In a decision dated September 9, 2021, the French Competition Authority (the “FCA”) imposed a total fine of €500,000 on several players in the road freight sector for participating in a single, complex and continuous infringement aimed at organizing a collective boycott of new digital intermediation platforms and geolocation software applications (the “Decision”).[1]

Background

Road freight is the most frequently used mode of transport for conveying goods in France, as it accounted for over 85% of ton-kilometers transported in 2015. Until recently, players in the road freight industry fell into three categories, namely (i) freight forwarders, who organize the shipping of goods on behalf of customers; (ii) road transport operators; and (iii) freight exchanges, which are two-sided platforms enabling customers or freight forwarders to connect with road transport operators via online marketplaces.

In 2016, digital intermediation platforms started to enter the French road freight sector, which had the consequence of challenging the market position of traditional players. Specifically, intermediation platforms made it possible for customers to directly contact and negotiate with road transport operators. By contrast, before intermediation platforms entered the market, customers needed to resort to the services of freight forwarders, who in turn would contact road transport operators, sometimes through freight exchanges.

At the same time, road transport operators began to have access to improved geolocation software, enabling them to follow their fleets in real time and to optimize their pick-up and delivery rounds, without resorting to freight exchanges. In particular, a software called “Shippeo” was considered as directly competing with the solutions offered by B2PWeb, one of the main French freight exchanges.

In reaction, B2PWeb and its parent company H2P, followed by a number of groups of road operators and trade associations, agreed to refrain from working with digital intermediation platforms and from using Shippeo. This strategy was then conveyed to the groups’ and associations’ members through various means, such as emails, letters, or the publication of memoranda on some of the groups’ websites.

The FCA’s investigation and Decision

On April 5, 2018, following a referral from the French Directorate General for Competition, Policy, Consumer Affairs and Fraud Control, the FCA “dawn raided” the premises of several players in the road freight sector, including B2PWeb and H2P. Following an eighteen-month investigation, the FCA’s investigation services sent a statement of objections to B2PWeb and H2P, as well as seven trade associations and groups of road operators, accusing them of participating in a single, complex and continuous infringement implemented through boycotting actions, between the second half of 2016 until October 2019.

Even though the facts of the Decision appear to distinguish between the infringing companies’ behavior vis-à-vis digital intermediation platforms and their behavior regarding the use of Shippeo, the FCA’s Collège considered that the practices indeed amounted to a single and continuous infringement. In doing so, the Collège took into account the facts that (i) traditional players shared the common objective of limiting the economic development of digital players and preserving the current market structure (in which non-digital intermediaries play a pivotal role), and (ii) the various calls for boycott were made following the same modus operandi and by the same participants.

The FCA’s Decision further recalled that collective boycotts, which are deliberate actions aimed at evicting operators from a market, are anticompetitive regardless of their effects, i.e., whether or not they are actually implemented.

Consequently, despite acknowledging that the practices had caused a limited harm to the economy, the FCA imposed fines ranging from €1,000 to €350,000 on the infringing companies. The highest fine was imposed on B2PWeb jointly with its parent company H2P, as both entities were considered as ringleaders.

Conclusion

Over the past few years, the FCA has substantially contributed to the debate on the challenges posed by the emergence of digital gatekeepers for competition policy, for instance by pushing for the adoption of new provisions allowing the FCA to issue injunctions against “quasi-dominant” structuring digital platforms. The Decision offers an alternative insight into digitalization, as the FCA sanctions traditional players for hindering the development of digital platforms and slowing down the efficiency gains and increased competitive pressure associated with the rise of new digital players.

[1] FCA Decision no. 21-D-21 of September 9, 2021 regarding practices implemented in the road freight sector.