Year in Review 2020 and Year to Come 2021 summarises some of the major developments in French competition law last year, and a selection of key changes that we anticipate over the coming year.

Key updates to

9

major legal developments in 2020 and 2021

Significant events in 2020

2020 was a very active year at the French Competition Authority marked by a record high antitrust fine and very diversified enforcement tools.
Explore the tabs below to review the key legal developments you need to be aware of in 2020

Highest ever antitrust fine imposed in 2020

The French Competition Authority (“FCA”) imposed major cartel and abuse of dominance fines (total amount of fines was €1.8 billion versus €632 million in 2019). 

The FCA imposed major fines on:

  • Apple and its wholesalers, Ingram and Tech Data, for anticompetitive agreement within Apple distribution network and Apple for abuse of economic dependency (a specific French provision of the French Commercial Code), thereby imposing its highest individual and collective fines ever (€1.2 billion, of which €1.1 billion against Apple, March).
  • Ham and cold meat producers for coordinating the purchase of cuts of ham from slaughterhouses at lower prices and the fixing of price increases on cold meat products (€93 million, July).

Among the smaller-scale cartel and vertical restraint cases the FCA sanctioned inter alia

  • Collective boycott practices against a healthcare network implemented by the council of dental surgeons and two trade union federations (€4 million, November).
  • Three Alsace wine professional organisations for price fixing of grapes and for sharing price recommendations for bulk wine to its members (€376,000, September).
  • A tea producer for imposing online resale prices on its retailers (€226,000, December).

Another significant highlight has been the shift of the FCA cartel decisional practice which previously prohibited subsidiaries from the same group from coordinating with each other in the event they were submitting distinct bids in the context of public tenders. The FCA aligned its case law with the 2018 Ecoservice projektai judgment of the European Court of Justice (November).

The FCA also had an important and rather unusual activity in terms of abuse of dominance. In particular, it heavily fined Novartis, Roche and Genentech for collectively abusing their dominant position by disparaging Avastin medicine and disseminating an alarmist and misleading speech before public authorities. Similar to the economic dependency theory used against Apple, the FCA did not hesitate to base its decision on a rare theory of harm (€444 million, September).

The FCA issued its first merger control prohibition and decisions on retail purchasing alliances

The FCA‘s merger control activity remained high despite the Covid-19 pandemic, with almost 200 cases (versus 270 in 2019).

The FCA prohibited its first transaction (retail sector) since its creation in 2009 blocking the acquisition of a hypermarket by a competitor which would have created a local duopoly.

The FCA also issued its first two commitment decisions concerning retail purchasing alliances. To avoid weakening suppliers, such as SMEs, some products from the agri-food sector have, inter alia, been excluded from the scope of the Carrefour/Tesco and the Casino/Auchan/Metro/Schiever joint purchasing agreements.

Finally, the FCA conditionally approved one transaction at the end of a Phase 2 investigation and nine transactions at the end of a Phase 1 investigation – subject to structural as well as behavioural remedies.

The FCA used all its enforcement and advisory tools

A notable antitrust case concerned the interim measures imposed on Google. The FCA compelled Google to engage in good faith negotiations with publishers and news agencies regarding the remuneration they are entitled to for the reuse of their protected content (April). 

The FCA also monitored commitments submitted by former infringers and fined two companies active in the funeral insurance products and betting industries for the breach of their commitments (€1.1 million, February and April).

The FCA publicly indicated only one unannounced inspection (at the premises of undertakings active in the meal vouchers sector) that it had carried out (February). This low figure may be due to the Covid-19 pandemic and may increase in 2021 if the FCA wants to maintain its antitrust enforcement pace. An interesting point to note is that this dawn raid occurred very shortly after the FCA already sanctioned heavily the undertakings of the meal vouchers sector.

The FCA also had an active advisory role in 2020 with not less than 12 opinions (versus 18 in 2019) targeting inter alia the competitive situation in Corsica and the telecommunication and transport sectors. 

More generally, the FCA remained responsive during the Covid-19 pandemic. The FCA set up a dedicated team monitoring anticompetitive practices from companies that could have tried to take advantage of the pandemic (e.g. the FCA prevented exclusive import practices that risked slowing down overseas hospitals’ access to respirators, April). It offered guidance to companies (e.g. informal advice to a professional association regarding the possibilities of discussing the terms of commercial rents during the pandemic, April). Finally, the FCA temporarily adapted time limits and procedures.

Improvement and self-assessment of the FCA’s enforcement tools

A dedicated unit within the FCA has been created to reply to the growing need for expertise in the digital economy (see also Year to come).

Regarding merger control, the FCA published its revised merger control guidelines aiming at simplifying the procedures and providing even more foreseeability (see also Year to come). 

The FCA also made public its study on behavioural remedies in which it took stock of its recent decisional practice, as well as various compliance tools (e.g. guide for SMEs, press releases describing its decisions including on-topic recommendations).

Significant events in 2021

2021 shall see high antitrust enforcement in the digital economy and enhanced merger control through the implementation of a targeted merger control tool.
Explore the tabs below to review the key legal developments you need to be aware of in 2021

The digital economy (including the retail and finance sectors) is expected to feature high on the FCA’s 2021 enforcement agenda

The FCA’s enforcement priorities are expected to focus on the digital economy which includes sectors such as retail, payment services, online advertising and public procurement. Now that its digital unit is fully operational, the FCA will increase the pace of its investigations in the digital economy.

To achieve this aim, and in order to counter criticism of slow antitrust enforcement in the fast-moving digital economy, the FCA plans to implement a real time monitoring scheme of digital platforms’ general conditions and to monitor more closely distortions of public procurement processes by using algorithms and open source intelligence.

On top of certain key ongoing antitrust investigations such as those opened in the consumer electronics sector and the long-standing vertical investigation in the optical sector, the FCA should conclude investigations in the online advertising sector and on massive data collection practices. It will also continue its ongoing investigations against Google (related rights) and Apple (iPhone iOS14 operating system).

The digital economy also on the FCA’s policy agenda

Several opinions from the FCA are also expected. One should cover the competitive transformation of the financial sector and provide guidance regarding anticompetitive behaviours in the FinTech and payment services sectors. Another one should focus on the recent changes and concentration in the contemporary music sector.

Lastly, the FCA should remain a key source of proposals in the debate about the future regulation of digital platforms led by the European Commission (i.e. the Digital Market Act and the Digital Services Act) and the revision of the European Commission’s communication on the relevant markets. Surely, the impact of the digital economy on market definitions will be part of the debate.

Modernisation of the FCA’s antitrust enforcement tools and increased powers

In December 2020 a new law (the DDADUE law) strengthened the effectiveness of the FCA’s action by allowing, inter alia, a modernisation of its investigation procedures (e.g. simplification of the regime applicable to dawn raids, extension of the scope of the simplified procedure, simplification of the leniency regime).

The DDADUE law also empowered the French Government to transpose into French law the 2018 European directive ECN+ which confers extended powers to national competition authorities, allowing them to intervene more quickly, such as the right to:

  • Have a discretionary prosecution system (i.e. the possibility to reject complaints for lack of priority to focus its resources on key anticompetitive practices).
  • Impose more deterrent fines against professional organisations.
  • Open ex-officio interim measure cases.
  • Impose structural injunctions in litigation proceedings to ensure anticompetitive practices actually cease.
The Ministry for the Economy (DGCCRF) launched the public consultation on the transposition of the ECN+ directive (early January 2021).

Special attention to mergers in the retail sector and protection against predatory or consolidating acquisitions

The FCA announced it will pay attention to transactions where the Covid-19 pandemic may have altered the economic context (such as in the retail sector). In particular, the FCA will ensure that no transactions artificially escape its review due to low turnover achieved in 2020.

More generally, to address what some call a loophole in merger control, the FCA announced it will fully grasp the possibility granted to national competition authorities by the European Commission to refer to the latter sensitive transactions (for example, killer acquisitions in various sectors such as the digital economy and pharma), even when these transactions are not subject to national merger control (e.g. because the turnover thresholds are not met). The FCA announced the creation of a monitoring taskforce to detect such acquisitions.

This referral mechanism does not completely close the debate about the relevance of the implementation of either an ex post merger control regime or a regime in which it could impose disclosure requirements on some market players in key markets even where the current turnover thresholds are not met (e.g. killer acquisitions in the tech, health and media - see the FCA’s opinion on the competitive situation in Corsica).

Supporting companies with their compliance efforts and taking into account climate issues

The FCA should present the conclusions and recommendations of a working group on compliance principles, tools and actions to be implemented by companies. It is also expected to publish a much-debated study dedicated to professional associations.

Following the publication by eight French regulators (including the FCA) of a working paper on their role and tools in the battle against climate change, sustainable development will continue to feature high on the FCA’s agenda who announced it will support companies with guidance when they plan to carry out concerted actions with environmental objectives.

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