The French Competition Authority (FCA) has just launched a public consultation on potential changes to the French merger control regime, with a view to empowering it to review certain below-threshold transactions which could nevertheless raise antitrust concerns. The FCA considers that such cases are increasingly common.
The FCA has already held public consultations to test ideas aimed at reviewing such transactions. At the time, ideas such as the introduction of a transaction value threshold were disregarded by the FCA, as it saw Article 22 of the European Union Merger Regulation (EUMR) as the appropriate tool to catch these transactions.
As a reminder, Article 22 of the EUMR allows national competition authorities (NCAs) to refer to the European Commission (EC) transactions that do not meet EU turnover thresholds, but affect trade between Member States and threaten to significantly affect competition in the territory of the Member States making the request. This tool gained a higher profile in 2020 when the EC announced a change of approach, whereby it encouraged NCAs to refer transactions under Article 22, even when they did not meet national thresholds.
But the European Court of Justice Illumina/Grail judgment of 3 September 2024 put an end to that approach, ruling that the EC can only accept requests for referral when NCAs themselves have jurisdiction to review transactions. Hence, transactions that do not meet the turnover thresholds at national level can no longer be referred to the EC.
Against this background, the FCA has launched a new public consultation, asking stakeholders to comment on three options to supplement the current French merger control turnover thresholds:
- First option: a call-in mechanism, based on quantitative and qualitative criteria to be defined, for transactions that could negatively affect competition. The applicable period for this option remains unknown at this stage.
- Second option: a new mandatory threshold for transactions involving companies holding a certain degree of market power, i.e.:
- Companies which have previously been part of a transaction reviewed by the FCA or the EC and subject to (i) a prohibition or (ii) a clearance subject to commitments; or
- Companies (i) previously fined for abuse of dominance by the FCA or the EC or (ii) which made commitments in relation to an alleged abuse of dominance; or
- Companies designated as gatekeepers by the EC under the Digital Markets Act.
As a third option, the French merger control regime could remain unchanged and the FCA could continue to rely on its current use of antitrust law to conduct ex post review of transactions that do not meet French turnover thresholds.
The outcome of this public consultation will be important for companies doing business in France, with potentially far-reaching powers for the FCA to review below-threshold transactions and consequent uncertainty (in a context where the FCA already applies the third option).
This is all the more interesting given that, in parallel, a draft bill is pending before the French parliament to increase French turnover thresholds (from 50m€ to 80m€) with the aim of reducing the number of transactions reviewed by the FCA. In short: more time and resources to focus on an increased number of below-the-thresholds mergers.
To find out more about our thoughts on the key trends and developments in merger control to be aware of in the coming year, read Theme 3 of our Global antitrust in 2024: 10 key themes report.
