On November 15, 2022, the French Competition Authority (“FCA”) imposed a fine of 800,000 euros on Audiens Santé-Prévoyance (“Audiens SP”) for abuse of dominance through its subsidiary, Movinmotion, on the market for payroll management services for entertainment workers (the “Decision”).[1]
Activities and market position of the Parties
Audiens SP is a social security institution active in the entertainment sector. Audiens SP manages (i) a collective health fund to which French employers of intermittent workers in the entertainment sector are required to contribute and (ii) a collective pension plan financed by employers’ contributions s. Almost all employers participating in Audiens SP’s health fund also participate in Audiens SP’s pension plan, and Audiens SP holds a quasi-monopolistic position on the markets for collective supplementary social protection for entertainment workers.[2]
In 2016, Audiens SP acquired 25% of Movinmotion, a company active on the French market for payroll management services for entertainment workers. In 2018, Audiens SP acquired the remainder of Movinmotion’s capital.
The FCA’s initial findings
After initiating proceedings ex officio, the FCA found that Audiens SP had leveraged its dominant position on the French markets for collective supplementary social protection for entertainment workers to push Movinmotion’s activities on the French market for payroll management services for entertainment workers. In particular, from January 2016 (although Audiens SP only owned 25 % of Movinmotion at the time) until August 2020, Audiens SP allowed Movinmotion to use its resources, such as its brand name and image, thereby creating confusion between Audiens SP’s historical activities and Movinmotion’s activity. Moreover, from 2016 until January 2022, Movinmotion was granted access to Audiens SP’s exhaustive database of employers and workers (i.e., potential clients for Movinmotion), including access to strategic information such as their names, telephone numbers and e-mail addresses.
The FCA found that these advantages had not been granted at arm’s length, but rather at unduly favourable financial conditions.[3]
The FCA held that the combination of the above could ultimately lead to market foreclosure as Movinmotion’s competitive advantage could not be matched by any competitor. The number of Movinmotion clients significantly increased between 2016 and 2019 as a result of these advantages.[4]
Settlement and fine
The FCA sent Audiens SP and Movinmotion a statement of objections setting out its initial findings on January 5, 2022.
Audiens SP did not challenge the FCA’s findings, and the FCA agreed to settle with the Parties after a hearing held on June 14, 2022. Pursuant to the settlement procedure set out in Article L. 464-2 III of the French Commercial code, the FCA and the Parties agreed on the amount of the fine to be imposed on Audiens SP for the alleged practices, which was set at 800,000 euros.
Take-away
In line with European and French precedents,[5] the Decision confirms that a parent company with a strong dominant position in one market can be held liable for an abuse of dominance on a related market where it is only indirectly active through a non-dominant subsidiary. Furthermore, it should be noted that at the commencement date of the practices withheld by the FCA, Audiens SP only held a share of 25% of Moveinmotion’s capital.
[1] FCA Decision No. 22-D-20 of November 15, 2022 regarding practices implemented in the sector of payroll management solutions for intermittent workers in the entertainment industry.
[2] Decision, §82.
[3] Decision, §118.
[4] Decision, §125-134.
[5] See e.g. Court of Justice of the European Union, Case C-52/09, February 17, 2011, Konkurrensverket/TeliaSonera Sverige AB and French Cour de cassation, Commercial Chamber, decision of April 5, 2018, No.16-19186.