cases.127
Pursuant to Article L464-2 of the Commercial Code, the FCA may also order undertakings to terminate anticompetitive practices within a specific time frame or impose behavioural remedies in addition to fines in its decision on the merits.
In SNCF,128 the FCA used behavioural remedies as an alternative to sanctions in relation to exclusionary pricing objections. The FCA ordered SNCF to:
- implement an analytical accounting system for its freight services activity by full-trainload separate from its wagon-load freight services activity, so as to clearly identify costs that are common to the two types of activities;
- prepare a report identifying the costs that could be avoided over a three-year period in the event that the SNCF were to abandon its freight services activity by full-trainload; and
- guarantee, within three years of the FCA's decision, that prices offered to shippers for full-trainload freight services covered the average avoidable costs related to this activity over a three-year period.
The Paris Court of Appeal, however, annulled the third injunction in late 2018 as it found that such an injunction unduly interfered with SNCF's power to determine its pricing policy.129
In Electronic Communications,130 the FCA ordered Orange to provide competitors with equal access to the information it collects as the operator of the local loop, and to put an end to the loyalty and exclusivity policy subject to the investigation.
In Cegedim,131 the FCA ordered Cegedim to stop any form of discrimination among its customers based on whether they used Cegedim or competitor CRM software.
More recently, in Gibmedia,132 the FCA imposed several injunctions on Google relating to the operation of its Google Ads platform, that will remain in force until 1 January 2025 and that will apply to Google's contractual relationships with French advertisers. The FCA ordered Google to:
- clarify the wording of the Google Ads policies that aim at protecting Google's users against bad ads and websites, and notify relevant advertisers of policy changes at least two months in advance;
- clarify its Google Ads account suspension procedures, so as to limit immediate account suspensions only for egregious policy violations and provide advertisers with a warning at least one week before any account suspension for non-egregious violations;
- adopt measures to prevent, detect, and deal with violations of the Google Ads policies, more specifically to: (1) organise a mandatory annual compliance training for Google's sales teams in charge of providing support to advertisers; (2) put in place an easily accessible policy violation reporting tool for consumers; and (3) provide the FCA with an annual report so the FCA can verify that account suspensions are adequate to the objective of consumer protection, and publish a non-confidential version of the report on its Google Ads website; and
- present to the FCA a report detailing all the measures that Google envisages implementing to comply with the injunctions as well as a report detailing all the measures that Google has implemented to comply with the injunctions.
In addition, the FCA ordered Google to publish a summary of its decision on the homepage of Google's search engine and on the homepage of the Google Ads service. An appeal against the decision is currently pending before the Paris Court of Appeal.
iii Structural remedies
Pursuant to Article L430-9 of the Commercial Code, the FCA can order an undertaking or a group of undertakings that abused either their dominant position or the state of economic dependence of a commercial partner to alter or terminate any agreement that gave rise to the underlying dominant position, including a merger agreement previously authorised by the FCA in the context of a merger review. This provision enables the FCA to undo a transaction or an agreement for abuse of dominance. The FCA has used this power on only one occasion. In Water Market,133 the FCA found that the Compagnie Générale des Eaux and the Lyonnaise des Eaux, which had created several joint ventures, were abusing their collective dominance by deciding not to compete against their joint ventures for certain calls for tenders. The FCA found that the termination of the joint ventures was necessary to remedy the behaviour and, ultimately, the Compagnie Générale des Eaux and the Lyonnaise des Eaux voluntarily terminated their joint venture agreements.
The FCA is also empowered to order structural remedies in the event of abuse of dominance or economic dependence in the retail sector (see Article L752-26 of the Commercial Code).
In Itas/TDF,134 the FCA stated that merger control and antitrust rules are strictly distinct. The FCA, however, specified that any abusive conduct distinct from the transaction itself may constitute an anticompetitive practice, and could result in the transaction being annulled under Article L.430-9 of the Commercial Code. In the case at hand, the FCA nonetheless concluded that this provision did not apply, in the absence of any abusive conduct by TDF that could be detached from the merger itself.
As an alternative to sanctions and remedies, the FCA may also accept commitments offered by undertakings pursuant to Article L464-2 of the Commercial Code. The FCA can make such commitments binding in exchange for the closing of an investigation on the merits without making any finding of an infringement or imposing any sanction, provided the commitments are accepted before the FCA issues a statement of objections. The FCA uses the commitments procedure to intervene more quickly and avoid the administrative costs and legal constraints of establishing an abuse of dominance.
The FCA issued one commitment decision in 2020, compared to none in 2019 and one in 2018. In 2020, the FCA also issued a decision imposing a fine on PMU for having breached the commitments offered in 2014.
In La Poste,135 the FCA closed an investigation into La Poste's loyalty rebates schemes after La Poste offered commitments. The French postal incumbent agreed to end any price bundling between home and out-of-home parcel deliveries by fixing the rebates associated with both services separately. La Poste also agreed to suppress the loyalty effects resulting from rebates applicable to home parcel deliveries by setting standardised volume rebates for its customers with standard rates and by limiting price variations for customers whose rates are set by La Poste on a case-by-case basis. These commitments are applicable for a period of five years and will become binding at the end of a period of one month following the end of the French state of health emergency due to the coronavirus pandemic.
In PMU II,136 the FCA fined PMU €900,000 for breaching its commitments to separate its online and offline betting services. More specifically, it found that PMU had not separated bets placed online and in-store for international horse races. The FCA found that this was a 'serious breach' of the commitments offered by PMU in 2014 in PMU I.137 The FCA considered that the 2014 commitments were unambiguous and thus PMU could not reasonably allege that it ignored that the commitment to separate bets applied not only to French races, but also to international races.
The French Minister of the Economy, certain other public entities and any company may refer practices falling within the scope of Article L420-2 of the Commercial Code to the FCA. The FCA may also initiate investigations ex officio into alleged abuses of a dominant position. The FCA cannot investigate facts that took place more than five years prior to the investigation unless a procedural act interrupts this statute of limitations (see Article L462-7 of the Commercial Code). If the FCA considers that a complaint is unsubstantiated, it can issue a reasoned decision rejecting the complaint at a preliminary stage.
i Interim measures
Claimants may request interim relief. A request for interim relief must be filed concurrently with the action on the merits and lasts approximately six months. The FCA will order interim measures if the following cumulative criteria are met:
- the FCA has jurisdiction over the relevant practices on the merits;
- the alleged practices are susceptible of breaching competition rules; and
- the alleged practices may have serious and immediate effects on consumers, the sector or the interests of the plaintiff.
In practice, interim measures are ordered mainly in situations where the defendant's actions threaten to foreclose a competitor from a market. The interim measure investigation is followed by a hearing and a decision whereby the FCA decides whether interim measures are justified and whether an investigation on the merits is required. The FCA generally issues a decision within one or two months of the hearing, although it sometimes issues its decision within a very short time frame (for instance, within one week of the hearing in the Amadeus case).138 The parties may appeal the interim measure decision before the Paris Court of Appeal within 10 days of the notification of the decision.
In both 2019 and 2020, the FCA ordered interim measures against Google. In 2019, in Amadeus,139 the FCA considered that Google's decision to suspend the Google Ads accounts of paid phone directory services operator Amadeus and to refuse to display its ads on Google Ads may amount – at the interim measure stage – to a sudden termination of the commercial relationship under conditions that are not objective, not transparent and discriminatory. In particular, the FCA noted:
- the absence of prior notice before any account suspension or clear indication of the violations justifying such suspensions; and
- the fact that Google's sales teams were involved in Amadeus' advertising campaigns that were deemed non-compliant with the Google Ads policies.
The FCA found that the practices had a serious and immediate impact on Amadeus, which lost approximately 90 per cent of its revenues, and therefore justified granting interim measures pending a decision on the merits. Interestingly, the interim measures go beyond the individual situation of Amadeus and extend more generally to all companies operating in the sector of paid phone directory services. Specifically, the FCA ordered that Google:
- clarify the Google Ads policies applicable to paid phone directory operators;
- provide, except in exceptional circumstances, a prior warning specifying the alleged violation before suspending an account;
- organise face-to-face training on the content and scope of the clarified policies for Google's sales teams in charge of providing personalised support to advertisers operating in the sector; and
- manually review the compliance of Amadeus' ads with the clarified policies. On appeal, the Paris Court of Appeal annulled the measure related to the sales teams' training as it considered that it was not necessary to respond to the emergency situation but confirmed the three other measures.140 In October 2020,141 the FCA closed the investigation into the merits of the Amadeus case since it considered that the exact same practices had already been dealt with, and sanctioned, in Gibmedia.142
In Google v. Press publishers,143 the FCA found that Google's refusal to compensate press publishers and news agencies for the reproduction of previews of their content in its search results may amount to an abuse of Google's dominance on the French market for general search services. The FCA found – at the interim measure stage – that Google may have relied on its dominant position to: (1) impose unfair trading conditions on press publishers and agencies through a 'zero compensation' policy; (2) impose discriminatory conditions by applying the same policy to all publishers and agencies, irrespective of their individual situations; and (3) circumvent the spirit and letter of the French law implementing the EU Copyright Directive (see above), which created related rights to the benefit of publishers, by giving them the right to authorise or prohibit the reproduction of their publications by platforms, aggregators and search engines. The FCA considered that Google's practices caused a serious and immediate damage to the press sector, in particular given the importance that Google search services play in attracting traffic to the publishers' websites. As a consequence, and pending its decision on the merits, the FCA ordered Google to:
- negotiate in good faith with any publisher and news agency or collective management organisation that request it, the remuneration owed by Google to the latter for the use of protected content on its services, in accordance with the law of 24 July 2019 and based on transparent, objective and non-discriminatory criteria;
- communicate to publishers and news agencies the information necessary for a transparent assessment of the remuneration of related rights as provided by law of 24 July 2019;
- maintain, during the negotiation period, the principles for the display of protected content put in place since the entry into force of the law of 24 July 2019, according to the parameters chosen by the publishers;
- conduct the negotiations within three months of the receipt of a request to enter into negotiations;
- take the necessary measures to ensure that the existence and the outcome of the negotiations do not affect the indexing, ranking or presentation of the protected content on Google's services;
- take the necessary steps to ensure that the negotiations do not affect any other economic relationship that Google maintains with publishers and news agencies; and
- send monthly compliance reports to the FCA until the publication of the FCA's decision on the merits.
The FCA found that these injunctions were necessary to ensure fair trading conditions between Google and the publishers and news agencies in relation to their related rights until the publication of its decision on the merits. The FCA, however, underlined that these injunctions did not impact the publishers' and news agencies' right not to enter into negotiations with Google or to grant Google a free licence for their related rights if they wished to do so. On 8 October 2020, pending the FCA's decision on the merits, the Paris Court of Appeal dismissed the appeal brought by Google against the interim measures decision.144 First, the Court held that Google is dominant on the market for online general search (with a market share of around 90 per cent) and may prima facie have imposed unfair trading conditions that would constitute an exploitative abuse of a dominant position. Google's arguments relating to the lack of causal link between its actions and a reduction of online traffic on press publishers' websites, and also to the lack of anticompetitive effects, were dismissed. Second, the Court found that the alleged infringement caused serious, urgent and immediate harm to the press sector. In that context, the Court considered that most of the interim measures imposed by the FCA were both necessary and proportionate. However, the Court modified one of the interim measures listed above, which was intended to ensure that the indexation, classification and presentation of protected content by Google were not affected by the negotiations. The Court reduced the scope of this measure to ensure that Google is able to keep improving its services, as long as this does not directly or indirectly harm copyright-related rights holders.
In December 2020,145 the FCA notably announced that several pending investigations in the digital sector should be concluded in 2021, including Google's compliance with the interim measures imposed in Google v. Press publishers.
ii Investigation on the merits
If the FCA considers that a complaint is well grounded, it appoints case handlers to investigate the case. The case handlers have wide investigative powers and may conduct dawn raids if they are authorised to do so by a court, or request information from undertakings. They can also interview employees. The investigation period typically lasts from six months to three years (or sometimes more), until the case handler notifies the companies involved of its objections. The companies have two months to respond to the objections. This is followed by a second exchange of written briefs and a hearing. The exchange of written submissions generally lasts one to two years, until a hearing is scheduled.
The parties are invited to a hearing before the FCA Board where the case handlers provide an oral presentation of their investigation. The parties may also present their observations orally.
The FCA generally issues a decision within three months of the hearing. It may find that the alleged practices are not established, or impose a fine on the undertakings and order remedies. The parties may appeal the decision before the Paris Court of Appeal within a month. The Paris Court of Appeal's rulings may in turn be challenged before the French Supreme Court, which only has jurisdiction over matters of law.
If the FCA intends to implement the commitment procedure as an alternative to an infringement procedure, the case handlers inform the undertakings of the FCA's preliminary competition concerns at an early stage during the investigation (before a statement of objections has been issued) and invite them to offer commitments that adequately address the identified concerns.146 Once the proposed commitments have been received, the case handlers carry out a market test, which is published on the FCA's website, to ensure that the proposed commitments are considered adequate by the main stakeholders. The FCA may either accept or reject the commitments. The FCA may also require amendments. If the FCA finally considers that the commitments offered address its competition concerns, it closes the investigation without any finding of infringement and makes the commitments binding in its final decision.
The settlement procedure was modified by Law No. 2015-990 of 6 August 2015. It is available only after the FCA investigation services have issued a statement of objections. Under the new regime, settling companies commit to not challenging the objections notified by the FCA and, in exchange, can negotiate a fine range with the investigation services. Companies may also offer behavioural commitments. The FCA board takes the ultimate decision but will comply with the fine range negotiated with the investigation services.
In December 2018, the FCA adopted its procedural notice on the new settlement procedure.147 While not containing any major change, the notice provides some welcome clarifications, notably concerning the possibility for companies to file written comments before the FCA board on the fining determinants and implement the settlement procedure in conjunction with the leniency procedure. The notice also reaffirms the FCA's preference for cases in which all parties opt in to the procedure, thereby avoiding 'hybrid' scenarios. From the point of view of the FCA, the use of the settlement procedure enables companies to save procedural costs and to obtain a fine reduction (that can sometimes be substantial). In addition, the settlement procedure is likely to facilitate the adoption of shorter decisions in a shorter time frame than the ordinary procedure, and saves on resources consumed by any contentious appeal. However, the inability to negotiate the scope of the statement of objections received prior to settling remains at odds with the European Commission's settlement process and significantly reduces the scope of the negotiations.
In Electronic Communications,148 although the new regime was not yet applicable, the FCA's investigation service anticipated the reform of the settlement procedure and negotiated with Orange a €350 million cap on the fine in exchange for Orange's commitment not to challenge the objections and to implement behavioural remedies. The FCA's board eventually imposed the maximum fine on Orange.
In addition, the FCA has adopted two settlement decisions in abuse of dominance cases since the entry into force of the new settlement regime (before the publication of the settlement notice). In Pétanque Balls, the FCA settled a fine of €320,000 with Obut, as well as receiving their commitment to implement an antitrust compliance programme.149 In Engie,150 Engie did not challenge the FCA's objections, and the FCA imposed a €100 million fine following a settlement procedure.
Private enforcement claims may be brought under general tort law provisions on the basis of Article 1240 of the Civil Code, within five years of the day the victim becomes aware or should have become aware of the wrongdoing (as provided by Article 2224 of the Civil Code). Private enforcement claims require the defendant to prove a fault, a damage and a causal link between the two. Since the implementation into French law of the EU Damages Directive,151 an FCA decision sanctioning anticompetitive practices creates a non-rebuttable presumption before civil and commercial courts provided that all appeals against the FCA's decision are exhausted. Establishing a fault is significantly more difficult in stand-alone actions. Proving the existence and the amount of the damage is also difficult in dominance cases, which explains why claimants often have to rely on expert economic and accounting reports. The principle of full compensation for the damage suffered applies (both material and non-material damage but there are no punitive damages).
Antitrust class actions have been available in France since 2014 under the following conditions:
- the claim is a follow-on action after a sanction decision by the FCA or the European Commission;
- the action is brought within five years of the final sanction decision (no longer subject to an appeal);
- the claim is brought by a consumer association on behalf of consumers; and
- consumers have opted in to join the class action.
Private enforcement has been limited in France, and there has not yet been any antitrust class action. The majority of cases are settled out of court. In addition, there is no easy access to evidence for claimants who bear the burden of proof (although the implementation of the EU Damages Directive under French law will be helpful for claimants). Further, although specific district courts and commercial courts have exclusive jurisdiction over antitrust claims, the judges are not specialised in antitrust matters, and often do not have independent means to assess the existence of dominance and the effects of the alleged abuses on the markets. Private claimants in France, therefore, essentially rely on decisions issued by the FCA (known as 'follow-on damages actions').
For instance, in Outremer Telecom v. Orange,152 Outremer Telecom brought an action before the Paris Commercial Court based on a 2009 FCA decision.153 Outremer Telecom alleged that Orange's abuse of its dominant position (and anticompetitive agreements) on the mobile telephone market in the Antilles and Guyana (French overseas territories) prevented it from expanding on this market. The Paris Commercial Court awarded Outremer Telecom €7.9 million to compensate for the damage resulting from Orange's abusive loyalty rebates and excessive prices policy on off-net calls. However, the Paris Court of Appeal cut the damages granted to Outremer Telecom to €2.6 million after reviewing the calculation of the damage estimate.154 In December 2017, in Digicel v. Orange,155 the Paris Commercial Court ruled on a separate follow-on damages action against Orange in relation to the same FCA decision. The Paris Commercial Court found that Digicel had been harmed by Orange's abusive loyalty rebates and discounts applied on calls from fixed phones to Orange mobiles in the Caribbean overseas territories. In the ruling, the Court acknowledged that Orange's practices had significant restrictive effects on Digicel's development since its entry into the Caribbean market in 2000 and therefore awarded Digicel €180 million based on an expert calculation of lost revenues, plus 10.4 per cent interest per year starting from 2009. This led to a total of €346 million in damages to be paid by Orange and its affiliate, Orange Caraïbe. The judge, however, rejected Digicel's claims in relation to Orange's other infringements. It found that Orange's exclusivity clauses with distributors and repairers did not have any impact on Digicel's development, as the latter had deliberately chosen a single-brand distribution network and had decided to undertake the reparations in mainland France. In June 2020,156 the Paris Court of Appeal upheld the Paris Commercial Court's ruling, but reduced the total amount of the damages to €249.5 million. In particular, the Court reassessed the expert calculation of lost revenues mentioned above, and found that Digicel failed to justify that the practices led it either to restrict its activity without being able to find alternative financing by means of loans or equity capital, or to abandon duly identified investment projects. This remains, however, the highest amount of compensation ever ordered by a French court for this type of claim.
In addition, in Betclic v. PMU,157 the Paris Court of First Instance ruled that a commitment decision that led the FCA to close the investigation on the merits without making a finding of infringement does not prevent ordinary courts from finding that the company having taken these commitments has engaged in abusive conduct. The Court also held that courts are free to rely on information contained in the commitment decision and use it as an indication or even prima facie evidence of the anticompetitive nature of the practices. The Court clearly stated that a company cannot invoke a commitment procedure to claim that it did not commit a fault so as to avoid compensating victims for the damage they suffered. In practice, the Paris Court of First Instance relied on the FCA's PMU commitment decision158 to find that PMU held a dominant position on the offline and online horse racing betting markets. The Court also relied on feedback during the market test when the PMU offered commitments in 2014 to find that the PMU had indeed abused its dominant position by pooling together its online and offline bets to gain an unfair competitive advantage. The Court ultimately decided to stay the proceedings, and ordered an expert to evaluate what could have been Betclic's market share had the PMU not pooled together its online and offline bets to determine the amount of damages to award to Betclic. The Paris Court of Appeal confirmed the judgment of the Court of First Instance and extended the expert's mission.159
In 2019, French courts issued (conflicting) decisions regarding the determination of the starting point of the limitation period for damages actions, in the context of follow-on claims. Article 2224 of the Civil Code provides that the limitation period starts running from the date on which the victim knew or could have known that it was a victim of the offence and knew or could have known about the characteristics of the offence, its imputability and its duration. In Arkeos v. EDF,160 the Paris Court of Appeal found that an FCA interim measures decision could not be considered as the starting point of the limitation period. It found that interim measures decisions are less detailed than FCA decisions on the merits, do not sanction an established anticompetitive practice and are likely to be called into question later by the FCA after its investigation on the merits. The Paris Court of Appeal concluded that the limitation period started running from the day the FCA's decision on the merits was adopted and the claimants' action was thus not time-barred. On the other hand, in CNAMTS v. Sanofi,161 the Paris Commercial Court found that the limitation period started running when the claimant, CNAMTS, provided the FCA with a study calculating its losses due to Sanofi's conduct in response to a request for information. The Paris Commercial Court, therefore, ruled that CNAMTS' claim was time-barred.
Purely stand-alone actions (not based on a previous FCA decision) are rare. Nevertheless, in Bottin Cartographes v. Google,162 the Paris Commercial Court granted €500,000 in damages based on a stand-alone claim brought by Bottin Cartographes. The latter alleged that Google implemented predatory prices by offering its Google Maps application programming interface (API) service, which enables third-party website operators to display a map on their website, free of charge. The Paris Court of Appeal, however, overruled the first instance decision and dismissed all the plaintiff's claims.163 The Court of Appeal decided to support its decision by asking the FCA for its opinion on the existence of a dominant position and the question of predation.164 The FCA found that irrespective of Google's market position, Google's behaviour with regards to Google Maps API could not be deemed predatory because the economic analysis submitted to the FCA showed that Google always covered at least its average incremental costs. In any event, there was no evidence of a predatory strategy, especially as there were a significant number of competitors in the market, many of them offering their products for free or on a 'freemium' basis, like Google. On the basis of the FCA's opinion, the Court of Appeal found that Google's behaviour could not be deemed abusive and dismissed all claims.
In SFR v. Orange,165 the Paris Commercial Court granted €51.4 million in damages against Orange following a stand-alone claim made by SFR. SFR claimed that Orange had implemented a margin-squeeze strategy by allowing secondary residence owners to suspend their landlines while they were away from their secondary residence.166 On this upstream market, Orange, however, refused to offer this interruptible telephone access to telecoms operators. The Commercial Court found that this practice constituted a margin squeeze because, as a result, SFR was not in a position to offer interruptible landline access to its downstream customers. The Paris Court of Appeal, however, annulled the Paris Commercial Court's judgment. The Court of Appeal found that the market for secondary residences was not a relevant product market because, from the demand-side perspective, 90 per cent of secondary residence owners considered that the interruptible line was substitutable with other telephone lines; and from the supply-side, the data used by SFR to demonstrate the cost difference as compared with other telephone lines was not sufficiently reliable.167 In 2016, the French Supreme Court overturned the Court of Appeal's ruling.168 The Supreme Court found that the Court of Appeal should have conducted a more detailed analysis on demand-side substitution, notably by making a distinction between secondary residence owners that purchased a simple fixed line and those that purchased multi-service fixed lines and mobile lines. The Supreme Court also found that the Court of Appeal should have ignored the unreliability of the data on supply-side substitution and should have discussed the relevance of the criteria used by SFR. The Supreme Court referred the case back to the appellate court. The Paris Court of Appeal ultimately awarded SFR €53 million in damages.169 On 16 September 2020, the French Supreme Court annulled the judgment of the Paris Court of Appeal for the second time.170 While the Supreme Court confirmed the existence of a relevant market for fixed telephony for secondary homes, on which Orange is dominant, it ruled that the Paris Court of Appeal had failed to properly assess Orange's allegedly abusive conduct. Again, the Supreme Court referred the case back to the appellate court.
In early 2021, in Oxone v. Google,171 the Paris Commercial Court ordered Google to pay €1.2 million in damages to Oxone, a telephone directory services company. The Court held that Google had abused its dominant position on the online search advertising market by applying non-transparent rules for access to its Google Ads services. Oxone's account was suspended several times by Google and, in most cases, by means of notice sent to the plaintiff in a foreign language. Although the case is formally considered as a stand-alone action, the Court's reasoning heavily relies on the findings made by the FCA in Gibmedia and in which it imposed a fine of €150 million on Google.172
In purely stand-alone actions, claimants may be exposed to a risk of conviction for abusive proceedings. Recently, the Paris Court of Appeal imposed a civil fine (€3,000) and damages (€20,000) on Avi Charente for abusive proceedings consisting of bringing a stand-alone action for abuse of dominance without having sufficient evidence to prove its claims.173 Conversely, in another case, the Paris Court of Appeal reversed the judgment of the Court of First Instance, which had ordered Inforad to pay €60,000 in damages to Coyote for abusive proceedings. The Court of Appeal considered that such an abuse requires an intention to harm, the proof of which was not provided in this case.174
Private enforcement is expected to continue developing as the EU Damages Directive is now implemented under French law.175
The adaptation of antitrust enforcement to the digital economy will remain one of the FCA's top priorities for 2021. In a press release of December 2020 on its priorities for 2021,176 the FCA mentions that the specialised Digital Economy Unit created in 2020 to provide dedicated support for cases related to the digital sector has been fully operational since January 2020. In 2021, the Unit published its study on fintechs177 and is expected to publish another study on the emergence of worldwide digital players in payment services. The Unit will also be responsible for developing new digital investigation tools, based, in particular, on algorithmic technology, big data and artificial intelligence.
In its contribution to the debate on competition policy in the digital sector of February 2020,178 the FCA expressed its views on the possible lines of approach to enhance antitrust enforcement in the digital sector, both at the European and French levels. The FCA suggested extending the notion of dominant position to 'structuring digital platforms', which would be defined as companies that provide online intermediation services and have structuring market power (by virtue of their size, financial capacity, user community or the data they hold), enabling them to control access to the market or significantly affect the functioning of the market. Moreover, structuring platforms would be those to which competitors, users or third parties require access to enable them to carry out their economic activity. In this context, the FCA proposed introducing new rules applicable only to structuring platforms, in particular to identify a non-exhaustive list of practices that may raise competition concerns when implemented by structuring platforms (including practices such as discrimination against competitors, restriction of access to non-dominated markets, use of data to raise barriers to entry, restriction of product interoperability, restriction of data portability or limitation of multi-homing possibilities). The FCA even suggested allowing competition authorities to impose commitments or prohibit these practices unless the structuring platform can demonstrate that the practices generate efficiencies and are, therefore, objectively justified. The FCA also stated that the notion of essential facilities should be adapted to include certain databases, communities of users or ecosystems. In its December 2020 press release,179 the FCA further announced that several pending investigations in the digital sector should be concluded this year, in particular the review of (1) Google's compliance with the interim measures imposed in Google v. Press publishers and (2) the request for interim measures from several trade associations against the changes announced by Apple concerning its next operating system for iPhone, iOS 14.180
Finally, interim measures cases may substantially increase in the coming years as the recent transposition of the ECN+ Directive into French law allows the FCA to impose interim measures on its own initiative, without having to wait for complaints from market players.181 This opportunity will undoubtedly be seized by the FCA, which considers interim measures to be particularly well-suited to the fast-evolving digital sector (as shown by the adoption of two interim measures decisions against Google in 2019 and 2020).182 To further facilitate the use of interim measures, the FCA, in its contribution to the debate on competition policy in the digital sector, even suggested allowing parties to submit a request for interim measures without having to simultaneously file a request on the merits, allowing this to be submitted afterwards.183
1 Antoine Winckler and Frédéric de Bure are partners, and Martha Smyth is an associate, at Cleary Gottlieb Steen & Hamilton LLP.
2 Another relevant provision is Article L420-5 of the Commercial Code, which prohibits abusively low prices for products and services sold to final consumers, Article L420-5 prohibits unilateral conduct, but may be found to exist even when the infringing company is not in a dominant position and the victim is not in a situation of economic dependence. Article L420-5 has only been applied in rare cases.
3 Guidance on the Commission's enforcement priorities in applying Article 82 of the EC Treaty to abusive exclusionary conduct by dominant undertakings, OJ C45 of 24 February 2009, p. 7. See also the European Union chapter.
4 The FCA imposed a €218.3 million fine on Apple for its abuse of economic dependence practice in FCA Decision No. 20-D-04 of 16 March 2020 concerning practices implemented in relation to the distribution of Apple products. The FCA also imposed a €444 million fine on Novartis, Roche and Genentech concerning an abuse of collective dominance in FCA Decision No. 20-D-11 of 9 September 2020 regarding practices implemented in the treatment of age-related macular degeneration sector. An appeal is pending before the Paris Court of Appeal in both of these decisions. The FCA also imposed a fine of €900,000 on PMU in FCA Decision No. 20-D-07 of 7 April 2020 for failing to comply with the commitments set out in FCA Decision No. 14-D-04 of 25 February 2014 concerning abuse of dominance practices in the online horse betting sector (an appeal is pending before the Paris Court of Appeal). However, this decision was not issued on the basis of Article L420-2 of the Commercial Code and is thus not included in the total amount of fines imposed by the FCA on this basis for 2020.
5 FCA Decision No. 20-D-06 of 2 April 2020 concerning practices implemented in the parcel delivery sector.
6 FCA Decisions Nos. 20-D-02 of 23 January 2020 concerning practices implemented by Orange in the electronic communications sector, 20-D-08 of 30 April 2020 concerning practices implemented in the sector of publishing and marketing of television channels (an appeal is pending before the Paris Court of Appeal), 20-D-15 of 27 October 2020 concerning practices implemented in the business travel distribution sector, and 20-D-21 of 8 December 2020 concerning practices in the tourist travel sector.
7 FCA Decisions Nos. 20-D-01 of 16 January 2020 regarding a practice implemented in the digital terrestrial television broadcasting sector (an appeal is pending before the Paris Court of Appeal) and 20-D-14 of 26 October 2020 regarding practices denounced by the company Amadeus.
8 FCA Decision No. 20-MC-01 of 9 April 2020 concerning requests for interim measures submitted by the Syndicat des éditeurs de la presse magazine, the Alliance de la presse d'information générale and others and Agence France-Presse.
9 FCA Decisions Nos. 21-D-04 of 24 February 2021 concerning practices implemented in the sector of publishing and sale of professional software, and 21-D-08 of 18 March 2021 regarding practices in the karaoke sector.
10 FCA Decisions Nos. 21-D-03 of 18 February 2021 regarding a request for interim measures by Plüm Energie in the sector of the supply of electricity in France, and 21-D-07 of 17 March 2021 regarding a request for interim measures submitted by several actors in the sector of advertising on iOS mobile apps.
11 FCA Decision No. 20-D-04, see footnote 4.
12 Decision 20-MC-01, see footnote 8.
13 Directive (EU) 2019/790 of the European Parliament and of the Council of 17 April 2019 on copyright and related rights in the Digital Single Market and French Law No. 2019-775 of 24 July 2019 on the Creation of Neighbouring Rights for the Benefit of Press Agencies and Publishers. This French law came into force on 24 October 2019.
14 Paris Court of Appeal, 8 October 2020, Google v. Press Publishers.
15 FCA Decision No. 20-D-11, see footnote 4.
16 FCA Decision No. 14-D-09 of 4 September 2014 concerning practices in the espresso coffee machines sector.
17 FCA Decision No. 16-D-29 of 19 December 2016 concerning practices implemented in the after-sales market of photocopiers.
18 Case No. IV/34.330, Pelikan/Kyocera, Commission decision of 22 September 1995. According to this case law, any dominant position on the secondary market for the sale of consumables or services of an operator active on the market for primary goods may be ruled out if adequate competition is shown to exist in the primary market and if the primary and secondary markets are closely associated in the eyes of customers at the time of their purchasing decision.
19 FCA Decision No. 18-D-10 of 27 June 2018 concerning practices implemented in the IT maintenance sector.
20 FCA Decision No. 12-D-24 of 13 December 2012 concerning practices in the mobile telephony sector.
21 Paris Court of Appeal, 19 May 2016, Mobile Telephony, upheld by French Supreme Court, 5 April 2018, Nos 16-19.186 and 16-19.274.
22 FCA Decision 19-D-26 of 19 December 2019 regarding practices implemented in the sector of online search advertising sector. An appeal is pending before the Paris Court of Appeal. The FCA had already investigated complaints from Google Ads advertisers in the past, but those complaints never resulted in an infringement decision. In NavX, the FCA imposed interim measures and then accepted commitments (FCA Decisions Nos. 10-MC-01 of 30 June 2010 concerning the practices of Google in the online advertising sector and 10-D-30 of 28 October 2010 concerning the practices of Google in the online advertising sector). In E-Kanopi, the FCA dismissed the complaint filed by E-Kanopi (FCA Decision No. 13-D-07 of 28 February 2013, upheld by the Paris Court of Appeal on 24 June 2014 and by the Supreme Court on 19 January 2016, No. 14-21.670).
23 Cases Nos. M.8180, Verizon/Yahoo, Commission decision of 21 December 2016; M.7217, Facebook/WhatsApp, Commission decision of 3 October 2014; M.5727, Yahoo Search Business, Commission decision of 18 February 2010; M.4731, Google/DoubleClick, Commission decision of 11 March 2008; FCA Decision No. 10-MC-01, see footnote 22; FCA Opinion No. 10-A-29 of 14 December 2010 on the online advertising sector.
24 FCA Decision No. 18-D-03 of 20 February 2018 concerning practices implemented in the sector of the distribution of termite traps with biocide in Réunion Island, French Antilles and French Guiana.
25 FCA Decision No. 19-D-26, see footnote 22.
26 FCA Annual Report for 2012, p. 152.
27 FCA Decision No. 04-D-48 of 14 October 2004 concerning practices implemented by France Telecom, SFR Cegetel and Bouygues Telecom.
28 FCA Decision No. 05-D-32 of 22 June 2005 concerning practices in the pet food sector.
29 FCA Decision No. 19-D-26, see footnote 22.
30 Case No. T-342/99, Airtours, General Court judgment of 6 June 2002.
31 FCA Decision No. 12-D-06 of 26 January 2012 concerning practices implemented in the civil engineering sector in Saint-Pierre-et-Miquelon.
32 In addition to FCA Decision No. 12-D-06 (see footnote 31), see FCA Decisions Nos. 05-D-49 of 28 July 2005 concerning practices in the sector of hiring maintenance for postage machines; and 02-D-44 of 17 July 2002 concerning the water market sector. See also FCA Decision No. 07-D-08 of 12 March 2007 concerning practices in the supply and distribution sector of cement in Corsica, which was partially dismissed by the Paris Court of Appeal with respect to collective dominance in a ruling of 15 April 2010.
33 The FCA also found in some circumstances that companies held a collective dominant position without finding any abuse (see, for instance, FCA Decisions No. 00-D-83 of 13 February 2001 concerning practices implemented during the 1998 Football World Cup, upheld by the Paris Court of Appeal on 30 October 2001 and by the French Supreme Court on 8 July 2003 (No. 01-17.015); No. 06-D-02 of 20 February 2006 concerning practices in the roadworks sector for the manufacture of bituminous asphalt in the Ardennes department; and No. 06-D-18 of 28 June 2006 concerning practices implemented in the film advertising sector).
34 FCA Decision No. 20-D-11, see footnote 4.
35 Roche, in turn, held a majority stake in Genentech before 2009 and acquired all of its outstanding shares in 2009.
36 Italian Competition Authority, Roche-Novartis/Farmaci Avastin e Lucentis, I760, Decision No. 24823, 27 February 2014.
37 Decision 20-D-08, see footnote 6.
38 Paris Court of Appeal, 4 May 2004, CNPA v. Honda Motor ea. See also FCA Decisions No. 14-D-07 of 23 July 2014 concerning practices implemented in the distribution of brown goods, upheld by the Paris Court of Appeal on 3 December 2015; No. 10-D-08 of 3 March 2010 concerning practices implemented by Carrefour in the general food retail sector; No. 04-D-26 of 30 June 2004 concerning practices implemented by Champagne Ardenne, upheld by the Paris Court of Appeal on 25 January 2005 and by the French Supreme Court on 28 February 2006 (No. 05-12.138); No. 02-D-77 of 27 December 2002 concerning a complaint from Daniel Grenin SA; and No. 01-D-49 of 31 August 2001 concerning a complaint and a request for interim measures from Concurrence against Sony.
39 FCA Decisions Nos. 96-D-44 of 18 June 1996 concerning practices implemented in the advertising sector; 04-D-26 (see footnote 38); and 04-D-44 of 15 September 2004 concerning a claim brought by the Ciné-Théâtre du Lamentin in the film distribution and exploitation sector.
40 FCA Decision No. 20-D-04, see footnote 4.
41 Paris Court of Appeal, 9 March 2010, SNCM, confirming FCA Decision No. 09-D-04 concerning practices implemented in the maritime transport sector between Corsica and the mainland.
42 FCA Decision No. 19-D-26, see footnote 22, Paragraph 353.
43 See the European Union chapter.
44 In 2007, the FCA imposed a fine of €10 million on GSK for having applied predatory prices in relation to an injectable antibiotic called cefuroxime sodium sold by GSK under the name Zinnat, to appear as an aggressive player and deter generic manufacturers from entering the market on which GSK held a dominant position through the sale of its injectable antiviral Zovirax (FCA Decision No. 07-D-09 of 14 March 2007 concerning practices implemented by GSK). However, this decision was annulled by the Paris Court of Appeal on the ground that the FCA had not established the necessary link between GSK's behaviour on the non-dominated market for cefuroxime sodium and its dominant position on the injectable Zovirax market (Paris Court of Appeal, 8 April 2008, GSK). The French Supreme Court upheld the position of the Court of Appeal by noting that the assumption under which there is a link between the anticompetitive practice and the dominated market should not come into play when the prohibited practice is implemented in a market other than the dominated market (French Supreme Court, 17 March 2009, No. 08-14.503). In this case, the French Supreme Court recalled that there must be 'particular circumstances' establishing (a) that it was to strengthen its dominant position in a market that a company decided to implement a prohibited abusive practice in another market in which it has no dominant position; or (b) that the two concerned markets are so closely related that a company is placed in a situation comparable to that of holding a dominant position in the markets in question as a whole, which was not the case here.
45 See, in particular, FCA Decisions No. 17-D-16 of 7 September 2017 concerning practices implemented by Engie in the energy sector; No. 17-D-26 of 21 December 2017 concerning practices implemented in the collection and recycling of non-hazardous office waste; and No. 17-D-09 of 1 June 2017 concerning practices implemented by the National Institute of Preventive Archaeological Surveys in the preventive archaeology sector.
46 FCA Decision No. 12-D-25 of 18 December 2012 concerning practices implemented in the railway freight sector. A fine was imposed on SNCF but not in relation to the dominant company's pricing practices. An appeal is pending before the French Supreme Court.
47 Paris Court of Appeal, 6 November 2014, SNCF.
48 French Supreme Court, 22 November 2016, Nos. 14-28.224 and 14-28.862.
49 Paris Court of Appeal, 20 December 2018, SNCF. The Court, however, annulled one of the three injunctions ordered by the FCA upon the SNCF. An appeal is pending before the French Supreme Court.
50 Paris Court of Appeal, 25 November 2015, Bottin Cartographes v. Google.
51 FCA Opinion No. 14-A-18 of 16 December 2014 concerning a dispute between Bottin Cartographes and Google.
52 FCA Decision No. 18-D-07 of 31 May 2018 concerning practices implemented in the sector of maritime passenger crossing services between the mainland and the Island of Yeu.
53 FCA Decision No. 04-D-79 of 23 December 2004 concerning practices implemented by the RDPEV.
54 In a first ruling of 28 June 2005, the Paris Court of Appeal dismissed the predatory pricing claim made by the same competitor, confirming, in particular, the scope of the relevant costs to be taken into account in determining the incremental costs (Paris Court of Appeal, 28 June 2005, Vedettes Vendéennes). However, in June 2008, the French Supreme Court held that the Court of Appeal should have examined whether the RDPEV could have avoided the costs linked with the operation of its summer fleet so as to carry out its public service mission (French Supreme Court, 17 June 2008, No.05-17.566). The case was thereby referred back to the Court of Appeal. Again in June 2009, the Court of Appeal confirmed the 2004 FCA decision by ruling that the RDPEV had not abused its dominant position since the traditional predatory pricing test could not be applied to the allegedly infringing company because of its public service mission (Paris Court of Appeal, 9 June 2009, Vedettes Vendéennes). The French Supreme Court, in July 2010, overruled the Court of Appeal and held that the standard competition law test for predatory pricing should be applied in the present case since the RDPEV, alongside its public service mission, also carries out competitive activities (French Supreme Court, 13 July 2010, No.09-67.439). The Court of Appeal, to which the case was then referred, ultimately overturned the 2004 FCA decision (Paris Court of Appeal, 20 December 2012, Vedettes Vendéennes). This follows several proceedings before the French jurisdictions, including two rulings of the Paris Court of Appeal on 28 June 2005 and 9 June 2009, and two annulment decisions of the French Supreme Court on 17 June 2008 (No. 05-17.566) and 13 July 2010 (No. 09-67.439).
55 See, in this regard, Paris Court of Appeal, 12 October 2017, Société TDF.
56 FCA Decision No. 21-D-03, see footnote 10.
57 FCA Decision No. 14-D-04, see footnote 4.
58 FCA Decision No. 20-D-07, see footnote 4.
59 FCA Decision No. 15-D-05 of 15 April 2015 concerning certain practices in the passenger urban transport sector.
60 FCA Decision No. 17-D-06 of 21 March 2017 concerning practices implemented in the gas and electricity supply sector, which imposed a €100 million fine on Engie.
61 French Supreme Court, 3 March 2009, No. 08-14.435.
62 FCA Decision No. 15-D-10 of 11 June 2015 concerning practices implemented by TDF on the Eiffel Tower site, upheld by the Paris Court of Appeal on 12 October 2017 (an appeal is pending before the French Supreme Court).
63 FCA Decision No. 08-D-16 of 3 July 2008 concerning practices in the ID photos sector.
64 FCA Decision No 15-D-09 of 4 June 2015 concerning implemented in the mobile telephony equipment sector.
65 FCA Decision No. 17-D-12 of 26 July 2017 concerning practices implemented in the sugar beet supply sector.
66 FCA Decision No. 04-D-65 of 30 November 2004 concerning practices in the postal services sector. See also FCA Decision No. 05-D-32 (see footnote 28).
67 FCA Decision No. 16-D-11 of 6 June 2016 concerning practices implemented in the terrestrial television broadcasting sector, imposing a €20.6 million fine on TDF. The Paris Court of Appeal reduced the amount of the fine to €17.2 million on 21 December 2017, considering that the disparagement charge was not established (Paris Court of Appeal, 21 December 2017, TDF). On 16 September 2020, the French Supreme Court rejected TDF's appeal and confirmed the Paris Court of Appeals' finding that the rebate scheme implemented by TDF was not per se illegal but was, however, anticompetitive due to its effects (Case No. 18-11.034).
68 FCA Decision No. 20-D-06 (see footnote 5), related to FCA Decision No. 11-MC-01 of 12 May 2011 concerning practices in the delivery of parcels to pick-up points sector. The French Minister of the Economy and Kiala's complaints concerned among other things La Poste's alleged agreement with parcel delivery firm Mondial Relay as well as La Poste's loyalty rebates schemes. In May 2011, the FCA issued an interim measure decision ordering the suspension of the signature of La Poste's partnership agreement with Mondial Relay until the FCA's decision on the merits. Following its investigation on the merits, the FCA decided that some aspects of the complaints, including La Poste's partnership with Mondial Relay, did not give rise to competition concerns. However, the FCA expressed concerns about La Poste's loyalty rebate policy.
69 FCA Decision No. 11-MC-01, see footnote 68.
70 FCA Decision No. 14-D-09, see footnote 16.
71 FCA Decision No. 17-D-21 of 9 November 2017 concerning practices implemented in the medium and low-voltage electrical distribution equipment maintenance sector.
72 FCA Decision No. 18-D-10, see footnote 19.
73 FCA Decisions Nos. 20-D-02 (see footnote 6) and 19-D-16 of 24 July 2019 concerning practices implemented in the fuel sector in Réunion Island.
74 Paris Court of Appeal, 31 January 2006, NMPP.
75 FCA Decision No. 19-D-03 of 16 January 2019 concerning practices implemented in the cross-Channel transport of day-old chicks.
76 FCA Decision No. 17-D-06, see footnote 60.
77 FCA Decision No. 07-MC-03 of 7 June 2007 concerning a request for interim measures filed by Solutel against France Télécom and FCA Decision (on the merits) No.08-D-21 of 7 October 2008 concerning practices implemented by France Telecom on the market for engineering, consulting and technical control of telephone installations in the private sector.
78 FCA Decision No. 14-MC-02 of 9 September 2014 in the gas and electricity sector, partially quashed by Paris Court of Appeal on 31 October 2014 and FCA Decision (on the merits) (No.17-D-06), see footnote 60.
79 FCA Decision No. 12-D-25, upheld by the Paris Court of Appeal on 6 November 2014, see footnote 46. An appeal is pending before the French Supreme Court.
80 FCA Decision No. 14-D-06 of 8 July 2014 concerning practices in the medical information database sector, upheld by the Paris Court of Appeal on 24 September 2015 and by the French Supreme Court on 21 June 2017 (No. 15-25.941).
81 Paris Court of Appeal, 24 September 2015, Cegedim.
82 French Supreme Court, 21 June 2017, see footnote 80.
83 FCA Decision No. 20-D-02 of 23 January 2020, see footnote 6.
84 FCA Decision No. 13-D-07, see footnote 22. Absent the demonstration of an anticompetitive object or effect, the abrupt termination of a commercial relationship may be sanctioned under commercial law on the basis of Article L442-1 II of the Commercial Code.
85 FCA Decision No. 18-D-14 of 24 July 2018 concerning practices implemented in the marketing of satellite TV decoders sector.
86 FCA Decision No. 13-D-11 of 14 May 2013 concerning practices in the medicinal products sector, upheld by the Paris Court of Appeal on 18 December 2014 and by the French Supreme Court on 18 October 2016, No. 15.10-384.
87 FCA Decision No. 13-D-21 of 18 December 2013 concerning practices implemented in the French market for high-dosage buprenorphine sold in private practices, upheld by the Paris Court of Appeal on 26 March 2015 and by the French Supreme Court on 11 January 2017, No. 15-17.134.
88 Paris Court of Appeal, 11 July 2019, Janssen-Cilag and FCA Decision No. 17-D-25 of 20 December 2017 regarding practices implemented in the sector of transdermal patches of fentanyl.
89 On 1 May 2012, the AFSSAPS became the ANSM.
90 FCA Decision No. 20-D-11, see footnote 4.
91 FCA Decision No. 15-D-06 of 21 April 2015 concerning practices implemented in the online hotel booking sector.
92 Law No. 2015-990, 6 August 2015, Article 133.
93 Paris Commercial Court, 7 May 2015, Expedia, as amended by Paris Court of Appeal, 21 June 2017. The Paris Commercial Court rejected the Minister of the Economy's claim to impose a civil fine on Expedia, due to lack of evidence of the latter's involvement in the alleged practices. In this regard, the Commercial Court ruled that Expedia was not a party to the contracts containing the problematic most-favoured nation (MFN) clauses. Although the Court of Appeal agreed with this finding, the Court imposed a civil fine on Expedia on the basis of another infringement (i.e., the significant imbalance in Expedia's commercial relationship with hotel partners caused by MFN clauses).
95 FCA Decision No. 19-D-23 of 10 December 2019 concerning practices implemented in the online hotel booking industry.
96 FCA Decision No. 17-D-02 of 10 February 2017 concerning practices implemented in the competitive pétanque balls sector.
97 FCA Decision No. 20-D-01, see footnote 7.
98 Case C-6/72, Continental Can, Court of Justice judgment of 21 February 1973, Paragraph 26.
99 Case C-27/76, United Brands, Court of Justice judgment of 14 February 1978, Paragraph 249. See also the European Union chapter.
100 FCA Decision No. 09-D-24 of 28 July 2009 concerning practices implemented in the telecommunications sector in overseas departments.
101 Paris Court of Appeal, 14 November 2019, Sanicorse.
102 FCA Decision No. 18-D-17 of 20 September 2018 concerning practices implemented in the infectious medical waste management sector in Corsica. An appeal is pending before the French Supreme Court.
103 FCA Decision No. 19-D-26, see footnote 22.
104 FCA Decisions No. 06-D-23 of 21 July 2006 concerning practices in the map editing and tourist information sector; No. 07-D-28 of 13 September 2008 concerning practices implemented by the Havre Port Authority; and No. 09-D-02 of 20 January 2009 concerning practices in the press distribution sector.
105 FCA Decision No. 15-D-20 of 17 December 2015 concerning practices implemented in the telecommunications services sector.
106 FCA Decision No. 18-D-11 of 4 July 2018 concerning practices implemented by EDF in the photovoltaic electricity sector.
107 This discriminatory treatment included delays in the connection and commissioning of competitors' production units, delaying strategies and backdating strategies for accepting technical and financial proposals necessary for connection to the grid, which allegedly benefited the production units proposed by EDF and its subsidiaries.
108 Case C-525/16, MEO, Court of justice judgment of 25 May 2018.
109 Case C-23/14, Post Danmark, Court of justice judgment of 6 October 2015.
110 Case C-525/16, MEO, see footnote 108.
111 In any case, the FCA noted that if backdating practices do not raise a competition issue, they may, however, fall within the jurisdiction of criminal, civil or administrative courts.
112 FCA Decisions Nos. 10-MC-01 and 10-D-30, see footnote 22.
113 FCA Decision No. 19-D-26, see footnote 22.
114 Notice of 16 May 2011 on the Method Relating to the Setting of Financial Sanctions.
115 See footnote 46.
116 Paris Court of Appeal, 27 September 2018, Photovoltaic Solar Power.
117 FCA Decision No. 13-D-20 of 17 December 2013 concerning the practices implemented by EDF in the photovoltaic solar power sector.
118 FCA Decision No. 00-D-47 of 22 November 2000 concerning practices implemented by EDF and its subsidiary, Citélum, in the public lighting sector.
119 Paris Court of Appeal, 21 May 2015, EDF.
120 French Supreme Court, 27 September 2017, Nos. 15-20.087 and 15-20.291.
121 In its fining guidelines, the FCA indeed indicates that it will typically waive recidivism when a period of 15 years (or more) between the practices has elapsed (Paragraph 51).
122 FCA Decisions No. 12-D-06 (see footnote 31); No. 12-D-24 (see footnote 20); No. 12-D-25 (see footnote 46); No. 13-D-06 of 28 February 2013 concerning practices implemented in the sector of online transmission of tax and accounting data in electronic data interchange format to the tax administration, upheld by the Paris Court of Appeal on 26 February 2015 and by the French Supreme Court on 8 February 2017; No. 15-15.005; No. 13-D-11 (see footnote 86); No. 13-D-20 (see footnote 117); No. 13-D-21 (see footnote 87); No. 14-D-02 of 20 February 2014 concerning practices implemented in the sports press sector, upheld by the Paris Court of Appeal on 15 May 2015 and by the French Supreme Court on 1 March 2017; No. 15-19.068; No. 14-D-05 of 13 June 2014 concerning practices implemented in the mobile telephony sector for residential customers in Réunion Island and Mayotte; No. 14-D-06 (see footnote 80); No. 14-D-08 of 24 July 2014 concerning practices implemented in the sector for the sale of fresh dairy products in the French West Indies (the Paris Court of Appeal reduced the amount of the fine on 24 September 2015); No. 15-D-01 of 5 February 2015 concerning practices implemented in the deployment of DTT broadcasting contracts in French overseas territories; No. 15-D-10 (see footnote 62); No. 15-D-17 of 30 November 2015 concerning practices implemented on the mobile telephony market for non-residential customers in Réunion Island and Mayotte; No. 15-D-20 (see footnote 105); No. 16-D-11 (see footnote 67); No. 16-D-14 of 23 June 2016 concerning practices implemented in the rolled zinc sector (the Paris Court of Appeal reduced the amount of the fine on 17 May 2018; an appeal is pending before the French Supreme Court); No. 17-D-02 (see footnote 96); No. 17-D-06 (see footnote 60); No. 17-D-13 of 27 July 2017 of 27 July 2017 concerning practices implemented in the funeral sector in the Ain department; No. 17-D-25 (see footnote 88; the Paris Court of Appeal reduced the amount of the fine on 11 July 2019; an appeal is pending before the French Supreme Court); No. 18-D-03 (see footnote 24); No. 18-D-17 (see footnote 102; the Paris Court of Appeal quashed the FCA decision; an appeal is pending before the French Supreme Court); and No. 19-D-26 (see footnote 22; an appeal is pending before the Paris Court of Appeal); No 20-D-04 (see footnote 4, an appeal is pending before the Paris Court of Appeal); and No. 20-D-11 (see footnote 4, an appeal is pending before the Paris Court of Appeal).
123 FCA Decision No. 15-D-20, see footnote 105.
124 See for instance, FCA Decisions No. 15-D-10 (see footnote 62), No. 15-D-20 (see footnote 105); No. 17-D-02 (see footnote 96); No. 17-D-06 (see footnote 60); No. 17-D-13 (see footnote 122); No. 18-D-03 (see footnote 24) and No. 19-D-26 (see footnote 22).
125 FCA Decision No. 19-D-26, see footnote 22.
126 In Decision No. 20-D-04 (see footnote 4), the FCA imposed its highest ever fine of €1.1 billion on an individual player (Apple); however, this was for a series of practices that included an abuse of a situation of economic dependence, as well as two vertical anticompetitive agreements within its distribution network. The portion of the fine attributable to the abuse of economic dependence is €218.3 million.
127 FCA Decisions No. 10-MC-01 (see footnote 22); No. 11-MC-01 (see footnote 68); No. 14-MC-01 of 30 July 2014 concerning practices in the pay TV sector, partially quashed by Paris Court of Appeal on 9 October 2014; No. 14-MC-02 of 9 September 2014 in the gas and electricity sector, partially quashed by Paris Court of Appeal on 31 October 2014 (see footnote 78); No. 16-MC-01 of 2 May 2016 on a request for interim measures filed by Direct Energie, upheld by Paris Court of Appeal on 28 July 2016; No. 19-MC-01 of 31 January 2019 on the request by Amadeus for interim measures (partially quashed by Paris Court of Appeal on 4 April 2019) and No. 20-MC-01 (see footnote 8).
128 FCA Decision No. 12-D-25, see footnote 46.
129 See footnote 46.
130 FCA Decision No. 12-D-25, see footnote 46.
131 FCA Decision No. 14-D-06, see footnote 80.
132 FCA Decision No. 19-D-26, see footnote 22.
133 FCA Decision No. 02-D-44, see footnote 32.
134 FCA Decision No. 20-D-01, see footnote 7.
135 FCA Decision No. 20-D-06, see footnote 5.
136 FCA Decision No. 20-D-07, see footnote 4.
137 FCA Decision No. 14-D-04, see footnote 4.
138 FCA Decision No. 19-MC-01, see footnote 127.
139 FCA Decision No. 19-MC-01, see footnote 127.
140 Paris Court of Appeal, 4 April 2019, Amadeus.
141 FCA Decision No. 20-D-14 of 26 October 2020, see footnote 7.
142 FCA Decision No. 19-D-26, see footnote 22.
143 Decision 20-MC-01, see footnote 8.
144 Paris Court of Appeal, 8 October 2020, see footnote 14.
145 FCA press release of 23 December 2020, 'The Autorité de la concurrence announces its priorities for 2021' available on the FCA's website: http://www.autoritedelaconcurrence.fr/fr/communiques-de-presse/apres-une-activite-tres-soutenue-en-2020-lautorite-de-la-concurrence-annonce.
146 See Notice of 2 March 2009 on the commitment procedure.
147 See Notice of 21 December 2018 on the settlement procedure. The FCA is bound by its provisions.
148 FCA Decision No. 15-D-20, see footnote 105.
149 FCA Decision No. 17-D-02, see footnote 96.
150 FCA Decision No. 17-D-06, see footnote 60.
151 Law No. 2016-1691 of 9 December 2016 (Article 148); Order No. 2017-303 of 9 March 2017 on damages actions relating to anticompetitive practices; and Decree No. 2017-305 of 9 March 2017 on damages actions relating to anticompetitive practices.
152 Paris Commercial Court, 16 March 2015, Outremer Telecom v. Orange.
153 FCA Decision No. 09-D-36 of 9 December 2009 concerning practices in the mobile telephony sector in the Antilles and Guyana, ultimately confirmed by the French Supreme Court on 6 January 2015, Nos. 13-21.305 and 13-22.477.
154 Paris Court of Appeal, 10 May 2017, Outremer Telecom v. Orange.
155 Paris Commercial Court, 18 December 2017, Digicel v. Orange.
156 Paris Court of Appeal, 17 June 2020, Orange v. Digicel.
157 Paris Court of First Instance, 22 February 2018, Betclic v. PMU.
158 FCA Decision No. 14-D-04, see footnote 4.
159 Paris Court of Appeal, 12 September 2018, Betclic v. PMU. This judgment was upheld by the French Supreme Court on 14 October 2020, Case No. 18-24.221.
160 Paris Court of Appeal, 6 March 2019, Arkeos, which relates to FCA Decision No. 09-MC-01 of 8 April 2009 concerning a complaint and request for interim measures of Solaire Direct and FCA Decision No. 13-D-20 (see footnote 117). See also, French Administrative Supreme Court, 22 November 2019 where the Court considered that the five-year period started on the date of the FCA Decision No. 12-D-25 (see footnote 46).
161 Paris Commercial Court, 1 October 2019, CNAMTS v. Sanofi, which relates to FCA Decision No. 13-D-11, see footnote 86.
162 Paris Commercial Court, 30 January 2012.
163 Paris Court of Appeal, 25 November 2015, see footnote 50.
164 FCA Opinion No. 14-A-18; see footnote 51.
165 French Supreme Court, 12 April 2016, No. 14-26.815.
166 Paris Commercial Court, 12 February 2014, SFR v. Orange.
167 Paris Court of Appeal, 4 October 2014, SFR v. Orange.
168 French Supreme Court, 12 April 2016, No. 14-26.815.
169 Paris Court of Appeal, 8 June 2018, SFR v. Orange.
170 French Supreme Court, 16 September 2020, Orange v. SFR.
171 Paris Commercial Court, 10 February 2021, Google v. Oxone. An appeal is pending before the Paris Court of Appeal.
172 FCA Decision No. 19-D-26, see footnote 22.
173 Paris Court of Appeal, 13 March 2019, Avi Charente v. Lactalis.
174 Paris Court of Appeal, 19 December 2018, Inforad v. Coyote.
175 Law No. 2016-1691 of 9 December 2016 (Article 148); Order No. 2017-303 of 9 March 2017 on damages actions relating to anticompetitive practices; and Decree No. 2017-305 of 9 March 2017 on damages actions relating to anticompetitive practices.
176 FCA press release of 23 December 2020, see footnote 145.
177 FCA Opinion No. 21-A-05 of 29 April 2021 on the sector of new technologies applied to payment activities.
178 FCA's contribution to the debate on competition policy in the digital sector of 19 February 2020, available on the FCA's website: http://www.autoritedelaconcurrence.fr/en/press-release/autorite-publishes-its-contribution-debate-competition-policy-and-challenges-raised.
179 FCA press release of 23 December 2020, see footnote 145.
180 In early 2021, the FCA dismissed this request for interim measures but decided to further investigate the merits of the case; FCA Decision No. 21-D-07, see footnote 10.
181 See French Law No. 2020-1508 of 3 December 2020 containing various provisions to adapt French law to European Union law in economic and financial matters, Article 37.
182 FCA Decisions Nos. 19-MC-01 (see footnote 127) and 20-MC-01 (see footnote 8).
183 FCA's contribution to the debate on competition policy in the digital sector of 19 February 2020 (see footnote 178).