On December 6, 2022, the French Competition Authority (“FCA”) issued a decision rejecting TDF’s request to lift the commitments it had entered into in 2015 regarding abuse of dominance practices on the market for hosting mobile network antennas on pylon sites (the “Decision”).[1] The FCA rejected this request due to lack of evidence that the competition concerns identified in 2015 have disappeared.
Background
“Tower companies,” such as TDF, lease pylon sites to mobile operators so that the mobile operators can install their network antennas on these and ensure maximum network coverage.
In 2015, the FCA considered that TDF was likely dominant in the market for hosting mobile network antennas on pylon sites. Consequently, the combination of long-term contracts and the inclusion of very restricted early termination clauses (only for a dozen sites per year) in TDF’s contracts was at risk of leading to anticompetitive market foreclosure of TDF competitors.
In light of the competition concerns identified by the FCA on the basis of Article 102 TFEU and L. 420-2 of the French Commercial code, TDF committed to (i) limit the duration of its future hosting contracts to 10 years (as opposed to 20 years previously); (ii) limit compensation owed by mobile operators for early termination of the contracts; and (iii) increase the possibility of early termination for mobile network operator customers.[2] The FCA made these commitments binding for 11 years, i.e. until June 3, 2026.
The FCA Decision rejecting TDF’s request to lift its 2015 commitments
Article L. 464-2 of the French Commercial Code states that the FCA may modify or supplement commitments (i) where the factual background basing the decision has significantly changed, (ii) thereby eliminating the competition concerns addressed by the commitments decision.[3]
In March 2021, TDF asked the FCA to lift its commitments on the basis of this article, in particular because the market for hosting mobile network antennas has significantly evolved, and many competitors have entered the market since 2015. Although the FCA considered that these developments constituted a sufficiently significant change on the market to justify considering TDF’s request for a review of its commitments, the FCA nonetheless rejected TDF’s request on the merits.
The FCA notes that, while demonstrating a significant change on the market is necessary to obtain the lifting or revision of commitments, commitments can only be lifted when there is sufficiently accurate and detailed evidence that all the competition concerns addressed by the commitments have effectively disappeared. In this case, TDF failed to provide sufficient evidence that the competition concerns identified in the 2015 commitments decision had disappeared, and the FCA ultimately found that TDF’s market share (i.e. a market share of 40-50% which has remained stable over the last three years and is significantly higher than that of its closest competitor) remained indicative of a dominant position. The FCA thus concluded that there were no grounds for lifting the commitments prior to their end date.
[1] FCA Decision No. 22-D-24 of December 6, 2022 regarding TDF’s request for a review of the commitments made binding by Decision No. 15-D-09 of June 4, 2015.
[2] FCA Decision No. 15-D-09 of June 4, 2015, para. 91.
[3] See for instance FCA Decision No. 22-D-14 of July 4, 2022 regarding the request to review the commitments of Société Réunionnaise du Radiotéléphone, made binding by Decision No. 14-D-05 of June 13, 2014.