France: Competition Authority

In summary

The Authority sanctioned two large cartels and decided two landmark abuse cases against Google and Apple. It was active on the mergers front as well with some major cases. It also contributed to the debate on how merger control should adapt to the digital economy by issuing proposals for reform. Finally, the Authority was very much active in its advocacy efforts, especially regarding the digital economy. Among other initiatives, it recently issued a policy paper on the challenges posed by the digital economy to feed the reflection of possible reforms at the European and global levels, and published a joint study on algorithms with Germany’s Federal Cartel Office. These efforts have been accompanied by the creation within the Authority of a new digital economy unit.

Discussion points

• Creation of a Digital Economy Unit
• Policy paper on Competition policy and digital challenges
• G7 Common Understanding on Competition and the Digital Economy
• Joint study on algorithms and competition
• Behavioural remedies, Les Essentiels
• Guide on Competition for SMEs

Referenced in this article

• Decision 20-MC-01 of 9 April 2020: interim measures against Google
• Decision of 16 March 2020: sanction against Apple and others
• Decision 19-D-26 of 19 December 2019: sanction against Google

The French Competition Authority (the Authority) has continued to move forward at a sustained pace in 2019 and the first quarter of 2020. It has maintained its unabated willingness to generate tangible results for consumers and a strong resolve to make use of the full spectrum of its powers and capacities as both a credible enforcer and a persuasive advocate. The combined use of various prerogatives – such as imposing fines and injunctions on infringers; making commitments binding upon firms whose behaviour has raised competition concerns; devising well-suited remedies to allow a merger to proceed; issuing opinions to assess the effects on competition of draft or existing pieces of legislation; and sector inquiries to better understand how markets operate – enables the Authority to be respected by public and private stakeholders alike as a determined watchdog and trusted adviser, to make the most of its procedural toolbox and to enhance its own expertise, ultimately in the best interests of sound competition enforcement.

The digital economy was one of the sectoral priorities for 2019 and remains at the centre of the Authority’s activity in 2020. A welcome development in this area has been the creation in January 2020 of a digital economy unit within the investigation services of the Authority.¹

The Authority’s robust enforcement in 2019 was reflected in a number of noticeable cases. It imposed a fine of nearly €415 million against the four historical issuers of meal vouchers in the country.² They had exchanged confidential commercial information on their market shares and had agreed to lock their market by controlling the entry of new players and banning the launch of dematerialised vouchers. This case is distinguished by the scale of the practices sanctioned, which affect an important sector of the economy, and the nature of those practices, in particular insofar as they were aimed at hindering the development of technical progress, with dematerialised vouchers, a modality benefiting the consumer.

The Authority also sanctioned a national cartel between the main manufacturers of fruit compote, who had entered into an illicit agreement both on products sold to retailers under retailers’ own-brand labels and products meant for ‘out-of-home catering’.³

The Authority additionally took a proactive stance in a dominance case (in December 2019) whereby it handed down a €150 million fine against Google and ordered that it clarify Google Ads’ operating rules and the procedure for suspending an account.⁴ It was found that the firm had abused its dominant position in the search advertising market by adopting Google Ads operating rules that were opaque and difficult to understand, so that Google had all the discretion to interpret these rules in a discriminatory or inconsistent manner.

In March 2020, the Authority sanctioned Apple €1.1 billion for collusion and abuse of economic dependence.⁵ Apple had implemented three anticompetitive practices within its distribution network of electronic products (excluding iPhones): an allocation of products and customers between its two wholesalers; selling prices imposed on its premium resellers; and an abuse of economic dependence on its premium resellers.

Merger control has also been an area of continued strong engagement. The Authority came to identify a wholly new market, that of services in connection with the monetisation of influence, when it reviewed the takeover of a producer and distributor of audiovisual programmes by a leading player in the ‘influencers’ industry’⁶ that supports, among others, the three French YouTube accounts that have the largest numbers of subscribers. In a key transaction in the audiovisual sector referred to the Authority by the European Commission, the Authority cleared under conditions the creation of the Salto joint venture between three television channels.⁷

On the policy side, eager to ensure the constant effectiveness of its merger review, the Authority implemented several measures following a series of public consultations: the reduction of the volume of information requested during the notification stage; the expansion of the use of the simplified (fast-track) procedure; and the creation of a new online-only declaration system. The Authority also launched a more general revision of its merger control guidelines, and contributed to the wider debate on how merger control should adapt to the digital economy. The Authority advocated for the introduction of a new type of ex post control for below-threshold mergers, and the introduction of a mandatory reporting mechanism on acquisitions by dominant or systemic players.

On a procedural level, the year 2019 was also marked by the use of additional tools such as interim measures and injunctions. Following a complaint from an operator of a telephone directory service, the Authority ordered interim measures (in January 2019) against Google to clarify its Google Ads rules, to review the procedure for suspending the accounts of advertisers and to develop compliance programmes.⁸ In a separate case (in December 2019, as mentioned above) when Google was fined €150 million, the Authority also imposed injunctions against the firm regarding the operating rules of its advertising platform, Google Ads. In early April 2020, in a matter relating to press content ancillary rights, the Authority also issued interim measures. Following a complaint, the Authority found that Google may have abused its dominant position in the market for general search services by imposing unfair transaction conditions on publishers and news agencies. Google was ordered to negotiate with those publishers and news agencies that request it, the remuneration due to them for any use of protected content, following transparent, objective and non-discriminatory criteria.

Alongside its active enforcement efforts, the Authority has vigorously pursued its advocacy activities. It issued an opinion on the competition challenges in the broadcasting sector to advise Parliament on the reform of the sector.⁹ An ex officio sector inquiry was also conducted into the healthcare sector, the findings of which supported the development and modernisation of pharmacies and biomedical laboratories.¹⁰ The Authority also took a number of advocacy initiatives that contributed to moving forward current thinking and soft law regarding the digital economy by cooperating with other competition agencies¹¹ and other national regulators (joint study on digital vocal assistants and joint paper on data-driven regulation), and by issuing in February 2020 a policy paper that contributes to the debate at both European and global levels on competition policy in the face of the challenges posed by the development of the digital economy.¹²

At the international level, the Authority led an initiative that resulted in the adoption of the ‘Common Understanding on Competition and the Digital Economy’ in June 2019 by all the competition authorities of the G7 countries (Canada, France, Germany, Italy, Japan, United Kingdom, United States) and the European Commission.¹³

Finally, in January 2020, the Authority published the second edition of its new book collection on behavioural remedies, The Essentials (the aim of which is to improve compliance and to disseminate essential notions of competition law),¹⁴ and a guide to help small and medium-sized enterprises better understand the competition rules.15

Notes