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Competition & EU law insights

Keeping you up to date on Competition & EU law developments in Europe and beyond.

| 2 minutes read

France: Very First Application by the Board of the French Competition Authority of the Towercast Ruling under the Anti-Competitive Agreements Rules

By its decision n° 24-D-05 of 2 May 2024, the Board of the French Competition Authority (“FCA”) dismissed an attempt by its investigation services to apply Article 101 of the Treaty on the Functioning of the European Union (“TFEU”) and Article L. 420-1 of the French Commercial Code, which prohibits anti-competitive agreements, to completed mergers that did not exceed the national notification thresholds.

In its decision n° 24-D-05 of 2 May 2024, the FCA carried out, for the first time, an ex post analysis of a merger falling below the notification thresholds and not subject to an Article 22 TFEU referral to the European Commission, in light of Articles 101 TFEU and L. 420-1 of the French Commercial Code.

This approach follows the Towercast ruling by the Court of Justice of the European Union on 16 March 2023 (C-449/21), which recognised the possibility for national authorities to review mergers already completed with regard to Article 102 TFEU.

In the present case, the investigation services of the FCA sent a statement of objections to three companies active in the meat-cutting business (which includes the collection, handling, storage, treatment and disposal of animal carcasses and other animal material). 

These companies were accused of dividing and implementing a cartel to divide the French meat-cutting market geographically by means of mergers in the form of cross sales of their activities (through the conclusion of reciprocal business divestiture agreements).

The FCA ultimately considered that these agreements constituted five separate mergers, none of which met the French national notification thresholds set out in Article L. 430-2 of the French Commercial Code.

Relying on the Towercast case law, the FCA considered that the European merger control regulation does not preclude a merger which does not have an EU dimension, and which falls below the national notification thresholds, from being analysed by a competition authority of a Member State under anti-competitive agreements rules.

With this decision, the FCA marks an important turning point as it has established in practice that the Towercast case law covers both Article 102 and Article 101 TFEU. It also points out that Article 101 TFEU, like Article 102 TFEU, is a provision with direct effect that can be applied in the absence of an ad hoc merger control system.

On this basis, the FCA analysed the reciprocal business divestiture agreements concluded by the companies and found that they had neither an anti-competitive object nor an anti-competitive effect. The divestitures between the parties did not result from an overall market allocation plan that could be separated from the mergers and did not constitute an unlawful agreement. 

As a result of this decision, mergers that fall below the national notification thresholds may be challenged by the FCA after they have been implemented, on the grounds of both abuse of a dominant position or anti-competitive agreements. From now on, companies involved in a proposed acquisition will have to assess the competitive impact of the transaction in terms of both merger control and anti-competitive practices.

If you need more information or further guidance in this area, please contact Thomas Oster and Matthieu de Calbiac.



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