The Public Competition Enforcement Review: France

Overview

The French Competition Authority (FCA) is the administrative body in charge of enforcing European and domestic competition rules in France. In 2021, it issued 28 contentious decisions, of which 14 imposed fines amounting to an aggregate €870 million. This total shows a significant decrease compared with 2020 (€1.8 billion) but remains high compared with previous years (€630 million in 2019, €240 million in 2018); therefore 2020 qualifies as a record year in terms of sanctions. Of the 14 decisions imposing fines in the past year:

  1. seven sanctioned cartels and anticompetitive agreements, under Article L 420-1 of the French Code of Commerce or Article 101 of the Treaty on the Functioning of the European Union (TFEU);
  2. two sanctioned an abuse of a dominant position, under Article L 420-2 of the French Code of Commerce and Article 102 of the TFEU;
  3. one sanctioned unjustified exclusive rights for imports to the French overseas territories, under Article L 420-2-1 of the French Code of Commerce;
  4. one sanctioned non-compliance with injunctions, under Article L 464-3 of the French Code of Commerce; and
  5. three sanctioned obstructive practices, under Article L 464-2, V of the French Code of Commerce.

As to merger control measures, the FCA issued 269 decisions in 2021, which included 261 decisions clearing the notified transaction, seven decisions authorising the notified transaction subject to compliance with commitments, and one decision blocking the notified transaction (a decision issued in the pipeline hydrocarbons transportations sector).2

The year 2019 marked the 10-year anniversary of the FCA, created in March 2009 to replace the former French Competition Council (FCC). The 2008 Law on Modernisation of the Economy, which had set up the new institution, entrusted the FCA with the power to review mergers, a prerogative that had previously lain with the French Ministry for the Economy and Finance. This Law also vastly increased the FCA's investigative powers compared with those of the former FCC, and allowed it to take up any competition matter and issue an opinion, on its own initiative. On the occasion of this anniversary, the FCA carried out an assessment of its impact on the French economy and calculated that its action over 10 years had resulted in a total gain of nearly €14 billion, including €9.5 billion in avoided costs and €4.5 billion in fines collected. In 2021, although the amount of fines issued was lower than in 2020, the FCA maintained a high level of activity, imposing fines totalling nearly €870 million.

As regards the institution of the FCA itself, new appointments were made in 2021. Among these, Lucile Fournereau was named deputy head of the Regulated Professions Unit, Stanislas Martin was reappointed General Rapporteur, Elodie Vandenhende was appointed deputy head of the Digital Economy Unit, Mathias Pigeat was appointed head of the Legal Department, Bertrand Rohmer was appointed chief of staff of the Office of the President and Directorate of European and International Affairs, Ivan Luben was appointed ethics adviser for the FCA, Erwann Kerguelen was appointed Deputy General Rapporteur and Frédéric Fustier was appointed deputy to the Chief Economist of the FCA.

As in 2020, in 2021, the FCA maintained particular attention towards the digital sector, the retail sector and competition in overseas territories. This year, the FCA was also interested in new emerging subjects, such as the impact of the digital revolution on the financial sector, the extent of concentration in the contemporary music sector, and promoting compliance more broadly. These and other relevant developments from 2021 are discussed below.

Cartels

The enforcement of Article L 420-1 of the French Code of Commerce and Article 101 of the TFEU, which prohibit anticompetitive practices and cartels, is one of the prime missions of the FCA. In 2021, the FCA issued seven decisions that could be classified as relating to 'cartels' (even though the enforcer now rarely uses that terminology), fining a total of 22 undertakings an aggregate amount of €153.5 million. This figure shows a significant decrease compared with previous years (€479 million in 2019, €205 million in 2018), but, at the same time, a considerable increase compared with 2020 (€93.4 million). Tackling cartels remains one of the FCA's priority when allocating resources, which explains this high number of cartel decisions (the latter broadly including, for the purpose of this chapter, resale price maintenance practices, namely vertical agreements on price levels).

i Significant cases

In March 2021, the FCA fined the three main French industrial manufacturers of sandwiches for a cartel in the retail sector for own-brand-label sandwiches for mass retail distribution.3 In the case at hand, the cartel was formed in the context of responses to calls for tender issued for mass retail distribution. More precisely, the three companies concluded a 'non-aggression pact' to put an end to what they described as a 'price war'. In practice, they each emailed their draft prices to their competitors before responding to calls for tender from mass-market retailers. The companies then called each other to discuss prices and adjusted their offers before responding to the retailers. These practices were brought to light thanks to the leniency procedure, which allows companies involved in anticompetitive practices to disclose their existence to the FCA and benefit, under certain conditions, from full or partial exemption from a fine. When determining the level of the fines, the FCA took into account the seriousness of the practices, their duration and stability, the financial difficulties faced by one company, and the leniency applications. In this context, the FCA imposed fines totalling €24.6 million.

In a notable decision in June 2021, the FCA dismissed the Kärcher pricing policy case.4 The FCA had started proceedings for a suspected two-year cartel between Kärcher and its distributors. However, in its decision, the FCA noted that although Kärcher gave its distributors recommended resale prices, nothing in the case made it possible to establish that Kärcher had forced its distributors to implement these. In particular, although Kärcher salespeople regularly visited its distributors' points of sale to discuss elements of sales policy, and would sometimes ask for information about the retail prices charged, it was not established that the purpose of these visits was to monitor prices. In light of these considerations, the FCA dismissed the case, which is rather unusual as far as cartels are concerned.

In July, the FCA fined several eyewear brands and manufacturers for imposing retail prices and online sales restrictions.5 Several companies imposed retail prices on opticians. The FCA considered these practices to be anticompetitive by their very nature, and thus serious, particularly as they involved the use of monitoring and retaliation mechanisms. Other companies banned opticians from selling their sunglasses and spectacle frames online. The FCA considered these practices had 'a certain degree of severity', as they had the effect of depriving opticians and final consumers of a sales channel generally characterised by competitive prices. However, it mitigated their severity in light of the uncertainty that existed as to their lawfulness until the European Court of Justice (ECJ) Pierre Fabre decision of 13 October 2011. Furthermore, the FCA considered that the damage to the economy caused by these practices was 'very limited', because of the limited growth in internet sales, at least for spectacle frames. In light of these elements, the FCA imposed fines amounting to €125.8 million.

In November, the FCA fined video surveillance manufacturer Mobotix and its wholesalers.6 In this case, the FCA considered that Mobotix communicated to its wholesalers and on its website lists of recommended resale prices. To ensure that the retail prices displayed by the resellers–installers were homogeneous and identical to the advertised resale prices, Mobotix used a set of clauses in its contracts with its wholesalers requiring them (1) not to communicate any prices other than the recommended resale prices, and (2) to ensure that the retailers complied with these prices. According to the FCA, Mobotix then turned recommended resale prices into fixed prices. Moreover, Mobotix's contracts with three of its wholesalers contained a set of clauses requiring them to select only retailers that did not market the majority of their products online. In its decision, the FCA stated that these practices were to be considered 'relatively serious', in that they contributed both to ensuring stable margins at all levels of the value chain and to limiting online sales of these products. In view of these facts, the FCA imposed fines amounting to €1.4 million.

As for the courts, this year saw a new ruling by the Paris Court of Appeal in the Endive growers case. Originally, the FCA issued a decision in 2012 fining endive growers and several of their professional bodies €4 million for having maintained minimum prices by various means for 14 years.7 In a first ruling, the Paris Court of Appeal overturned the FCA's decision, finding that, under EU law, it was not proved that, by regulating prices, these organisations went beyond the limits of the legal duty imposed on them by the general framework of the EU Common Agricultural Policy (CAP) (i.e., to manage the supply of agricultural products adequately). In addition, the Paris Court held that the articulation of competition law in relation to the CAP framework was uncertain at the time of the ruling.8 This year, following the ECJ's preliminary ruling in the case9 and the subsequent referral ordered by the French Supreme Court in 2018,10 the Paris Court of Appeal issue its second ruling, finding that because the complex issue of the articulation of competition law and the CAP framework had remained uncertain until the 2017 clarification provided by the ECJ, the amount of the fines needed to be drastically reduced, and this was then divided by three.

ii Trends, developments and strategies

Facing the accelerated digitisation of economy

This year, the FCA and the Digital Regulation Expertise Centre (PEReN) concluded an agreement whereby PEReN will provide the FCA with technical assistance in the digital sector. PEReN will then intervene in matters regarding data analysis, source codes, computer programs, algorithmic processing and auditing in the context of merger reviews, antitrust investigations or studies related to digital platforms. This assistance may include the appointment of PEReN staff as external FCA rapporteurs. Thanks to this contract, in 2021, the FCA put in place the technical means to effectively address the challenges raised by the digital economy.

Sanctioning local cartels

Since 2008, the Minister for the Economy and Finance (the Minister) has had the power to issue injunctions and reach settlements in the case of local anticompetitive practices. If a company rejects a settlement or fails to comply with injunctions, the Minister then refers the case to the FCA. In this context, it is noteworthy that the FCA sanctioned local practices in two cases within the building industry sector this year.11

Revision of the fines procedural notice

This year, the FCA published a new procedural notice explaining the method for determining the amount of fines. This replaces the FCA's 2011 notice and draws the consequences of the new applicable statutory provisions resulting from the transposition of the ECN+ Directive (see Section II.iii).12 In addition to these adjustments, the FCA made a number of additional changes based on the evolution of both its own decisional practice and that of the European Commission, and the case law of the review courts since 2011. This notice is thus an important further step towards the convergence of competition rules, by promoting a consistent determination of fines by the FCA and the European Commission.

iii Outlook

ECN+ Directive transposition

Ordinance No. 2021-649 of 26 May 2021 on the transposition of the ECN+ Directive was adopted this year. This new legal framework gives the FCA the means to apply competition law more effectively and provides it with powerful new tools adapted to the challenges raised by digital platforms. This is the result of the authorisation to transpose the ECN+ Directive granted by the DDADUE ordinance of 3 December 2020,13 allowing greater efficiency and uniformity in the application of competition rules within the EU market. It remains to be seen how exactly the FCA will, in practice, implement its new powers.

Litigation investigations

Several litigation investigations were initiated this year in a number of sectors, including the collection and use of pharmaceutical data, the manufacture and retail of foodstuffs in contact with materials that may contain (or may have contained) bisphenol A or its substitutes, food retail, and short sea cross-Channel freight shipping.

Antitrust: restrictive agreements and dominance

The FCA's antitrust enforcement activity, other than cartel enforcement, covers restrictive agreements under Article L 420-1 of the French Code of Commerce or Article 101 of the TFEU, and abuse of dominance under Article L 420-2 of the French Code of Commerce or Article 102 of the TFEU. In addition, the FCA is also in charge of sanctioning unjustified exclusive imports in the French overseas territories.

i Significant cases

In June, the FCA handed out a €220 million fine to Google for favouring its own services in the online advertising sector.14 In this case, the FCA considered that Google granted preferential treatment to its own technologies both with regard to the operation of the DFP ad server (which allows publishers of websites and applications to sell their advertising space) and its SSP AdX sales platform (which organises the auction process allowing publishers to sell their advertising inventories to advertisers) to the detriment of its competitors and publishers. According to the FCA, these practices were 'particularly serious' as they penalised both Google's competitors in the SSP market and publishers of mobile sites and applications. In the case at hand, Google did not dispute the facts and benefited from the settlement procedure. Google then proposed commitments consisting in (1) improving the interoperability of Google Ad Manager services with third-party ad server and advertising space sales platform solutions, and (2) ending the provisions favouring Google. These commitments were accepted and made binding by the FCA in its infringement decision.

In September, the FCA fined several participants in the road freight transport sector for boycotting digital intermediation platforms.15 In this specific boycott case, the FCA found that these road freight transport stakeholders hindered the arrival and development of new digital stakeholders offering services related to the performance or optimisation of transport management. According to the FCA, those fined had agreed to boycott, and to call on their members to boycott, both the new digital intermediation platforms and software that could optimise the performance of transport transactions by using a tracing method. Although the FCA considered these practices to be 'serious', it nevertheless took into account the fact that the damage to the economy remained contained. In view of these considerations, the FCA imposed fines amounting to €500,000.

In November, the FCA fined the sugar and molasses producer Tereos Océan Indien (TOI) for abusing its dominant position on the La Réunion molasses market.16 In this case, TOI was found to have inserted two provisions into its contracts limiting distilleries' ability to withdraw from their contractual relationship: (1) the first clause set a financial compensation charge of €5 million for a distillery wishing to terminate the contract; and (2) the second limited the distilleries' ability to resell molasses on the La Réunion market. The FCA made two findings in this particular case: (1) the amount of the financial penalty was excessive and thus likely to discourage distilleries from renegotiating the contractual terms; and (2) the provision prohibiting distilleries from reselling molasses on the La Réunion market excessively limited the potential markets for the distilleries. In its decision, the FCA considered these practices to be 'very serious', as they made the contract 'quasi-perpetual' and involved significant market share. In calculating the fine, however, the FCA took into account the limited damage to the economy and imposed a fine of €750,000.

As for the courts, 2021 saw a new ruling of the Paris Court of Appeal in the Exchange Cheques–Image Fee case. Originally, the FCA issued a decision in 2010, fining 11 French banks €384.9 million for having charged unjustified interbank fees during the transition towards a new digital system for processing cheques.17 In a first ruling, the Paris Court of Appeal took the position that the FCA's finding of restriction by object was not justified.18 Following a referral ordered by the Supreme Court in 2015,19 the Paris Court issued a second ruling, dated 21 December 2017, but making a reverse finding. According to the Parisian judges, the fee was indeed an anticompetitive agreement by object (i.e., a breach, without any need to assess its concrete effects on the market).20 Consequently, the question whether the introduction of this fee met the criteria of a restriction by object was then brought before the Supreme Court, which, in 2020, overturned the Paris Court of Appeal ruling, rejecting the presumption of an anticompetitive effect, on the grounds that there was no experience of this type of fee. Furthermore, the Supreme Court strongly recalled the principle of restrictive interpretation of the concept of restriction of competition by object.21 In 2021, following a second referral from the Supreme Court, the Paris Court of Appeal overturned the FCA's initial decision more than 10 years after its issuance, finding that it had not been established that the introduction of the fees had the object or the effect of distorting competition.22

ii Trends, developments and strategies

Multiple rejections of interim measures requests

In 2021, the FCA rejected multiple requests for urgent interim measures. One request submitted by Plüm Energie sought interim measures against EDF,23 whose prices would have been predatory and would have constituted an abuse of a dominant position, according to Plüm. The FCA also rejected a request submitted by several associations representing various participants in the online advertising sector contesting Apple's introduction of the mandatory App Tracking Transparency (ATT) framework for applications on its iOS 14 operating system.24 In this case, according to the complainants, by requiring iOS applications to comply with the ATT feature, Apple would be abusing its dominant position by imposing (1) unfair trading conditions, and (2) undue additional obligations on application developers. In both of these cases, the FCA rejected the requests, stating that it was not possible to take a position regarding a potential infringement at this stage, and that it was pursuing its investigations into the merits of the cases.25

Sanctioning obstructive practices

The year 2021 was marked by an increased stringency in the FCA's enforcement in cases of obstructive practices, with no less than three infringement decisions issued in this area: in the Fleury Michon,26 Nixon27 and Nel Group cases.28 In each case, the FCA emphasised that companies under investigation are subject to an obligation of active and genuine cooperation, which implies that they must provide the investigating services with any information and evidence requested. The failure of a company to respond to the investigation services is likely to constitute obstructive practices, which may be fined by the FCA under Article L 464-2 of the French Code of Commerce.

iii Outlook

Antitrust and 'structuring' digital platforms

In its contribution to the debate on competition policy and the challenges raised by the digital economy, published on 24 February 2020, the FCA observed that certain behaviours implemented by large digital operators (such as discrimination against competing products or services, foreclosure of related markets, use of data on a dominated market to impede access, hampering interoperability between products or services or 'multihoming') were unlikely to be caught under the current standard of abuse of dominance. It is thus exploring the adoption of a new regime to prevent and sanction anticompetitive behaviours by these operators, which would entail creating a legal definition of 'structuring firms' and submitting them to a specific set of enforceable obligations in terms of interoperability, non-discrimination and access to data.

Sectoral competition: market investigations and regulated industries

i Significant cases

Covid-19 crisis and cinemas

In April 2021, with the exacerbation of the phenomenon of cinema-screen congestion as a result of the periods of closure or reduced access to cinemas in 2020 and 2021 related to the covid-19 health crisis, the FCA was asked by the Cinema Mediator to give an opinion on the possibility of agreements between film distributors aimed at temporarily setting up a regulated film-release schedule until a return to a normal situation. In an effort to promote compliance, the FCA released an opinion setting out the framework of what would be possible and what would be prohibited in this specific context.

Fintech sector inquiry

Also in April 2021, the FCA issued its opinion as regards the fintech sector. In this report, the FCA assessed the competition landscape in the sector of new technologies applied to payment activities. In substance, the FCA found that technological innovation and changes in regulations had enabled the arrival in the payment sector of new participants, fintech and big tech companies and, alongside traditional banking participants, these new companies developed innovative payment methods for consumers and new diversified services. As to potential competition issues, the FCA underlined the existence of competition risks linked to (1) the strengthening of the large digital platforms' market power, (2) consumers becoming locked into a particular ecosystem, and (3) the marginalisation, over time, of traditional banking participants.

Interim measures requests and regulated professions

In June 2021, the FCA rejected the request for interim measures submitted by Notariat Services regarding the alleged practices of ADSN Group in the notarial property advertising sector.29 In this case, Notariat Services was accusing ADSN Group (which manages the Immobilier.notaires.fr portal on behalf of the Conseil Supérieur du Notariat) of having implemented a global strategy aimed at eliminating it from the markets for running advertisements on notarial property sites, and for multicasting to sites not specialising in notarial property advertisements. However, in the case at hand, the FCA considered that the request did not meet the 'urgency criteria' and decided to continue its investigation into the merits of the case.

Telecoms sector

In December 2021, following a referral by the Electronic Communications, Postal and Print Media Distribution Regulatory Authority (Arcep), the FCA issued its opinion on the upcoming launch of the round of ex ante regulation of the upstream wholesale market for digital terrestrial television broadcasting services for the 2022–2026 period. In this context, the FCA noted that this new regulatory cycle is based solely on commitments proposed by the TDF Group telecommunications company, instead of the regulatory obligations previously imposed by Arcep. In addition, the FCA found that the proposed commitments contained certain concessions that appeared difficult to justify in the absence of an improvement in the competition landscape. Thus, the FCA expressed strong reservations about these envisaged provisions.

Competition in Corsica

Also in December 2021, the FCA announced it had opened an investigation into alleged practices in the fuel products supply, storage and distribution sector in Corsica. The FCA specified that this decision to start proceedings followed an investigation carried out by its investigative services in the same area in recent months. This scrutiny over competition in Corsica is not new, as the FCA previously examined the functioning of competition in this territory in 2020.30

ii Trends, developments and strategies

Promoting compliance

In 2021, to mark new provisions coming into force that expose professional bodies to heavier and more dissuasive sanctions, and as part of an approach aimed at promoting compliance, the FCA published a study dealing with the application of competition law to these stakeholders. Previously in France, the total fine imposed upon a business association could not exceed €3 million. However, following transposition of the ECN+ Directive, the cap on fines incurred has been increased to 10 per cent of the total turnover of member companies of these professional bodies. Consequently such bodies and their member companies are now exposed to very heavy fines in the event of an infringement. In an effort to promote compliance, the FCA decided to support this change by dedicating a study to professional bodies to raise awareness and prevent any antitrust risk.

iii Outlook

Digital regulation

The FCA will continue to actively participate in discussions led at the EU level on digital regulation, in particular those regarding the Digital Markets Act (DMA) and the Digital Services Act (DSA), which will define a new regulatory framework applicable to digital platforms. In this respect, in June 2021, the European Competition Network (ECN) published a joint paper by the heads of the national competition authorities regarding the DMA proposal. In November, the FCA also participated in the work of the G7 competition authorities chaired by the United Kingdom. In this context, it took part in the preparation of the 'Compendium of approaches to improving competition in digital markets' published by the UK Competition and Markets Authority.

Compliance programmes

In October 2021, the FCA opened a public consultation with a view to publishing a new framework document on competition compliance programmes. Furthermore, the FCA decided to update the framework document on competition compliance programmes initially published in 2012 and subsequently withdrawn following the reform of the settlement procedure. In substance, this new framework document will include three parts respectively dedicated to (1) the benefits of compliance programmes, (2) the components of such programmes, and (3) compliance stakeholders. This new framework document should be adopted over the course of 2022.

State aid

State-aid rules are enforced at the EU level by the European Commission (EC) and the ECJ. In 2021, the EC made 70 decisions on measures implemented by France (none of which were negative decisions ordering recovery).

This year, one major legal change needs to be noted as regards state-aid control. In July, the EC extended the scope of the General Block Exemption Regulation to allow Member States to implement certain state-aid measures without prior examination by the EC.31 In summary, the revised rules concern aid granted by national public authorities to projects financed under certain programmes managed centrally by the EU under the new multi-annual financial framework, and also certain state-aid measures supporting the ecological and digital transition and with relevance for the recovery from the economic effects of the covid-19 crisis. As for prospective legal changes, in October, the EC published a draft revised General Block Exemption Regulation applicable to state-aid control, with the objective of promoting the contribution of public funding to current EU priorities, including the Green Pact and the European Industrial and Digital Strategy, and to ensure that state-aid rules take into account the latest market and technological developments.

Merger review

In 2021, the FCA issued 269 merger review decisions under Articles L 430-1 to L 430-10 of the French Code of Commerce, which shows a significant increase in transactional activity compared with previous years (196 decisions in 2020, 269 in 2019, 235 in 2018). Of these, 268 were Phase I clearance decisions, of which seven were granted subject to commitments and none were subject to injunctions.

i Significant cases

In 2021, for the second time ever, the FCA blocked a merger.32 In its decision issued in May, the FCA blocked the acquisition of Société du Pipeline Méditerranée-Rhône, active in the pipeline transport of hydrocarbons, by Ardian group, which is notably active in the transport, telecommunications and renewable energy sectors. In the case at hand, the FCA carried out an in-depth examination of the transaction involving the takeover of the Pipeline Méditerranée-Rhône, a 760km pipeline network supplying depots in south-eastern France with refined products. Concretely, this transaction would have had the effect of giving Ardian sole market power over the pipeline, thus making it the sole trade policy maker. The FCA qualified this pipeline as an 'essential facility' and considered the proposed commitments to be insufficient. Further, as it was impossible to issue injunctions, the FCA thus blocked the proposed transaction.

In April, subject to conditions, the FCA cleared the acquisition of the Ronsard Group by the LDC Group.33 In this case, the parties were active at various levels of the poultry industry: (1) upstream, as purchasers on the market for the collection of live poultry for slaughter, (2) downstream, as sellers on the market for the marketing of poultry meat and processed poultry meat products, and (3) regarding only the Ronsard Group, as a provider of live poultry slaughtering services for third parties in the Morbihan region. In this case, the FCA identified competition issues in the Ain and Morbihan regions. This decision is quite interesting as regards the kinds of commitments proposed to address the competition risks identified in Morbihan: for the first time ever, the FCA accepted as sufficient a commitment that the group controlling the target company would remain the owner of the infrastructure whose change of ownership had raised competition issues, thereby eliminating any risk of reduced access to this infrastructure (in the case at hand, a slaughterhouse).

In August 2021, the FCA cleared the acquisition of joint control of Miniburo, a company offering co-working spaces in the Île-de-France region, by the Deposits and Consignments Fund and Nexity.34 The decision in this case is particularly noteworthy because the FCA assessed for the first time ever the potential existence of a market for the provision of co-working spaces. After carrying out market tests with sector stakeholders, the FCA concluded that the provision of shared workspaces of this kind was different from all other activities in the property sector. In brief, the FCA considered that this activity included all the services relating to the provision of workspaces on a one-off or recurring basis for individual or self-employed workers or companies that were not covered by long-term office rentals. This decision is a prime example of the fact that the FCA is regularly called upon to refine its decision-making practice, sometimes by addressing new and innovative markets.35

In September, in the same vein, the FCA cleared the acquisition of 100 Bio c' Bon stores by Carrefour subject to commitments.36 This transaction followed the opening of judicial liquidation proceedings before the Paris Commercial Court on behalf of Bio c' Bon Group. As a consequence, the FCA granted a derogation allowing Carrefour Group to proceed with the acquisition without waiting for the final FCA approval decision. This decision is rather unprecedented insofar as for the first time, the FCA recognised the existence of a market for organic food products, thus clearly stating that organic food products and non-organic food products were not substitutable. In its decision, the FCA identified two new separate markets: (1) a market for the supply of organic food products; and (2) a market for their distribution. As regards the substantive competition analysis, and as is customary in the field of horizontal mergers raising competition issues, the FCA required a structural remedy from Carrefour consisting in the divestment of eight stores.

ii Trends, developments and strategies

Catching killer acquisitions

For several years, the FCA has been campaigning for a remedy to what it considered a loophole in national and EU merger control. It was indeed possible for acquisitions with a potentially serious impact on competition dynamics to escape all control when the target company's turnover did not reach the mandatory notification thresholds, including when the target was purchased for a considerable amount, as in the Facebook/WhatsApp transaction. The EC responded favourably to this call, announcing in 2020 that henceforth it would revert to its past doctrine and would accept referrals by national competition authorities of mergers 'below the thresholds', within the framework set out by Article 22 of the 2004 EC Merger Regulation.37 In 2021, the EC adopted guidelines to clarify its new approach in this respect38 and also decided to open an investigation into the transaction for Illumina's acquisition of Grail, following the referral request submitted by the FCA, which was joined by several other EEA Member States (i.e., Belgium, Greece, Iceland, the Netherlands and Norway). This was the first application of Margrethe Vestager's new interpretation of Article 22 of the Merger Regulation (whereby the EC will examine a contemplated merger that was not submitted to a mandatory notification under national merger control thresholds).39

Cooperation with foreign competition authorities

This year, pursuant to Article 4, Paragraph 4 of the Merger Regulation, the EC referred the review of several mergers to the FCA, namely (1) the acquisition of Suez RV OSIS by SARP (a subsidiary of Veolia), (2) Michelin's acquisition of Allopneus and (3) Maxi Toys French stores takeover by Prenatal alongside Fijace, as it considered the FCA to be best placed to examine the proposed transactions in view of their impact on the French national market and the FCA's experience in this sector. These referrals are prime illustrations of the flexibility of the EU merger control system. Moreover, this year, as permitted under Article 22 of EU procedural Regulation No. 1/2003, the FCA provided assistance to the Greek competition authority in investigating alleged practices of the Nixon Group, whose EU headquarters were located in France, thus proving that international cooperation between antitrust authorities is at the core of the FCA's activity.

Concentration and contemporary music sector

In May, the FCA issued its opinion on the contemporary music sector. In this regard, the FCA noted that this sector recently underwent significant changes. These structuring evolutions mainly stem from two causes: (1) on the one hand, a trend for traditional purveyors of recorded music and live entertainment to diversify into other professions within the sector, and (2) on the other hand, the arrival of international operators into the live entertainment sector in France. In addition to these various structural changes, live entertainment has been particularly affected by the covid-19 health crisis, with closures of performance halls and the cancellation of festivals and concerts. According to the FCA, this crisis could lead to other upheavals in the sector, such as 'consolidation transactions'. The FCA, however, stated that, within the framework of its ex ante powers in the area of merger control or its ex post intervention powers, it had the tools to allow it to address the level of concentration in the sector and to put an end to any anticompetitive practices, if necessary.

iii Outlook

Upcoming decisions

As to 2022's prospects, 17 operations were under review at the time of writing, six of which pertain to the food retail sector, two to the automobile retail sector, two to the furniture products retail sector and two to the press sector. One in-depth investigation (also known as a Phase II investigation) is currently ongoing in respect of the takeover of Conforama France by the Mobilux Group (BUT) following the EC's referral decision issued in 2020.40

Temperature-controlled goods transport sector

This year, as part of the review of a proposed merger in which the companies [email protected] (jointly controlled by STEF and SATAR Investissement) and Olano planned to acquire joint control of the TMF group, the FCA opened a public consultation on the temperature-controlled goods transport sector insofar as all these parties are active in this sector. This market test will allow the FCA to develop its decision-making practice and to define relevant markets in close collaboration with market participants, and the results should be published in the course of 2022.

Conclusions

At the time of writing, the FCA has yet to unveil its priorities for 2022. However, the digital sector is anticipated to remain one of the FCA's core points of interest this year, with a particular focus on digital regulations at EU level, namely the DMA and DSA, both of which are currently being debated by the EU Parliament, the EC and the EU Council in the framework of 'trilogue negotiations'. In addition, by concluding an agreement whereby PEReN will provide technical assistance to help the FCA realise its objectives, the latter proved again this year that it is making efforts to tackle the accelerated digitisation of the economy.

Moreover, in light of the cases currently under investigation and the merger transactions currently under review, the food retail sector will most probably be a key point of focus for the FCA in 2022. In this regard, in October 2021, the FCA publicly announced that it had stated objections to 101 companies and 14 professional organisations active in the manufacture and retail of foodstuffs in contact with materials that may contain or may have contained bisphenol A or its substitutes. In this case, the General Rapporteur of the FCA indicated that the implicated entities were suspected of having agreed not to communicate the presence or composition of certain materials in contact with food, to the detriment of consumers. This investigative act does not, however, prejudge the guilt of the entities that received the statement of objections. Only an investigation conducted with due regard for the defence rights of the parties concerned will enable the board to determine, after an oral hearing, whether the objections are well founded. This year, while investigating the bisphenol A case, the FCA will also review numerous mergers contemplated in the food retail sector.

Finally, the FCA will continue to promote corporate compliance initiatives and the modernisation and strengthening of intervention tools (in particular, the transposition of the ECN+ Directive and the option to refer acquisitions made below the thresholds to the EC for examination; for example, in the case of predatory or consolidating acquisitions). More than ever, it will also focus on international cooperation between national competition authorities, in particular as regards the accelerated digitisation of the economy.41

Footnotes

1 Olivier Billard and Igor Simic are partners at Bredin Prat. This chapter was written in collaboration with Quentin Colombier, an associate at Bredin Prat.

2 For the second time ever, the FCA blocked a merger in its Decision No. 21-DCC-79 of 12 May 2021 regarding the acquisition of exclusive control of Société du Pipeline Méditerranée-Rhône by Transport Stockage Énergies.

3 FCA, Decision No. 21-D-09 of 24 March 2021 regarding practices implemented in the market segment for the manufacture and marketing of retailers' own-brand-label sandwiches.

4 FCA, Decision No. 21-D-14 of 24 June 2021 regarding practices implemented in the do-it-yourself products distribution sector.

5 FCA, Decision No. 21-D-20 of 22 July 2021 regarding practices implemented in the spectacles and spectacle frames sector.

6 FCA, Decision No. 21-D-26 of 8 November 2021 regarding practices implemented in the Mobotix brand products distribution network.

7 FCA, Decision No. 12-D-08 of 6 March 2012 regarding practices in the endive growing and marketing sector.

8 Paris Court of Appeal, 15 May 2014, RG 2012/06498.

9 European Court of Justice, 14 November 2017, No. C-671/15.

10 French Supreme Court, 12 September 2018, No. 14-19.589.

11 FCA, Decision No. 21-D-05 of 4 March 2021 regarding practices implemented in the building management systems sector for the city of Lille, and Decision No. 21-D-06 of 11 March 2021 regarding practices implemented in the tobacconist security provision sector in the Pays de la Loire and Nouvelle Aquitaine regions.

12 Directive (EU) 2019/1 of the European Parliament and of the Council of 11 December 2018 to empower the competition authorities of the Member States to be more effective enforcers and to ensure the proper functioning of the internal market.

13 Law No. 2020-1508 of 3 December 2020 on various provisions for adaptation to European Union law in economic and financial matters.

14 FCA, Decision No. 21-D-11 of 7 June 2021 regarding practices implemented in the online advertising sector.

15 FCA, Decision No. 21-D-21 of 9 September 2021 regarding practices implemented in the road freight transport sector.

16 FCA, Decision No. 21-D-25 of 2 November 2021 regarding practices implemented in the molasses supply sector in La Réunion.

17 FCA, Decision No. 10-D-28 of 20 September 2010 on prices and associated conditions applied by banks and financial institutions for processing cheques submitted for encashment purposes.

18 Paris Court of Appeal, 23 February 2012, RG 2010/20555.

19 French Supreme Court, 14 April 2015, No. 12-15.971.

20 Paris Court of Appeal, 21 December 2017, RG 2015/17638.

21 French Supreme Court, 29 January 2020, Nos. 18-10.967 and 18-11.001.

22 Paris Court of Appeal, 2 December 2021, RG 20/04626.

23 FCA, Decision No. 21-D-03 of 18 February 2021 regarding a request for interim measures submitted by Plüm Energie in the French electricity supply sector.

24 FCA, Decision No. 21-D-07 of 17 March 2021 regarding a request for interim measures presented by Interactive Advertising Bureau France, Mobile Marketing Association France, Union Des Entreprises de Conseil et Achat Media and Syndicat des Régies Internet associations in the market segment of mobile applications advertising on iOS.

25 For another interim measures request rejection, see also the Notariat Services case discussed below, in Section IV, on sectoral competition.

26 FCA, Decision No. 21-D-10 of 3 May 2021 regarding obstructive practices implemented by Fleury Michon group.

27 FCA, Decision No. 21-D-16 of 9 July 2021 regarding obstructive practices implemented by Nixon.

28 FCA, Decision No. 21-D-28 of 9 December 2021 regarding obstructive practices implemented by Mayotte Channel Gateway SAS.

29 FCA, Decision No. 21-D-15 of 24 June 2021 regarding a request for interim measures submitted by Notariat Services in the notarial property advertising sector.

30 FCA, Opinion No. 20-A-11 of 17 November 2020 on the level of market concentration in Corsica and its impact on local competition.

31 EC Regulation No. 2021/1237 of 23 July 2021 amending EU Regulation No. 651/2014 declaring certain categories of aid compatible with the internal market in application of Articles 107 and 108 of the TFEU.

32 FCA, Decision No. 21-DCC-79 of 12 May 2021 regarding the acquisition of exclusive control of Société du Pipeline Méditerranée-Rhône by Transport Stockage Énergies.

33 FCA, Decision No. 21-DCC-65 of 14 April 2021 regarding the acquisition of the Ronsard Group by the LDC Volaille company.

34 FCA, Decision No. 21-DCC-147 of 30 August 2021 regarding the acquisition of joint control of Miniburo by the Deposits and Consignments Fund and Nexity.

35 See also, for another example of a new and innovative market examined by the FCA this year, FCA, Decision No. 21-DCC-172 of 1 October 2021 regarding the creation of a joint venture by AGI, EDF PEI, Genak and SAFO companies, in which the FCA studied the electric-vehicle charging station market.

36 FCA, Decision No. 21-DCC-161 of 10 September 2021 regarding the acquisition of exclusive control of certain activities of Bio c' Bon group by Carrefour France.

37 Council Regulation (EC) No. 139/2004 of 20 January 2004 on the control of concentrations between undertakings (the EC Merger Regulation).

38 EC Guidance of 26 March 2021 on the application of the referral mechanism set out in Article 22 of the Merger Regulation to certain categories of cases.

39 This referral of the Illumina/Grail transaction is currently being challenged before the European General Court (case T-227/21).

40 See FCA, press release of 29 June 2020, The European Commission just referred the acquisition of Conforama France by Mobilux (But) to the FCA.

41 See, in particular, the joint paper published in June by the European Competition Network addressing the issue of the involvement of national competition authorities in the Digital Markets Act, and the 'Compendium of approaches to improving competition in digital markets' published by the G7 competition authorities following the discussions led by the UK presidency on the subject of competition in digital markets.

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