France: Competition Authority
The French Competition Authority (the Authority) has continued to move forward at a sustained pace in 2017 and the first half of 2018. It has maintained its unabated willingness to generate tangible results for consumers as well as its 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 on infringers; making commitments binding upon firms whose behaviour has raised competition concerns; devising well-suited remedies to allow a merger to proceed; and issuing opinions to assess the impact on competition of draft or existing pieces of legislation – 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 interest of sound competition enforcement.
On the procedural front, a notice regarding the settlement procedure introduced back in August 2015 is in the process of being finalised, which builds on a two-year decision-making practice and a recent public consultation on a draft notice. This new procedure has brought benefits in terms of predictability for the parties on the settled fine, efficient resource allocation and minimisation of litigation costs. Among the five settlement decisions issued in 2017, one concerned a cartel in the PVC floor covering sector in which, for the first time, the Authority combined both its settlement procedure and its leniency programme. A €302 million fine was imposed against three manufacturers and a trade association. This cartel was also a landmark decision as, for the first time as well, the Authority considered that a non-competing agreement concluded among manufacturers regarding the external communication of the environmental performance of their products infringed competition law. This novelty in the decision-making practice illustrates how the Authority adapts to new evolutions in the economy such as the growing importance of environmental concerns.
The Authority’s robust enforcement in 2017 was also reflected in three other noticeable cases. For the first of them – also a settlement procedure applied this time in the context of an abuse of dominance – the Authority issued a €100 million sanction against an incumbent energy operator for the way it used its historic customer database and other advantages derived from its former monopoly to compete in the liberalised energy markets. On the grounds of dominance as well, the Authority considered that a pharmaceutical company had abused its dominant position by implementing a coordinated smear campaign against generic manufacturers in order to delay the entry of competing drugs into the market. The company was fined €25 million. Last but not least, and for the first time in its decision-making practice, the Authority imposed a €30 million fine on a chemical company who had repeatedly obstructed its investigations. This case is still being investigated.
Merger control has also been an area of continued strong engagement and new breakthroughs for the Authority. Three months ago, it has, for the first time, examined the merger of two online platforms (Logic-Immo.com and SeLoger.com) in the real estate sector and authorised without condition the transaction after an in-depth examination. The Authority conducted a vast consultation of all the industry professionals and internally managed, for the first time as well, an online questionnaire addressed to more than 30,000 estate agencies prompting 2,000 responses. In 2017, in light of recent developments in the free and pay-TV sectors, the Authority completed a large-scale review of commitments previously negotiated with the Canal Plus group. When it comes to commitments, the Authority also did not hesitate to show some teeth when the situation requires it. It opened a case to ensure that the Fnac group complies with its commitment to divest six stores in Paris and the surrounding region following the Fnac/Darty merger authorisation in the retailing of brown and grey goods back in 2016. The Authority has also remained an innovative enforcer as demonstrated in a hospital merger, which was referred to us by the European Commission and involved the acquisition of the third largest healthcare provider in France by the second largest one. In the case at hand, the Authority assessed non-price effects (ie, whether the acquisition could lead to a poorer quality in medical care offering for patients).
Alongside its active enforcement efforts, the Authority has vigorously pursued its advocacy activities. It launched a vast sector inquiry on the sectors of medicines and medical biology given the importance of the healthcare sector in the national economy and its constant developments. The Authority also recently published its much-awaited inquiry into the online display advertising sector and the significance of data processing following its 2016 study into big data and competition. Internet advertising having become the leading form of advertising in France, the sector inquiry looks into how competition operates in this new ecosystem. One of its main conclusions is that some major players like Google or Facebook derive specific and significant competitive advantages from the data and advertising space they control. The study also identifies some competition issues in the market. Based on that preliminary assessment of the market, the Authority is currently considering whether or not investigations should be opened to address potential competitive concerns.