On April 7, 2020, the FCA imposed a €900,000 fine on Pari Mutuel Urbain (“PMU”), the main French horse race betting group, for failing to separate the betting pools of its online and physical activities.[1] PMU had taken this commitment in 2014 in order to end an FCA investigation for a potential abuse of dominance.[2]

PMU historically held a legal monopoly over the organization of horse races and all related bets. In 2010, French law No. 2010-476 opened the online gambling sector to competition, while maintaining PMU’s monopoly on horse race betting through physical outlets.[3]

In its 2014 decision,[4] following a complaint by Betclic Everest Group (“Betclic”) race betting company, the FCA found that PMU combined the betting pools of its physical and online activities, allowing PMU to leverage its legal monopoly on physical bets to increase the attractiveness of its online offer to the detriment of its competitors. PMU could thus offer much higher winnings to bettors, guarantee more stable odds and widen its betting offering without jeopardizing the quality of existing bets.[5]

To alleviate the FCA’s competitive concerns, PMU submitted several commitments to the FCA, including to segregate its online and offline betting pools . The FCA accepted these commitments and made them binding in February 2014.[6]

KPMG, in its capacity of monitoring trustee, produced eight quarterly reports—all of which concluded that PMU complied with its commitments. However, in 2017, rivals Betclic and Zeturf France LTD complained that PMU combined its online and offline betting pools for foreign horse races, in breach of the commitments.

PMU argued that betting pool arrangements with foreign betting companies were not included in the scope of the commitments since the FCA’s Decision did not contain any reference to foreign races.[7] PMU further argued that the monitoring trustee had approved the exclusion of foreign races from the scope of the commitments.[8]

However, the FCA stressed that the language of the commitments was general and did not establish any distinction between domestic and foreign races—while PMU had never approached the FCA regarding the scope of the commitments.[9] In addition, the FCA noted that the commitments’ objective was to ensure that PMU would not take advantage of its legal monopoly in offline horse race betting to obtain an unfair advantage in the online horse race betting sector.[10] The FCA also considered that PMU could not ignore the scope of the commitments since it had contributed to their drafting.

Finally, the FCA recalled that the monitoring trustee’s interpretation of commitments could not override the FCA’s. The FCA noted that KPMG’s reports never mentioned foreign races and that its missions consisted in overseeing PMU’s IT projects and thus were merely technical. More generally, the FCA found that trustees have neither the power nor the legal abilities to interpret commitments.

When calculating the fine, the FCA emphasized that non-compliance with antitrust commitments was particularly serious, especially when the commitments are unambiguous, taken voluntarily, at the core of the procompetitive mechanism designed by the FCA, and their breach had started since the very date on which the commitments had become effective.[11]

[1]              FCA Decision of April 7, 2020, n°20-D-07 (the “Decision”).

[2]              FCA Decision of February 25, 2014, n°14-D-04.

[3]              Law No. 2010-476 of May 12, 2010 relating to the opening to competition and regulation of the online gambling sector, JORF of May 13, 2010, n°0110, p. 8881.

[4]              FCA Decision of February 25, 2014, n°14-D-04, para. 34.

[5]              Ibid., para. 101.

[6]              Decision, paras 28-29. PMU further committed to (i) modifying its website to better distinguish between the activities open to competition and those subject to its monopoly; (ii) separating the customer base and commercial teams of its online and offline businesses; and (iii) accounting separately for its online and offline businesses.

[7]              Decision, paras. 93 and 100.

[8]              Decision, para. 93.

[9]              Decision, paras. 101-103 and 111.

[10]             Decision, para. 171.

[11]             Decision, paras. 89, 160, and 166.