On August 8, 2023, following an in-depth investigation (“Phase 2”), the French Competition Authority (“FCA”) unconditionally approved the creation of a full-function joint venture between Aéroports de Paris (“ADP”) and the British caterer Select Service Partner (“SSP”, together “the Parties”) for the operation of catering services at Paris-Orly and Paris Roissy-Charles de Gaulle airports.
ADP is the state-owned operator of the three main Paris airports, where it operates various airport infrastructures, including retail shops and restaurants. In particular, ADP is active in the provision of food catering services at Orly airport through its subsidiary Extime Food & Beverages Paris (“Extime”). SSP is a multinational group active in concession food services and typically operates in airports, train stations, shopping malls, museums, and other similar venues. In France, SSP is present in several airports (Marseille, Nice, Nantes, Bordeaux, Lyon, Paris Roissy-Charles de Gaulle, and Orly), train stations (Gare de Lyon and Gare Montparnasse), and motorway service areas, as well as in the Paris underground.
On October 28, 2022, following a tender won by SSP, the Parties notified the FCA of their intent to transform Extime into a full-function joint venture which would operate almost all catering outlets at Charles de Gaulle and Orly airports.
On January 9, 2023, the FCA raised potential competition concerns with the proposed transaction and opened a Phase 2 investigation.
Identification of a separate downstream market for commercial airport catering
For the first time and similarly to the Commission, the FCA differentiated between:
- The upstream market for the granting of concessions, where the FCA identified a separate market for the concession of catering specific to the transport sector and left open a potential distinction for the concession of catering services provided in airports.
- The downstream market for the concession of catering market. Because passengers cannot access external food sources once they pass airport security checkpoints, the FCA considered that catering activities are not subject to competitive pressure from outside the airport and identified each ADP-managed airport as a distinct geographic market. Yet, the investigation found no need for further market segmentation, such as by terminal or zone, because operators set uniform pricing policies across all their catering facilities within an airport.
Absence of horizontal effects on the downstream catering markets
Initially, the FCA was concerned that the joint venture could ultimately have a virtual monopoly in Paris airports, presenting the risk of price increases and a decline in the quality and diversity of catering offerings.
However, the investigation revealed that, independently of the transaction, ADP had already entrusted Extime with the management of its catering spaces. Indeed, Extime had already started to operate spaces that were previously run by other operators when their leases ended. The FCA also considered that ADP has the legal capacity, the technical means, and the experience required to entrust this activity to a single operator over which it will exercise control, as well as a plausible incentive to do so.
On the basis of the counterfactual scenario, the FCA thus considered that even without the joint venture, ADP, through Extime, would likely control most of the catering outlets by 2032. The FCA concluded that the transaction would not shift the market from an oligopoly to a monopoly since, either way, a single operator would oversee the two airports’ catering outlets. The FCA, therefore, dismissed concerns about adverse horizontal effects on the downstream airport catering market.
Absence of vertical effects on the upstream concession catering market
When it opened the Phase 2 investigation, the FCA raised two concerns.
Firstly, the FCA feared that, as a result of the transaction, Extime would, in the long term, manage almost all the food service areas in the two largest French airports. The FCA was concerned that this leadership position would potentially give SSP a significant competitive advantage in the national market for the concession of food services in airports, enabling SSP to systematically prevail in calls for tender issued by ADP or other French airports. In its final decision, the FCA concluded that although the merged entity would have a substantial market share on the airport catering market, a substantial demand besides ADP-managed airports for SSP’s competitors will remain. Additionally, SSP would not have a significant competitive advantage, given that ADP’s calls for tenders allow all market operators to bid without giving a major competitive advantage to the outgoing operator.
Secondly, the FCA analyzed whether the transaction could limit access to concession catering services for other French airports. Yet, concerns about SSP limiting its services exclusively to other French airports were set aside, as SPP’s incentives to expand into other airports would not be altered by the transaction. In addition, other airports can collaborate with other operators whose competitive abilities are unlikely to be affected by the transaction. The investigation also confirmed that the transaction would not distort the competitive parameters of contracts between concession caterers and catering chains, so that Extime would not hold an undue advantage in its relations with these chains.
In light of the above findings, the FCA approved the merger without commitment.
 FCA Decision No. 23-DCC-165 of August 3, 2023, on the creation of a full-function joint venture between Select Service Partner and Aéroports de Paris.
 FCA Decision No. 23-DEX-01 of January 9, 2023, on the creation of a full-function joint venture between Select Service Partner and Aéroports de Paris. For further details, see the French Competition Law Newsletter, January 2023, available at: www.clearygottlieb.com/-/media/files/french-competition-reports/french-competition-newsletter-jan-2023.pdf.