France: changes and firsts for the FCA

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In summary

This article summarises the rules and procedures on merger control in France and provides an overview of recent developments and decisions.

Discussion points

  • Second decision of the French Competition Authority (FCA) prohibiting a merger, following the notification of the takeover by an investment fund of a pipeline considered to be an essential facility
  • Authorisation after a Phase II investigation of the takeover of Conforama by the But group, after application of the failing firm defence
  • Phase II investigation by the FCA of the TF1/M6 media groups merger
  • FCA’s decision to fine COFEPP for gun jumping during the acquisition of Marie Brizard
  • European Commission’s decision to refer the acquisition of sole control over McKesson Europe by the German group Phoenix to the FCA pursuant to article 9 of the European Merger Regulation (EUMR)

Referenced in this article

  • Articles L430-1 et seq of the Commercial Code
  • French Competition Authority
  • FCA merger control guidelines of 23 July 2020
  • FCA Decision No. 21-DCC-161 of 10 September 2021
  • FCA Decision No. 21-DCC-79 of 12 May 2021
  • FCA Decision No. 19-DCC-36 of 28 February 2019
  • FCA Decision No. 22-D-10 of 12 April 2022
  • Commission Decision M.10404 Phoenix/McKesson of 30 March 2022
  • FCA Decision No. 22-DCC-78 of 28 April 2022

The French merger control regime is governed by the provisions of Book IV of the Commercial Code (FCC), namely articles L430-1 to L430-10 and R430-2 to R 430-10, as last amended by Statute No. 2015-990 (the Macron Act). Since 2008, the French merger control process has been entrusted to the French Competition Authority (FCA), whose guidelines on merger control were updated in 2020. [1]

Presentation of the French Competition Authority

The FCA is an independent administrative authority. It comprises Investigative Services under the leadership of the Head of Investigative Services and a Board in charge of making the final decisions on the cases investigated by the Investigative Services.

Since 2008, the FCA has been in charge of the enforcement of both French and European antitrust provisions (articles 101 and 102 of the Treaty on the Functioning of the European Union (TFEU) and articles L420-1 and L420-2 of the FCC) and the implementation of the French merger control regime under article L430-1 et seq of the FCC. The FCA enjoys wide investigative powers for the enforcement of both French and European competition rules.

The FCA also has an advisory role in issuing opinions on its own initiative or at the request of bodies in charge of representing public interests: the government, Parliament, local authorities and professional or consumer organisations.

Within the FCA, the merger control unit is part of Investigative Services under the authority of a Deputy Head of Investigative Services. The FCA also includes an economics team, led by the Chief Economist, who is in charge, among other things, of conducting economic analyses to assess the effects of concentrations in the relevant markets.

Merger control procedure

Scope of the merger control

Merger control is within the exclusive competence of the FCA; however, pursuant to article L430- 7-1 of the FCC, the Minister of the Economy may, upon receiving a merger control decision from the FCA, ultimately decide whether purely public interest considerations, including, for example, industrial development and employment in France, outweigh the competition concerns raised by the concentration.

This provision has been very rarely used, the Minister of the Economy having since 2009 only overturned one decision of the FCA based on that provision (in 2018, the Minister ultimately decided to authorise the acquisition by Cofigéo of Agripole’s assets in the agrifood business without any of the divestitures previously required by the FCA, but subject only to a commitment to maintain jobs at its June 2018 level for two years). [2]

Pursuant to article L430-1 of the FCC, the French merger control regime covers mergers, acquisitions of control and full-function joint ventures. The full-functionality criteria applied by the FCA are similar to those of the European Commission (the Commission).

Pursuant to article L430-2 of the FCC, concentrations within the meaning of article L430-1 are considered reportable in France, provided they meet three cumulative thresholds:

  • the global aggregate turnover of the merging parties (or the groups to which they belong) is above €150 million;
  • the total turnover in France of at least two of the merging parties is above €50 million; and
  • the transaction does not meet the European merger control thresholds.

Special thresholds apply for cases in which at least two of the parties to the merger operate retail stores or when at least one of the merging parties operates in an overseas French territory.

Following the issuance of the Commission’s Guidance on the application of the referral mechanism set out in article 22 of the European Merger Regulation (EUMR) to certain categories of cases, dated 26 March 2021, concentrations that do not meet the above-mentioned criteria but nevertheless threaten to significantly affect competition within the French territory can be referred by the FCA to the Commission for review.

This new interpretation of article 22 of the EUMR aims at capturing potential ‘killer acquisitions’, namely acquisition of a start-up, particularly an innovative target, or one holding competitively sensitive assets, such as data, IP rights, raw materials or infrastructure, by incumbents to kill or delay innovation, especially in the digital and pharmaceutical sectors. The FCA has consistently indicated its willingness to use this new tool and has already referred its first case to the Commission (see the Illumina/Grail case). [3]

Merger notification procedure

Notification is mandatory for all concentrations that meet the thresholds. For concentrations that do not meet the thresholds but could be subject to a referral under article 22 of the EUMR, the merging parties may voluntarily come forward with information about their intended transaction to get guidance from the FCA or the Commission regarding the likelihood of a referral.

For reportable mergers, the notification file, which is the responsibility of the acquiring party, must include descriptions of the concentration and the undertakings concerned, a definition of the relevant product and geographic markets and the market shares of the parties and their main competitors.

The notification file was streamlined by a decree dated 18 April 2019, notably in respect of the financial data to be provided to the FCA. Whereas companies previously had to submit complete information on their accounts, balance sheet and investments, they are now only required to provide their French, European and worldwide turnovers for the past three last years.

Since mid-2021, a new platform called ‘Hermes’ has been set up to allow for the dematerialised pre-notification and notification of concentrations. Although highly recommended, the use of the Hermes platform remains optional at this stage.

The notification process has a suspensive effect on the transaction, which cannot be closed prior to receiving the FCA’s authorisation. However, article L430-4 provides that the notifying parties may ask the FCA for an exemption allowing them to effectively complete all or part of the merger without waiting for its decision and without prejudice to the latter in case of necessity. [4]

The exemption to the suspensive effect of the notification of the concentration is void if, within three months of closing, the FCA has not received the complete notification. For mergers that are not reportable to the FCA but may be referred to the Commission pursuant to article 22 of the EUMR, the suspension obligation applies to the extent the concentration has not been implemented on the date on which the Commission informs the undertakings concerned that a referral request has been made.

Although theoretically not mandatory, the FCA effectively requires a pre-notification phase, which can last from two to three weeks in simple cases to several months in more complex ones. Pre-notification exchanges are generally confidential and usually aim at reaching a first agreement on market definition issues and identifying competition concerns that the transaction might raise according to the FCA.

Review of transactions by the FCA

If the operation does not raise any particular competition concerns, article L430-5 provides that a decision is made within 25 business days of the filing of a complete notification form (Phase I). The parties can offer commitments either together with the notification or within the 25-day period, in which case the Phase I period is extended by 15 business days. The parties can also request a suspension of the Phase I procedure to finalise the commitments or a suspension of the procedure for 15 days in other cases of necessity.

The Macron Act grants the FCA the possibility of stopping the clock at any time during the Phase I review period, if the parties have failed to inform the FCA of a relevant new fact or have failed to provide in due time all or a part of the information requested by the FCA, or if third parties have failed to provide requested information because of the actions of the notifying parties. There is no time limit for the suspension, which lasts until the FCA considers the notification complete again (ie, after submission of all necessary information).

Since January 2011, the FCA has implemented a simplified procedure aimed at speeding up the review of concentrations that are unlikely to raise competition concerns (such as operations in which the buyer and the target do not operate on the same or on linked markets, or certain operations in which at least two of the parties operate retail stores). In that procedure, the Phase I period can be reduced to 15 business days.

In the event of serious competitive concerns, the FCA will decide to open a Phase II investigation, during which a thorough examination of the contemplated merger is conducted. Pursuant to article L430-7 of the FCC, Phase II must be completed within 65 business days, unless commitments are offered by the parties within the last 20 days of the Phase II period, in which case the review period will be extended by 20 business days (starting from the date of reception of the commitments). Another 20-day period can be added if the parties or the FCA request to suspend the procedure. Taking into account the stop-the-clock period, the maximum duration of the examination under Phase II is, in theory, 105 days.

At the end of a Phase II investigation, the FCA can authorise the merger (possibly in view of the commitments proposed by the parties), prohibit it or impose conditions to ensure that the contribution of the merger to economic progress outweighs its anticompetitive effects.

Pursuant to article L430-8 of the FCC, if the FCA considers that the parties are failing to comply with their commitments or the injunctions imposed by it, it can:

  • withdraw the authorisation decision and, therefore, require a new notification and review of the merger;
  • order the undertaking to comply with the commitments; or
  • since 2015, substitute or add new injunctions to the initial commitments with which the parties failed to comply.

Notable developments and decisions from 2021 to 2022

Notable developments and cases from 2021 to 2022 include:

  • the second decision of the FCA prohibiting a merger, following the notification of the takeover by an investment fund of a pipeline considered to be an essential facility;
  • the authorisation after a Phase II investigation of the takeover of Conforama by the But group, in application of the failing firm defence;
  • the opening of a Phase II investigation by the FCA of the TF1/M6 media groups merger;
  • the FCA’s decision to fine Compagnie Financière Européenne de Prises de Participation (COFEPP) for gun jumping during the acquisition of Marie Brizard; and
  • the European Commission’s decision to refer the acquisition of sole control over McKesson Europe by the German group Phoenix to the FCA pursuant to article 9 EUMR.

Second prohibition decision of the FCA of a proposed acquisition of sole control of a pipeline considered to be an essential facility

On 12 May 2021, the FCA adopted its second ever prohibition decision [5] with regard to the acquisition of sole control by Transport Stockage Energie (TSE), a subsidiary of the Ardian group (Ardian), over the Société du Pipeline Méditerranée-Rhône (SPMR). Although there were no horizontal or vertical competition concerns, the FCA considered that the proposed transaction would restrict competition on the sole ground that, after the completion of the transaction, the investment fund would have enough influence on the target company to increase prices.

Prior to the transaction, the SPMR was not controlled within the meaning of merger control rules, as none of its shareholders (ie, Ardian (via TSE), Trapil, Esso, ENI and Thévenin-Ducrot Distribution) could exercise, either alone or jointly, a decisive influence over the company.

Ardian is an investment fund active in the development and management of infrastructure, including motorways, water distribution networks and renewable energies. Prior to the transaction, it already had joint control over a company providing hydrocarbon storage, Géosel-Manosque.

The SPMR owns the Mediterranean-Rhône Pipeline (PMR), a 760-kilometre-long pipeline network, which supplies the depots in south-eastern France with refined oil products: diesel gasoline, heating oil and jet fuel.

The notified transaction consisted of the purchase by Ardian of 5 per cent of the capital shares held by another shareholder, giving it control of the majority of the shares of the SPMR, and therefore sole control of the infrastructure.

The planned acquisition was notified on 14 September 2020, and on 8 December 2020 the FCA opened an in-depth investigation of the concentration.

Market definition

The FCA assessed the effects of the proposed transaction on:

  • the market for the transport of refined petroleum products by pipelines in the south of France. The FCA found that transport by pipeline was not a substitute for transport by train, riverboat or truck, in particular due to the differences in cost and volume offered by those means of transportation, the inherent logistical constraints of transport by rail or boat and the small distances covered by truck transport. Moreover, other means of transport do not offer the same guarantees as pipeline transport, particularly in terms of supply, safety and carbon dioxide emissions. The FCA considered that other existing oil pipelines did not exert sufficient competitive pressure on the PMR in the South of France, given their particular use (notably military) and their routes; and
  • the market for the storage of refined petroleum products, which is national for import depots and local (with a 150-kilometre-zone around a depot) as regards distribution depots.


On the market for the transport of refined petroleum products by pipelines in the South of France, the FCA considered that the PMR had a de facto monopoly because alternative modes of transportation do not exert enough competitive pressure.

The FCA further considered that the PMR could qualify as an essential facility that could not be duplicated by potential competitors, given that it could not be avoided by customers and considering the significant economic and regulatory barriers to market entry.

Anticompetitive effects of the proposed transaction

The FCA found that the proposed transaction could restrict competition on the markets concerned, even though it did not lead to any horizontal or vertical effects.

On the market for the transport of refined petroleum products by pipelines in the South of France, the transaction did not result in any detrimental horizontal effects, since Ardian is not active on this market.

Similarly, the FCA held that there were no vertical effects stemming from the fact that Ardian operates an upstream activity of petroleum storage through Géosel-Manosque, because of the specific activity of this company (long-term storage).

Despite this absence of horizontal or vertical impact, the FCA nevertheless considered that the proposed transaction could have detrimental effects on competition because of its very nature. It held that, as the SPMR was not controlled before the transaction, a necessary consensus among the shareholders contributed to limiting price increases and hence profit maximisation for the SPMR. However, this situation would have changed with the acquisition of sole control by Ardian, which would have been able to make unilateral decisions on the SPMR’s commercial and investment policy, with the objective of maximising its profits. This could have resulted in price increases and deterioration in the quality of the services offered by the company.

The fact that the state representative and the Minister for Energy currently oversee the operations of the SPMR, but mainly in relation to the national energy policy and requirements for the continuity of supply of petroleum products in France, does not exclude the risk that Ardian could, after the transaction, use the market power held by the SPMR on the market for the transport of refined petroleum products by pipelines in the South of France to maximise its profits or downgrade the SPMR offer by limiting investments to those that will make the PMR more profitable, to the detriment of quality.

Finally, the FCA considered that Ardian had not demonstrated that the notified transaction was likely to generate efficiencies that would outweigh its anticompetitive effects.

Commitments offered by Ardian

Ardian first submitted two commitment proposals that aimed at limiting its ability to take decisions on price increases (and price increases only), and at reinforcing the role of the state representative in relation to non-price decisions. The FCA considered that these measures were insufficient to address the competition concerns. First, the commitments did not allow for an alternative majority to emerge, which could oppose Ardian’s decisions as regards pricing decisions. Second, Ardian could still have used its decision-making power over non-price decisions as leverage on pricing decisions, to influence minority shareholders’ votes in its favour. Third, the implementation of the commitments depended on the action of a third party (ie, the state representative).

The third commitment package submitted by Ardian aimed at neutralising its control over SPMR until the adoption of a regulation that would remedy the competition concerns identified by the FCA. However, the authority rejected this proposal, noting, inter alia, that:

  • this commitment would defeat the purpose of the transaction and hence the FCA’s powers under merger control rules, as the clearance decision would be based on the hypothesis of a change of control, whereby in reality none would be implemented; and that
  • a commitment of unlimited duration, which could be assimilated to a form of sectoral regulation, raises issues of its own.

The FCA noted that, since the transaction was limited to the acquisition of sole control over the PMR, no structural injunction could be issued that would not block the transaction, and that a behavioural injunction would not be appropriate either, as only injunctions akin to control by a sectoral regulator could be effective in addressing the concerns generated by the potential behaviour of the new entity. However, the FCA considered that a behavioural injunction cannot lawfully take the place of a regulation establishing an ex ante sectoral control.

Since no appropriate remedy could be envisaged, the FCA decided to prohibit the transaction. An appeal against the decision is currently pending before the French Administrative Supreme Court.

Should the decision be affirmed by the Supreme Court, only time will tell whether the prohibition paves the way for similar findings in future cases of acquisitions by investment funds, or whether it is closely related to the sensitivity of the hydrocarbon infrastructure industry.

Application of the failing firm defence by the FCA

On 28 April 2022, the FCA cleared the acquisition of French retail chain Conforama, specialising in furniture and home appliances, by one of its main competitors, Mobilux (But retail chain), based on the failing firm defence. [6]

From a merger control perspective, the acquisition of control by But over Conforama offers many singularities: following a referral from the Commission to the FCA, a derogation to the standstill obligation was granted by the FCA to Mobilux (But’s parent company) given the financial difficulties faced by Conforama. For the same reason, and despite the competition risks identified, the authority cleared the transaction without commitments in a rare application of the failing firm defence.

The But group, under its parent company Mobilux, is active in the retail distribution of furniture, household electrical appliances, homeware and other products in France, through a network of 322 stores operated either directly or under the But franchise.

The Conforama group is also active in the retail distribution of furniture, household electrical appliances, home decoration and other products in France, through a network of 170 stores operated either directly or under the Conforama franchise.

Mobilux pre-notified its proposed takeover of Conforama to the European Commission in 2020. The Commission then decided to refer the case to the FCA at the request of the parties pursuant to article 4(4) in June 2020. The transaction was notified in France on 17 July 2020.

Because of the financial difficulties encountered by Conforama, Mobilux was granted a derogation to the standstill obligation, which allowed the group to complete the acquisition of Conforama without waiting for FCA clearance.

The FCA subsequently analysed the transaction and considered that it would give rise to the three main following competition concerns:

  • an increase in the new entity’s buying power, as more than half of the parties’ respective suppliers of bedding products will depend on the new entity for a substantial share of their turnover, putting them in a state of economic dependence. Moreover, alternatives for these suppliers’ output would be very limited;
  • since the parties to the transaction are the two main undertakings offering franchise contracts in the French oversea territories, the transaction will result in the disappearance of an alternative for franchisees in these areas, leading to a potential deterioration of their contractual conditions; and
  • finally, the FCA considered that some downstream markets for the retail distribution of furniture would be affected by the transaction. In this regard, the FCA departed from its precedents regarding market definitions for the distribution of furniture, segmenting the product market into six families of products, with further segmentation depending on prices. The FCA further considered, in line with its recent decision-making practice, the existence of a comprehensive market encompassing both online and offline distribution channels.

While Mobilux could not demonstrate any efficiencies that could offset these negative effects, its argumentation relied primarily on the failing firm defence, insisting on the serious financial difficulties experienced by Conforama. According to that exception, a competition authority may decide that an otherwise problematic merger is nevertheless compatible with competition law if one of the merging parties is failing and likely to disappear from the market, absent the concentration.

In its Seb/Moulinex decision, [7] the Supreme Court identified three cumulative criteria that must be met for the failing firm defence to be applicable:

  • in the absence of a takeover, the difficulties of the target company would lead to its disappearance from the market;
  • there is no other takeover offer that would be less damaging to competition; and
  • the elimination of the target company would not be less harmful to consumers than the planned transaction.

The FCA considered that these three criteria were met in the case. It confirmed that Conforama experienced serious financial difficulties and that there were no alternative offers to acquire the target, which would be less damaging to competition. The FCA also ensured, via a wide consultation of all market players, that the effects of Conforama’s disappearance would not be less damaging than its takeover by But, as the takeover would at least ensure that the diversity of the existing offer would be maintained. The FCA thus cleared the transaction. [8]

This case is the first time since 2009 that the FCA has agreed to apply the failing firm defence, due to the very strict assessment of the three cumulative criteria.

The opening of a Phase II investigation into the TF1/M6 merger

After a very long pre-notification phase, Bouygues notified the FCA of its proposed acquisition of Metropole Televisions (M6) on 17 February 2022. Despite the size of the two groups at the European level, the transaction is apparently reportable in France, and not to the European Commission – a legal point that will probably trigger significant discussions (and potentially litigation) once the FCA final decision is published.

Bouygues controls TF1, a media group that owns several free-to-air and pay-television channels. TF1 also offers video-on-demand services and is part of a joint venture with other television channels for the distribution of television services, including digital terrestrial television, catch-up TV, and subscription-based video-on-demand (Salto).

TF1 is also active in the audiovisual and film production industry, and owns several press outlets.

The Bouygues group, as a whole, is more broadly active in the telecommunications sector.

The Metropole Television group is controlled by Bertelsmann, which owns several television channels (free-to-air and pay-television channels), video-on-demand services and is also a member of the Salto joint venture.

M6 is also active in the audiovisual and film production industry, in advertising (M6 Publicités) and in the radio sector, where it owns the radio group RTL France, which operates three national radio channels.

Given the stakes at play for the transaction, the FCA conducted a wide consultation of the sector, including suppliers, competitors and customers in the markets for the acquisition of rights, the publishing and distribution of television services, and advertising.

At the end of its Phase I investigation, on 18 March 2022, the FCA decided to open an in-depth examination of the concentration (Phase II). [9] It intends to analyse the effects of the operation on the acquisition of broadcasting rights for audiovisual content, the publishing and marketing of television channels, the distribution of television services, and advertising, since those are all activities where the new entity would hold significant market power. In that context, the special committee of the Senate on the ‘Media concentration in France’ issued a report [10] on 29 March 2022, stating that the relative stability experienced by the media sector since the 2000s could be jeopardised by the proposed merger. Without leading to a reduction in the number of channels available, the merger would be likely to upset the already fragile economic balance of the industry by resulting in a dominant position of the new entity.

Interestingly, the FCA already consulted the Regulatory Authority for Electronic Communications, Posts and Press Distribution, but is also bound by law to consult the Audiovisual and Digital Communication Regulatory Authority in the course of the proceedings.

From a procedural perspective, it is worth noting that another media group, Iliad, attempted to challenge the process conducted by the FCA during the very heavy pre-notification phase. Iliad filed two requests before the Supreme Court. As a competitor, it argued that the obligation, under penalty of criminal sanctions, to already respond to a request for information and provide complete and accurate information to the FCA during the pre-notification phase was inconsistent with the rights and freedoms guaranteed by the Constitution; as a result, the FCA decision to open a pre-notification phase to investigate the case should be annulled as exceeding the FCA’s powers (ultra vires). Iliad also asked the Supreme Court to refer the question to the French Constitutional Council.

In response, the FCA, the Minister for Economic Affairs and Bouygues all argued that the request was inadmissible and that the conditions to refer a question to the Constitution Council were not fulfilled. The Supreme Court followed their reasoning and dismissed the request as inadmissible. It considered that the pre-notification phase is a purely informal, confidential and preparatory phase and, although the FCA’s agents may, provided the notifying party gives its approval, request information from third parties during a market test and impose penalties on those failing to answer, this decision cannot be challenged on the ground of misuse of powers. [11] Consequently, the Court ruled that there was no reason to refer the question to the Constitutional Council.

The Phase II investigation of the FCA is currently ongoing and should result in a final decision either in late 2022 or, more likely, early 2023.

The FCA fines COFEPP for gun-jumping

Gun jumping may arise in two situations: the failure to notify a concentration [12] and the violation of the parties’ standstill obligation during the review period by the FCA. [13] The COFEPP decision of 12 April 2022 is another example of the FCA’s stringent approach towards failures to notify. [14]

The FCA fined COFEPP €7 million for acquiring control of Marie Brizard Wine & Spirits before notifying the FCA of the concentration and without waiting for its clearance decision. [15]

COFEPP is a family-owned holding company for a group manufacturing and distributing spirits, wine, syrups and fruit juices.

Marie Brizard Wine & Spirits (MBWS) is also a manufacturer and distributor of spirits, wine and syrups.

On 3 January 2019, COFEPP notified its proposed acquisition of sole control over MBWS to the FCA. The notification followed a memorandum of understanding dated 21 December 2018, under which COFEPP undertook to subscribe to a capital increase of €37.7 million in MBWS, the result of which being that COFEPP would hold 47.08 per cent of the capital and 47.51 per cent of the voting rights in MBWS.

The FCA cleared the transaction on 28 February 2019, subject to commitments. [16] The deal was officially closed on 1 March 2019.

However, based on suspicions of gun jumping, the FCA’s investigation services conducted dawn raids at the premises of COFEPP and MBWS on 9 April 2019. [17]

Based on the data seized, the authority found that, before requesting and obtaining the required merger control clearance, COFEPP already exercised a decisive influence on MBWS. The FCA considered in particular the following evidence of decisive influence:

  • COFEPP’s significative share in MBWS’ capital;
  • COFEPP’s increasing role at the general assembly and board meetings of MBWS;
  • COFEPP’s access, through its representatives at the MBWS Board, to sensitive information about its competitor’s business;
  • contracts negotiated between COFEPP and MBWS for the supply of whisky and port wine, which enabled COFEPP to become a major supplier to MBWS in respect of these two spirits;
  • COFEPP’s financial support to MBWS, notably through a major supplier credit; an advance on current account granted by COFEPP; as well as support in the context of the recovery of a debt owed to MBWS by Clico Investment Bank in Trinidad and Tobago, which was facing financial difficulties;
  • COFEPP’s intervention in the appointment of MBWS’s new CEO; and
  • COFEPP’s direct participation in the establishment of MBWS’s commercial policy and budget, and in several operational decisions.

In light of these elements, the FCA considered that COFEPP already exercised de facto control on MBWS several months before the notification of the merger, starting on 13 April 2018 when COFEPP was able to exert a decisive influence on the choice of the MBWS’s new CEO. The operation was thus implemented without being notified, contrary to article L430-8 I. of the FCC.

The Commission’s referral of the Phoenix/McKesson merger to the FCA pursuant to article 9 EUMR

The European Commission decided to refer the examination of the effects in France of the acquisition of sole control of McKesson Europe by the German group Phoenix to the FCA. [18]

The referral was made pursuant to article 9 of the EUMR, which allows the Commission to refer the examination of a transaction to the national competition authority best placed to assess its effects on competition, at the request of said national competition authority. The request for referral can be based on two alternative conditions: either the concentration ‘threatens to significantly affect competition in a market within that Member State presenting all the characteristics of a distinct market or it ‘affects competition in a market within that Member State, which presents all the characteristics of a distinct market and which does not constitute a substantial part of the common market.

After examination of the case at hand, the Commission concluded that the proposed transaction could indeed significantly affect competition in the markets for the wholesale distribution of pharmaceutical products in France, where McKesson and Phoenix are currently two of the largest competitors (No. 1 and No. 5, respectively). The Commission thus decided to partially refer the case to the FCA.

This possibility must be distinguished from the far more frequent application of article 4(4), whereby the Commission can refer a case to a national competition authority at the request of the parties to the transaction.

It is only the fourth transaction to be referred to the FCA at its request, pursuant to article 9 of the EUMR. [19]


[1] Merger Control Guidelines of the French Competition Authority (FCA) 2020. The Guidelines refer to Council Regulation (EC) No 139/2004 of 20 January 2004 on the control of concentrations between undertakings.

[2] Similar provisions exist in other EU member states, such as Germany, where mergers prohibited by the Federal Cartel Office may exceptionally be approved by the Federal Minister for Economic Affairs and Energy if public interests outweigh the adverse effects on competition.

[3] The case is under merger review investigation by the European Commission (No. M. 10188), is subject to an article 14 procedure (in the case of non-compliance with the standstill obligation under EU Merger Regulation) (No. M. 10483) and has been subject to interim measures (No. M. 10493).

[4] This was the case, for example, in 2020, regarding the acquisition of 100 Bio c’ Bon stores by Carrefour. The FCA granted Carrefour a derogation from the standstill obligation in October 2020 (FCA Decision No 21-DCC-161 of 10 September 2021).

[5] FCA Decision No. 21-DCC-79 of 12 May 2021. The first one was Decision No. 20-DCC-116 of 28 August 2020. Before that, the FCA, which has had jurisdiction under French merger control rules since 2008, had never declined to clear a concentration.

[7] Conseil d’Etat Decision No. 249267 of 6 February 2004, and FCA Opinion No. 04-A-16 of 28 July 2004.

[8] FCA Decision No. 22-DCC-78 of 28 April 2022.

[10] French Senate, ‘Rapport fait au nom de la commission d’enquête afin de mettre en lumière les processus ayant permis ou pouvant aboutir à une concentration dans les médias en France et d’évaluer l’impact de cette concentration dans une démocratie’, Rapporteur David Assouline, 29 March 2022.

[11] Conseil d’Etat Decision No. 458272 of 7 April 2022, No. 458272 of 1 March 2022.

[12] FCA Decisions No. 13-D-22 of 20 December 2013, No. 13-D-01 of 31 January 2013, and No. 12-D-12 of 11 May 2012.

[13] FCA Decision No. 16-D-24 of 8 November 2016.

[14] FCA Decision No. 22-D-10 of 12 April 2022.

[15] FCA Decision No. 22-D-10 of 12 April 2022.

[16] FCA Decision No. 19-DCC-36 of 28 February 2019.

[17] These dawn raids were challenged before the French Criminal Supreme Court (Cour de Cassation) on the basis of the breach of attorney–client privilege. Cour de Cassation, Chambre Criminelle, 20 April 2022, No. 20-87.248.

[18] Commission Decision No. M.10404 Phoenix/McKesson of 30 March 2022.

[19] Previous referrals have resulted in the following decisions from the FCA: No. 10-DCC-02 of 12 January 2010, No. 10-DCC-98 of 20 August 2010 and No. 19-DCC-42 of 12 March 2019.

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