On October 13, 2022, Advocate General Kokott delivered her opinion on a preliminary reference from the Paris Court of Appeal in the Towercast case, stating that transactions that escape EU and national merger control review are susceptible to review under Article 102 TFEU.
Article 102 TFEU prohibits undertakings from abusing their market dominance. In 1970s, the Court of Justice held in its landmark Continental Can judgment that an acquisition by a dominant company of a rival that strengthens that dominant position constitutes an abuse in violation of Article 102 TFFU. The practical impact of Continental Can has, however, been reduced with the introduction of the EU Merger Regulation in 1989, designed to capture major transactions that could lead to strengthening of market dominance.
In June 2016, a French television transmission service operator, TDF, acquired its rival, Itas, in a three-to-two deal, leaving Towercast as the only remaining competitor. The transaction fell below merger control thresholds in the EU and France and avoided any scrutiny. Towercast filed an abuse complaint with the French Competition Authority, which rejected it on the basis of a “clear dividing line between merger control and the control of anticompetitive practices”. Towercast appealed before the Paris Court of Appeal, which asked the Court of Justice whether Article 21(1) EU Merger Regulation precludes national competition authorities from assessing under Article 102 TFEU a concentration that did not meet the relevant EU or national merger thresholds.
Advocate General’s Opinion
The Opinion reiterates that Article 102 TFEU is a directly applicable provision of primary EU law and therefore prevails over secondary EU law, including the EU Merger Regulation. Article 102 TFEU is conceptually applicable in two situations.
First, when a transaction has been approved under EU or Member State merger control rules. In this scenario, the Article 102 tool seems futile because a transaction approved as compatible with the internal market should not violate Article 102 TFEU.
Second, when a transaction escapes EU and Member State merger control scrutiny. In this scenario, the Article 102 tool is appropriate to fill in a lacuna in the existing merger control mechanism, to capture “killer acquisitions” or potentially problematic transactions that fall below the merger control thresholds. In her proposal to expand the transactional toolbox, Advocate General Kokott draws additional comfort from the General Court’s judgment in Illumina, allowing the Commission to review transactions below the EU and national merger thresholds upon referral from national competition authorities.
The Opinion is not binding, though recent statistics indicate that the Court of Justice follows Advocate General opinions in approximately 80% of cases. If the Opinion is followed, merger control risk analysis would become even more complex – even if a transaction were to fall below EU and national merger control thresholds, transactional parties would still need to consider the degree of risk of: (i) a merger control review by the Commission following a referral in line with the Illumina precedent; and (ii) a potential abuse investigation by the Commission or national competition authorities in line with Towercast. Any acquisition by a putatively dominant company might potentially be scrutinized years after closing, given that there is no deadline to initiate an abuse investigation. The Opinion suggests that any abuse concerns would likely be resolved through the imposition of behavioural remedies and fines rather than divestment orders. This is not obvious because Article 102 TFEU requires that the violation be put to an end. A violation would normally only cease upon divesting the acquired rival or other similar assets, if it stems from horizontal concerns related to the acquisition of a rival.
 Towercast v Autorité de la concurrence (Case C-449/21), opinion of Advocate General Kokott, ECLI:EU:C:2022:777.
 Europemballage Corporation and Continental Can Company Inc. v Commission (Case C-6/72), ECLI:EU:C:1975:50.
 Council Regulation (EC) No 139/2004 of 20 January 2004 on the control of concentrations between undertakings, OJ L 24, 29.1.2004, p. 1–22.
 Decision 20-D-01 of the French Competition Authority of January 16, 2020 regarding a practice implemented in the digital terrestrial television broadcasting sector; and Towercast v Autorité de la concurrence (Case C-449/21), opinion of Advocate General Kokott, ECLI:EU:C:2022:777, para. 21.
 “This Regulation alone shall apply to concentrations as defined in Article 3 […].”
 Decision 20/04300 of the Court of Appeal of Paris of July 1st, 2021; and Towercast v Autorité de la concurrence (Case C-449/21), opinion of Advocate General Kokott, ECLI:EU:C:2022:777, paras. 22–23.
 Towercast v Autorité de la concurrence (Case C-449/21), opinion of Advocate General Kokott, ECLI:EU:C:2022:777, para. 60.
 Towercast v Autorité de la concurrence (Case C-449/21), opinion of Advocate General Kokott, ECLI:EU:C:2022:777, para. 57; Although there is a presumption that concentrations under the thresholds are not harmful and do not require an ex ante control, those thresholds do not introduce a presumption concerning ex post control.
 Towercast v Autorité de la concurrence (Case C-449/21), opinion of Advocate General Kokott, ECLI:EU:C:2022:777, para. 48.
 Illumina v Commission (Case T-227/21), ECLI:EU:T:2022:447, paras. 183–184; See our Alert Memo, “European Commission Implements New Policy To Investigate Transactions That Would Otherwise Escape Merger Review”, April 23, 2021, available here.
 The statute of limitations impacts the ability to impose fines.
 Towercast v Autorité de la concurrence (Case C-449/21), opinion of Advocate General Kokott, ECLI:EU:C:2022:777, para. 63.