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New Developments in French Competition Law Pose Risk of Ex-Post Challenge to Non-Notifiable Transactions
Wednesday, June 5, 2024

In a significant development for French merger control, on May 2, 2024 the French Competition Authority applied the jurisprudence laid down in the recent Towercast case to an alleged anti-competitive agreement matter in the meat-cutting sector.

In its Towercast ruling (C-449/21), the Court of Justice of the European Union (CJEU) held that a merger which is not notifiable i.e. being below the European and national merger control thresholds, and which has not been subject to a referral under Article 22 of the Merger Regulation 139/2004 of 2004 (EUMR), may be challenged a posteriori by the European Commission or a national competition authority (NCA) if an abuse of dominant position, resulting from the merger but detachable from it, can be established.

Less than a week after the Towercast ruling, the Belgian Competition Authority applied the principles set out by the CJEU by opening an ex officio investigation into the acquisition of the edpnet group by Proximus, ordering interim measures in June 2023 to ensure the continuity of edpnet’s activities and its operational and commercial independence from Proximus, ultimately leading to the sale of edpnet’s activities post-closing in November 2023. The President of the FCA, Benoît Cœuré, said that this instrument could “now be used, bearing in mind that its conditions of use are restrictive[1]”. This has now been confirmed by the FCA’s decision issued on May 2, on which he immediately commented, stating that it was an “important clarification for merger control”, particularly regarding Article 101 TFEU.*


In the current case in question, France’s three leading groups in the meat-cutting sector had signed several cross-divestitures of business assets in June 2015. As the merger control thresholds set out in Article L.430-1 of the French Commercial Code had not been exceeded, these transactions were not notified to the FCA under the merger control procedure.

Nonetheless, the FCA’s investigation services initiated proceedings not on the basis of an alleged abuse of dominant position but on Articles 101 TFEU and L. 420-1 of the French Commercial Code, and sent out a statement of objections to these three groups, alleging they had agreed to divide up the market geographically, in particular by organizing meetings and exchanging information beforehand, and then carrying out the divestiture of the businesses in question.

In its decision no. 24-D-05, the FCA firstly considered that the information provided in the case did not establish the existence of an agreement to implement a global plan for the geographical allocation of the meat-cutting markets in France. According to the FCA, the discussions between the parties involved in the merger were strictly in preparation for the merger.

Secondly, the FCA confirmed that the signing of the divestiture agreements established the existence of an agreement to carry out the mergers. The FCA examined whether the mergers in question, when considered independently, would likely violate Articles 101 TFEU and L. 420-1 of the French Commercial Code by forming an anti-competitive agreement. This analysis was completed using the Towercast established case law in a novel manner.

On this issue, the FCA considered that, in view of the content and the economic and legal context surrounding the case, the divestiture agreements did not have an anti-competitive purpose, and that the evidence available was not sufficient to analyze the effects of these transactions on the market concerned.

Consequently, the FCA dismissed the claims brought by its investigation services.

The FCA’s decision, which clearly sets a precedent, comes not long after Advocate General Nicholas Emiliou’s noteworthy opinion in the Illumina/Grail case, pending before the CJEU. In this opinion, published at the end of March 2024, the Advocate General considered that “The General Court erred in its interpretation and application of Article 22 EUMR. Under a proper construction, that provision does not empower the Commission to adopt decisions such as those challenged by the appellants in the present proceedings. Those decisions should, thus, be annulled.” If this position were to be followed by the CJEU, the European Commission would no longer be competent to review, on referral from NCAs, mergers that are not notifiable under national law.

Yet the FCA had shown great support for the use of Article 22, congratulating the European Commission in a press release dated September 15, 2020, on its announcement that it would take on this new competence through a new interpretation of Article 22, previously construed as allowing Member States without merger control law to refer to the European Commission. On March 9, 2021, in the case of Illumina’s proposed acquisition of sole control of Grail, the FCA submitted a request for the examination of the transaction to be referred to the Commission under Article 22. Since then, the FCA has used this EUMR provision in the Autotalks/Qualcomm case in July 2023.

In this context, if the FCA should not be able to refer a case to the European Commission on the basis of Article 22, supposing the CJEU were to endorse the position recently expressed by its Advocate General, the decision n°24-D-05 it has just issued sends a strong and clear message to companies: the FCA will not hesitate to examine ex post any merger which is not notifiable in France, but which may give rise to an abuse of a dominant position (e.g. Towercast) or even an anticompetitive agreement, and to draw all the legal consequences.

This message is even more powerful given that the FCA is not the only enforcement agency in France to ensure that the Towercast ruling is applied. Decision no. 24-D-05 was initiated after the French General Directorate for Competition Policy, Consumer Affairs and Fraud Control (DGCCRF) forwarded evidence relating to the meat-cutting sector, basis on which the FCA carried out dawn raids.

Moreover, decision no. 24-D-05 will unquestionably lead companies to consider, when drafting their corporate documentation (in particular acquisition agreements), how to best organize the completion of their transactions that do not require prior authorization under merger control, and to anticipate this new legal risk of their agreements being challenged a posteriori – a risk that is now tangible, as the FCA’s decision teaches us.

*Trainee Victoire Sipp contributed to this article


[1]Option Droit & Affaires #651, November 2, 2023.

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