On March 9, 2021, the French Conseil d’Etat ruled that the employee representative body of the target company could appeal the FCA’s decision to clear the transaction. However, the Conseil d’Etat dismissed the appeal on the merits.
On July 24, 2019, the FCA conditionally cleared the acquisition of Mondadori Magazines France (“Mondadori”) by Reworld Media. Both companies are active in print magazine publication, editorial website operation, and the sale of advertising space. The FCA raised competition concerns in the market for general interest car magazines as it found that the merged entity would own three of the four specialist magazines. To mitigate the FCA’s concerns, Reworld Media undertook to sell one of its magazines to ensure competition and pluralism post-transaction.
The Conseil d’Etat decision
Mondadori’s social and economic committee lodged an appeal against the FCA’s decision before the Conseil d’Etat. Mondadori argued that the FCA (i) had violated defense rights because the parties’ competitors could not submit observations on the proposed transaction and (ii) had violated French labor law by clearing the transaction although Mondadori had failed to inform and consult its social and economic committee.
The Conseil d’Etat ruled that the target’s social and economic committee’s appeal was admissible. In light of the social and economic committee’s role in the expression of employees and the effects of the clearance decision, the social and economic committee had standing to request the annulment of the FCA’s clearance decision.
However, the Conseil d’Etat dismissed the appeal on the merits. As regards the violation of defense rights’ claim, the Conseil d’Etat noted that the FCA had published the merger notification on its website and that the FCA had conducted several market tests enabling competitors to voice their opinion. The Conseil d’Etat concluded that the claim was factually unfounded and the FCA had not violated defense rights. As regards the violation of French labor law, the Conseil d’Etat recognized that Mondadori was under the obligation to inform and consult the social and economic committee. However, it concluded that the FCA had not erred in disregarding this obligation because Mondadori, as the target company, is not a notifying party. The Conseil d’Etat also noted that French labor law does not impose on the FCA to verify that employee representative bodies have been consulted.
 French Conseil d’Etat ruling of March 9, 2021, no. 433214.
 FCA Decision no. 19-DCC-141 of July 24, 2019 (the “FCA’s decision”).
 French Conseil d’Etat ruling of March 9, 2021, no. 433214, para. 3.
 Ibid., para. 4.
 Ibid., para. 7.
 Ibid., para. 8.