Between filing and the final decision of the Authority, the notifying parties may submit amendments to the transaction to remedy competition issues. The parties may put forward various remedies (behavioural as well as structural), such as commitments to sell assets to third parties (those third parties should then be approved by the Authority), to execute a contract (eg, a trademark or patent licence), to amend conditions of sale, to keep the Authority informed of any change in the structure of the relevant market (such as an increase in the parties’ market share) or even sometimes to freeze their market share.
The Authority can delay the concentration until the commitments are fulfilled. In the case of a divestment commitment, the parties may be required to prepare an equally or more effective alternative solution (‘crown jewels’), where the initial divestment turns out to be either unlikely or impossible.
The Guidelines introduced a standard form of divesture commitments and a standard form of trustee mandate to habilitate a trustee to monitor and audit fulfilment of the commitments.
A few recent cases illustrating the possible scope of remedies in France are set out below.
In Altice (Numericable)/SFR (2014), the Authority cleared, subject to commitments, the acquisition by Numericable of sole control of SFR, which was previously controlled by Vivendi. The merger reinforced Numericable’s leader position in the high-speed broadband sector. Among several commitments, Numericable committed to give to telecommunication network operators such as Orange, Bouygues Télécom and Free (ie, the major French telecom operators) as well as MVNOs’ access to its cable network. Conditions for access are subject to the approval of the Authority so as to ensure their competitiveness. Numericable also committed not to provide strategic business information to Vivendi (Vivendi retaining a 20 per cent stake in Numericable Group) related to the markets in which the two groups are, or may be, in competition, such as pay TV markets. All commitments applied for five years, renewable once.
In UGI France/Totalgaz (2015), the Authority applied for the first time the ‘fix it first’ approach, which requires the notifying party, in the framework of its divestment commitment, to present an acquirer before any decision of the Authority. After having entered into, with its competitor Butagaz, a letter of intent under the terms of which Butagaz undertook to acquire certain assets, UGI requested the Authority to approve Butagaz as a suitable purchaser for these divested assets.
In 2015, the Rubis group acquired, pursuant to two separate transactions, the Société Anonyme de la Raffinerie des Antilles (SARA) and the Société Réunionnaise de Produits Pétroliers (SRPP), both active in the overseas oil sector (in different geographic markets though). Because of vertical foreclosure risks identified by the Authority, both clearances were subject to several remedies, including notably a commitment to give non-discriminatory access to marine and jet fuel storage capacities of SARA and SRPP respectively, at a cost-oriented price that includes a reasonable return on capital. In both cases, the remedies are taken for five years (renewable once), and their implementation will be monitored by an independent trustee approved by the Authority.
In Fnac/Darty (2016), following an in-depth investigation, the acquisition of Darty by Fnac was cleared by the Authority subject to the divestment of six stores, in order to remedy the lack of alternative for consumers, and to maintain sufficient competition in the market for retail distribution of electronic products in Paris and its suburbs. This was the first case in which the Authority has ever defined a relevant market as including both in-store and online retail channels. It held that competitive pressure exerted by online sales had become significant enough to be integrated in the relevant market, whether it comes from pure players or from the bricks and mortar stores’ own websites. As in the analysis carried out in Fnac/Darty, the Authority took into account in Sarenza/Monoprix (2018) and André/Spartoo (2018) the competition exerted by e-commerce players on the brick and mortar distributors, without concluding, however, that there was a single relevant market.
In Vinci/Aéroports de Lyon (2016), the Authority held that the vertical integration between a public works company and an airport management company would be harmful to competition in the absence of genuine competition in the context of calls for tender. Accordingly, Vinci undertook:
- to ensure greater transparency during the invitations to tender;
- to ensure a clear separation between members of the purchasing committee and the other Vinci group entities responding to invitations to tender; and
- to provide a list of the invitations to tender issued and of the successful bidders to a trustee.
These commitments were made binding until 2047 (ie, for the entire duration of the Lyon airport management and operating concession).
In Elsan/MediPôle Partenaires (2017), the Authority accepted alternative divestments (ie, the notifying party had to divest one healthcare facility it could choose among several identified in a given area, the divestment of any of them being able to solve the competitive concerns identified).
In La Poste/Suez (2017), the Authority cleared, subject to conditions, the creation of a full-function joint venture between La Poste and Suez. Interestingly, the commitments taken by the two merger parties for the creation of the joint-venture were similar to those made legally binding, on the same day, by the Authority to close an antitrust procedure involving La Poste in the same sector (collection and recovery of office non-hazardous waste). In both cases, the identified concerns involved a risk of use of La Poste’s competitive advantages linked to the universal postal service, that could not be reproduced by competitors, and issues around services possibly priced below cost. Similar behavioural commitments have been submitted in the two proceedings and, given the concomitance of the two cases, the Authority specifically ensured that the antitrust commitments would not be deprived of their effect as a result of the implementation of the merger.
In Bricorama/ITM Equipement de la Maison (2017), the Authority cleared the transaction following its initial examination, subject to commitments to divest five retail outlets, to terminate a franchise agreement, and to facilitate the negotiation of a new franchise agreement by a competing chain, as the new entity would have very high market shares in a number of areas, which could result in local price increases. Likewise, in the retail sector, the Authority cleared in 2017 the acquisition of stores owned by the Tati group by Gifi subject to the divestment of four stores and a behavioural commitment not to sell homeware and general merchandise at a given store for a renewable period of five years.
From May 2017 to May 2018, the Authority was fairly active in the field of commitments, with seven clearances subject to remedies. However, not all second-phase investigations ended in remedies, as shown by the Axel Springer/Concept Multimedia (2018) merger that was ultimately cleared without commitments.
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