The European Antitrust Review 2014 • Section 3: Country chapters
France: Competition Authority
The Authority has been busy on all fronts in the first half of 2013, building on its track record as a nimble, effective and pragmatic agency which nonetheless adheres to high standards of analysis and reasoning. The decisions and opinions that have been handed down so far, as well as the inquiries that were launched, all testify to our aim of achieving an efficient competitive level playing field: with this objective in mind, the Authority does not hesitate to combine the different levers at its disposal to build a comprehensive competition policy. The pharmaceutical sector, which we focused on this year, is but one example of this approach. Alongside enforcement and advocacy, the Authority is also continuously involved in updating, where required, its guidelines – most recently in the field of merger control – and contributes positively to current legislative efforts aimed at developing private enforcement in France through collective redress mechanisms. The Authority welcomes in particular the emphasis placed on follow-on actions in the bill being discussed in Parliament, thereby giving private litigants the full benefit of public enforcement.
A broad array of sectors
The Authority has maintained a high level of antitrust enforcement so far in 2013, whether through fining or negotiated procedures, while sowing the seeds, through its advocacy efforts, for future reforms (by lawmakers) or actions (by compliance-orientated firms) to preserve competition on the merits.
In the pharmaceutical sector, the Authority has taken the unprecedented step in Europe of fining a pharmaceutical company, Sanofi-Aventis, for having implemented a denigrating strategy against generics of its blockbuster medicine – in this case, Plavix – thereby deterring doctors and pharmacists from allowing the generic substitution of the patent medicine. The public health insurance system estimates its lost savings in the area of €38 million. The Authority may build on this precedent in two other pending investigations.
The Authority’s anti-cartel activity also focuses on intermediary goods and industrial inputs. A recent illustration is the decision of 29 May 2013 whereby the Authority fined Brenntag, Caldic Est, Univar and Solvadis a total of €79 million for having colluded in the market for the distribution of commodity chemicals, raw materials used in a large number of sectors (chemical, agro-food, automobile industry, etc). This decision also gave us the opportunity to provide certain clarifications on the scope and content of our leniency programme.
In the banking sector, the Authority continues its systematic overview of the different payment instruments and seeks to obtain results in particular through the negotiation of commitments. After having obtained, in 2011, the banks’ commitment to significantly reduce the interbank fees applicable to card transactions and cash withdrawals under the dominant domestic Cartes Bancaires scheme, it has recently wrapped up a market test of commitments submitted by Visa and MasterCard to reduce, by up to nearly 40 per cent, the MIFs which they currently apply for domestic transactions. The scope differs from current proceedings before the Commission, where essentially cross-border transactions are at stake, bearing in mind that today over 95 per cent of payment card transactions in Europe are domestic.
In the advocacy field the functioning of network industries, where issues pertaining inter alia to barriers to entry and access or sharing of infrastructure stand out, has also called for the Authority’s scrutiny. Two landmark opinions were issued in early 2013 as regards, respectively, the sale of natural gas and mobile network-sharing agreements.
With respect to the sale of natural gas, the Authority underlined the adverse effects that regulated tariffs, and their erratic implementation by public authorities, have had on new entries in a market which is fully open to competition, at least in theory, since 1 July 2007. In effect, these regulated tariffs, by attracting media attention every time they were adjusted, reinforced consumers’ impression that there is no alternative to the market incumbent exclusively entrusted with the sale of gas at regulated tariffs. Moreover, the discrepancy between the tariff and supply costs, linked to multiple government-imposed freezes on tariff adjustments, dissuaded new entrants from investing, in the absence of even a short-term outlook on the level of French gas prices. As a consequence, switching to alternative suppliers is limited even as their offers are competitive. Accordingly, the Authority has called for a progressive phasing out of regulated tariffs: the government has already responded by announcing that it would remove such tariffs for most professional users.
As regards the assessment of network-sharing agreements between mobile network operators (MNOs), the Authority emphasised three main criteria, namely the degree of cooperation between the parties to the agreement (which depends on the nature of the infrastructure shared); the market power thus acquired by the MNOs that are party to the agreement; and the density of the area covered by the agreement, sparsely populated areas generating greater efficiency gains than urban areas. The Authority also looked at national roaming agreements and warned that, while they lower barriers for new entrant MNOs pending the full deployment of their networks, in the long run they also weaken infrastructure-based (and quality-based) competition and create a market imbalance to the benefit of the parties to the roaming agreement. Consequently, it suggested an operational schedule for terminating the current agreement between the new entrant and the incumbent operator.
The launch of new inquiries
Building on the momentum of its enforcement activity in the pharmaceutical sector, last February the Authority launched a sector inquiry into the sale of medicinal products, looking at the production, wholesale and retail distribution levels. The inquiry’s aim is to identify areas where competition may be spurred to the benefit of all, thereby complementing the topics touched by the Commission’s 2009 sector inquiry. A public consultation will be launched this summer.
The Authority will also be conducting a sector inquiry into interregional coach transport services, where pro-competitive factors (significant lowering of regulatory barriers) coexist with potential hurdles to competitive dynamics including, but not only, the advantages that multimodal companies, such as the national rail incumbent, hold.
Stepping up our merger control framework
The Authority’s merger guidelines, first published in 2009, are going through the final stages of a revision process initiated in February with a public consultation. Innovations include two new model texts on divestiture commitments and trustee mandates, developments on quantitative screening tools (UPP, GUPPI, etc) as well as references to the Authority’s decisional practice of the past four years, especially as regards bidding markets and local markets. Meanwhile, our intense caseload is being rolled out efficiently, with important decisions expected soon, eg, in the food distribution sector (Casino/Monoprix).
Next Chapter: France: Abuse of Dominance