Merger Controls First Edition - J Sagar Associates

Linklaters LLP France
timeline for clearance, and higher likelihood of significant commitments) was critical in the decision of those companies
to withdraw the notification and to call off the contemplated deal (or at least its French aspects).
Two Phase II decisions only are not really sufficient to elaborate on the distinction between remedies following a Phase I
and remedies following a Phase II.
Behavioural remedies
However, following either Phase I or Phase II proceedings, one of the most distinctive features of the Autorité when it
comes to merger remedies is its willingness to assess and accept behavioural commitments (whereas the European
Commission gives a clear and almost systematic preference to divestiture commitments).
As mentioned above, the Autorité had to assess a large merger in the TV sector, namely the acquisition by TF1 of TMC
and NT1, which would have strengthened the TF1 group’s position in the markets for broadcasting rights and advertising
(around 40-50%) 26 .
According to its press release, “the Autorité nevertheless found that with nearly 50% market shares, the TF1 group was
keeping a dominant position in this market that could only be strengthened by this acquisition, given the seemingly
considerable growth potential of TMC and NT1 and despite their currently very low market shares (less than 2% in all)” 27 .
The remedies offered by TF1 were essentially behavioural and span over a period of 5 years (with apparently flexible
review clauses). In short, TF1 undertook to facilitate the circulation of broadcasting rights for the benefit of competing
channels, to renounce any kind of cross-promotion on TF1 of the programmes shown on the acquired channels (TMC and
NT1), and to handle separately the advertising business of TF1 on the one hand, and of TMC and NT1 on the other.
Innovative remedies
In addition to behavioural remedies, the Autorité has proved that it can be open to innovative commitments.
In this regard, the single commitment that was most widely commented in the recent months is certainly the creation of a
“competition stimulation fund”, proposed by Veolia Transport and Transdev in order to remedy the Autorité’s concerns
that their merger could reduce the incentive for the smaller competitors to participate in public tenders.
This Veolia/Transdev28 case involved the merger of two of the three national leaders in urban and intercity passenger
transport. The Autorité identified competition concerns on five local markets for intercity transport, and on the national
market for urban transport. The concerns on local markets were addressed mostly by “standard” divestitures, but it proved
more difficult for the Autorité to deal with the national market for urban transport, because this market is organised through
public tenders launched by local public entities, which own the assets concerned (vehicles, garages etc.). Therefore, the
Autorité could not directly strengthen competitors through divestitures, but it had to ensure that future public tenders
would see credible competitors facing the merged entity.
The Autorité accepted the parties’ innovative and unprecedented remedy to finance a competition stimulation fund (for
the amount of €6.54 million) designed to allow the relevant public authorities to finance two types of measures:
• compensating all or part of the response expenses for unselected candidates following calls for tenders, thereby
encouraging more competitors to take part in them; and
• the use by local and regional administrations, notably small ones, of project management assistance services in
order to help them improve their knowledge of the networks and obtain the best prices in the framework of the
tenders that they organise.
Another example of innovative and unprecedented remedies accepted by the Autorité is provided by the GDF SUEZ/Ne
Varietur case29 (following Phase I proceedings). The Autorité considered that the acquisition of sole control by GDF SUEZ
of one of its few competitors in the market for delegated management of district heating networks would have a significant
impact on competition. The Autorité’s concerns focused on three local areas, which were already highly concentrated and
where the additions of market shares were significant. The decision was conditional upon behavioural remedies offered
by GDF SUEZ (i) to allow certain local authorities in these areas to unilaterally terminate their delegation contracts with
Ne Varietur, and (ii) to allow one competitor in the market to unilaterally terminate one of its subcontracts. Therefore the
Autorité preferred a free choice by the customers (in that case local authorities) to imposing divestiture remedies.
It remains to be seen how such innovative remedies could work in other cases, and what further innovative remedies the
Autorité’s merger practice will endorse in the coming years. What remains certain, however, is that in France, as before
many other competition authorities, a well prepared and explained set of remedies proposed in Phase I is the best way to
avoid Phase II proceedings for those cases that raise competition issues.
Key policy developments
Role held by the Minister for the Economy
As mentioned above, pursuant to the LME, the Autorité has now replaced the DGCCRF (a directorate reporting to the
Minister for the Economy) in terms of jurisdiction over merger control cases.
It would however be incorrect to state that, after the LME, the Minister for the Economy has lost all prerogatives in merger
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