On March 5, 2019, the French Competition Authority celebrated its 10 years of existence. The President of the Competition Authority listed her priorities for the coming years, which include the retail sector and purchasing alliances, digital economy, “predatory” acquisitions and reflection on ex post control, as well as the labour market and labour collective agreements.
The French Competition Authority (“FCA”) in its current form was created by the Law on the Modernization of the Economy of August 4, 2008. In addition to the transfer of powers of the former French Competition Council (Conseil de la concurrence), the reform attributed new powers to the FCA, namely the power to authorize mergers, which was previously held by the Minister for Economy and Finance. The FCA also received new consultative powers and can, in particular, take ex officio action to provide advice and recommendations with regard to any competition matter. With regard to anti-competitive practices, the FCA now has investigative powers which were previously held by the Minister for Economy and Finance.
The 10th anniversary of the FCA was used as an opportunity to bring together the various actors in competition law in France, on March 5, 2019, to discuss the main challenges that the Authority faces and its priorities for the future.
Participants included Prime Minister, Edouard Philippe, the President of the FCA, Isabelle de Silva, the former President of the FCA and Vice-President of the French Council of State, Bruno Lasserre, the European Commissioner for Competition, Margrethe Vestager, the former European Commissioner for Competition, Mario Monti and the economist Jean Tirole.
Since its creation, the FCA has issued over 2,000 merger control decisions – including structuring decisions in the television (TF1/TMC/NT1, Canal Plus/TPS), distribution (Casino/Monoprix, Fnac/ Darty) or telecoms (Numericable/SFR) sectors. The Authority has also adopted 288 decisions regarding anti-competitive practices, including 96 sanction decisions for a total amount of €5 billion (in particular, the Authority recalled its involvement in cases concerning road signs, interbank commissions on cheques, washing products, railway freight, home care and personal care products, parcel transport, dairy products, floor coverings and household appliances). In addition, the Authority has made extensive use of its advisory role with nearly 255 opinions delivered (in particular in the food distribution, car repair, e-commerce, drug distribution, railway reform, bus transport, regulated legal professions or online advertising sectors).
The FCA priorities
Isabelle de Silva announced in her introductory speech that the priorities of the FCA for the coming years should focus in particular on the retail sector and purchasing alliances. Since the adoption of the law on balanced commercial relationships in the agricultural and food sectors of October 30, 2018, the FCA can conduct a competition review of any transaction aiming to create a purchasing alliance in the retail trade sector, either on its own initiative or at the request of the Minister for Economy and Finance. In addition, the President of the FCA indicated that an investigation was currently underway to measure the pre- and post-transaction impact of purchasing alliance combinations in the food retail sector. In parallel, a study was launched on the elimination of the distinction between physical and online stores.
The detection of infringements in the context of the digitalization of the economy, particularly agreements on prices, will constitute another priority of the FCA. According to Isabelle de Silva, digital technology presents a particular challenge for competition law by allowing greater concealment of infringements, particularly with the use of encrypted messaging systems. Moreover, digital technology may introduce new forms of coordination. In this regard, the FCA has announced that it will publish, before the summer, its joint study with the German Bundeskartellamt on algorithms and their impact on the implementation of competition law. In the field of merger control, the FCA President insisted on the necessity of examining “predatory” acquisitions, the aim of which is to eliminate future competitors, by introducing, if necessary, ex-post control on mergers and by taking greater account of potential competition in analyzing mergers.
Isabelle de Silva also indicated that a study was underway concerning the labour market and collective agreements. At the government’s request, an opinion will soon be issued on the impact on competition of the extension of collective agreements.
Finally, it was recalled that 2019 marks the entry into force of the ECN+ Directive at the European level, which aims to provide the competition authorities of Member States with the means to implement competition rules more effectively and to ensure the proper functioning of the internal market. The Pacte Law (loi Pacte) initially authorized the Government to transpose this directive by ordinance within nine months of its publication. However, the French Constitutional Council held in its decision of May 16, 2019, that these provisions were unconstitutional since they had no direct or indirect link with the original bill.
These measures include in particular the Authority’s ability to (i) reject certain referrals that do not correspond to its priorities and which can be handled by the Ministry for Economy and Finance, (ii) order structural injunctions in the context of litigation proceedings relating to anti-competitive practices, and (iii) take action ex officio in order to impose interim measures. They also provide for the extension of the use of the simplified procedure before the FCA for merger control, clarification of the criteria used to determine sanctions by removing the reference to the damage to the economy, and simplification of the modalities for referring cases to the liberty and custody judge ( juge des libertés et de la détention) and for the use of judicial police officers during dawn raids. As a result of the French Constitutional Council’s decision, these transposition measures are no longer in the Pacte Law and will have to be included in a new bill to be discussed before the French Parliament.
The French Constitutional Council however validated provisions in the Pacte Law which create a right for the FCA and DGCCRF agents to obtain the disclosure of detailed “ fadettes” i.e., the recording of telephone calls provided by mobile telephone operators, for the investigation and detection of anti-competitive practices. This access will be subject to the prior authorization of a controller of connection data requests following a request made by the General Rapporteur of the FCA or by the DGCCRF.