French Competition Law provides a comprehensive review of the French rules relating to competition: restrictive agreements, commercial negotiation, abuses of a dominant position, procedure and merger control.

French Competition Law

The French supervisory authorities have on several occasions verified whether a merger transaction might not lead to the creation or reinforcement of a collective dominant position . Certain market conditions undeniably foster oligopolistic interdependence between undertakings: highly concentrated offer, similar and stable market share, weak purchasing power, lack of innovation, stagnant demand, l …

Principle

The French supervisory authorities have on several occasions verified whether a merger transaction might not lead to the creation or reinforcement of a collective dominant position . Certain market conditions undeniably foster oligopolistic interdependence between undertakings: highly concentrated offer, similar and stable market share, weak purchasing power, lack of innovation, stagnant demand, low elasticity, homogeneous products, transparency, etc. . So far, authorities have always tried to corroborate these signs with evidence of structural  ties or collusion  between firms before making a finding of collective dominance. However, perhaps the case-law developments relative to abuse of dominant position are signalling changes in the field of concentrations.

Minister of the Economy, letter of 29 September 2000, LawLex200200002082JBJ; 12 December 2000, LawLex200200002099JBJ; Competition Council opinion No 01-A-03 of 4 April 2001, LawLex200200002109JBJ.

See Competition Council opinion No 01-A-03 of 4 April 2001, LawLex200200002109JBJ.

Competition Council decision No 02-D-44 of 11 July 2002, LawLex200200002118JBJ; Minister of the Economy, letter of 28 October 2008, LawLex200900001266JBJ: no coordinated effects where the operation is only a one-off co-investment for the parent companies which do not have joint control of any economic entity other than the target.

Minister of the Economy, letter of 12 December 2000, LawLex200200002099JBJ and 28 August 2007, LawLex200700001374JBJ; but see Letter of 29 September 2000, LawLex200200002082JBJ.

In the field of abuse of dominance, the Competition Authority appears to accept that a collective dominant position can be inferred solely from the structure of the market where there are no ties between the undertakings  where the cumulative criteria laid down by the European Union court in Airtours are fulfilled : there must be sufficient market transparency for all members of the dominant oligopoly to be aware, sufficiently precisely and quickly, of the way in which the other members' market conduct is evolving in order to monitor whether or not they are adopting the common policy; there must be an incentive for the members of the oligopoly not to depart from the common policy; the foreseeable reaction of current and future competitors, as well as of consumers, would not jeopardize the results expected from the common policy. In its revised guidelines , the Competition Authority takes up the Airtours criteria as its test for coordinated effects. It also refers to the Impala ruling in which the European Court of Justice held that “Such tacit coordination is more likely to emerge if competitors can easily arrive at a common perception as to how the coordination should work, and, in particular, of the parameters that lend themselves to being a focal point of the proposed coordination” . To find out whether a merger presents a risk of coordinated effects, it is appropriate to review, within a prospective analysis of the relevant market, their probability, by assessing, without adhering to the application of each of the three criteria taken in isolation, the overall economic mechanism of a possible coordination .

The probability of coordination is even greater if the market is stable and not particularly complex. To analyze coordinated effects, the Authority therefore takes account of the number of operators on the market , the symmetrical nature of undertakings , product homogeneity, the stability of demand and the importance of innovation . Complexity and instability of the economic environment can however be disregarded where there exist structural links or joint tariff systems between undertakings, or where they have access to market data . 

For coordination to be effective, the undertakings must be able to monitor the way the market functions. Coordination can only take place where the market is sufficiently transparent. The Competition Authority assesses market transparency with regard to product homogeneity , the possibility of obtaining market data relative to the evolution of demand and of price , the existence of structural links likely to facilitate exchanges of information  or whether there is a small customer base able to inform operators of the sales conditions of other operators .

Stability of coordination is ensured only if the undertakings are able to take reprisals against undertakings deviating from the common policy . The dissuasive power of any measures of retaliation depends on the size of the production capacity of the members of the oligopoly , the existence of multi-market contacts and the frequency of transactions . 

Finally coordination will only be profitable provided that it cannot be challenged by current or future competitors, or by  customers . The stability of coordination can be disputed in the presence of a competitive fringe (maverick operators) , the entry onto the market of potential competitors or the existence of a countervailing buyer power .  The target entity does not have the characteristics of a component of competition - or maverick - whose disappearance could lead to a risk of price hikes insofar as its competitive behavior is the result of anticipating a more pessimistic future than the other operators in the market, and not an aggressive pricing strategy .

Competition Council decision No 06-D-02 of 20 February 2006, LawLex200600000745JBJ; No 06-D-18 of 28 June 2006, LawLex200600001590JBJ; No 07-D-08 of 12 March 2007, LawLex200700000313JBJ.

Case T-342/99 Airtours, Judgment of 6 June 2002, LawLex200500004265JBJ; For an application, see Competition Authority decision No 19-DCC-36 of 28 February 2019, LawLex201900000494JBJ: there is no risk of coordinated effects of a concentration implemented on the white aniseed-based beverage markets for the "on-trade" channel, where the market transparency condition is not met is not fulfilled insofar as, with the exception of the "cash & carry" segment, operators in the "on-trade" channel are unable to determine their competitors' prices and conditions,  the finding of a differentiation in the business model between the new entity, a generalist undertaking, and the other market player, a specialist firm, is a factor which reduces the incentive to adopt a sustainable common line of conduct and that, finally, in the related market of yellow anisees, there is a potential competitor likely to destabilize any collusive equilibrium.

Minister of the Economy, letter of 28 October 2005, LawLex200600001892JBJ; 13 June 2007, LawLex200700001077JBJ. 

Competition Council opinion No 01-A-08 of 5 June 2001, LawLex200200002106JBJ; decision No 07-D-13 of 6 Aril 2007, LawLex200700000413JBJ; Minister of the Economy, letter of 28 October 2008, LawLex200900001266JBJ. 

Minister of the Economy, letter of 20 March 2003, LawLex200300002657JBJ; 6 April 2007, LawLex200700001335JBJ. 

E.g. see Competition Authority decision No 11-DCC-102 of 30 June 2011, LawLex201100001400JBJ: a merger is not likely to produce coordinated effects to the extent that it is not credible that the operators would invest in the development of their stock of LPG purely to punish a maverick operator, as the surplus demand stemming from a retaliation strategy could result in shortages of stocks making it difficult to supply regular customers.

Minister of the Economy, letter of 15 May 2008, LawLex200800001144JBJ. 

Minister of the Economy, letter of 20 January 2003, LawLex200300002878JBJ; 2 August 2007, LawLex200700001394JBJ; 22 August 2008, LawLex200800002209JBJ.

Revised guidelines pt 517. See also Minister of the Economy, letter of 19 December 2006, LawLex200700000499JBJ.

Competition Authority decision No 12-DCC-06 of 20 January 2012, LawLex201200000579JBJ.

Case C-413/06 P Bertelsmann v Impala, Judgment of 10 July 2008, LawLex200900001988JBJ.

Cons. d'Ét., 5 November 2014, LawLex201400001355JBJ, re: Impala ruling.

Minister of the Economy, letter of 18 December 2002; 19 November 2004, LawLex200700000543JBJ; 31 May 2006, LawLex200600001909JBJ. 

Minister of the Economy, letter of 22 August 2008, LawLex200800002209JBJ; 2 January 2009, LawLex200900001258JBJ; 24 August 2006, LawLex200700000531JBJ. 

Minister of the Economy, letter of 22 August 2008, LawLex200800002209JBJ. 

See esp. Minister of the Economy, letter of 10 February 2003, LawLex200300003198JBJ; 11 March 2003, LawLex200300003215JBJ; 10 August 2006, LawLex200600001935JBJ; 11 June 2008, LawLex200800001673JBJ; 30 April 2008, LawLex200800001145JBJ. 

French Competition Law

567. Principle

Demandez un accès gratuit
au contenu exclusif Livv – juristes d’entreprise

Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

567. Principle

Demandez un accès gratuit au contenu exclusif Livv – juristes d’entreprise

Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

Demandez un accès gratuit
au contenu exclusif Livv – juristes d’entreprise