Does the FCA really want to consider mergers below thresholds from an antitrust perspective?

In its widely commented decision no. 24-D-05, the French Competition Authority (FCA) ruled that mergers below the thresholds - in this case, 21 business transfers between three companies, leading to the withdrawal of two companies from two geographical areas - did not constitute an anti-competitive agreement.

In its press release, the FCA emphasizes the unprecedented nature of this decision, pointing out that this is the first review under antitrust law of mergers below the national notification thresholds, in application of the Towercast ruling of the Court of Justice of the European Union (CJEU).

In Towercast, the CJEU recognized the right of national competition authorities to apply Article 102 of the Treaty on the Functioning of the European Union (TFEU), prohibiting abuses of dominant positions, to mergers below the thresholds. In this ruling, the CJEU did not hesitate to refer on several occasions to Article 101 of the TFEU, prohibiting cartels, and to recall the principle of the direct applicability of primary law provisions, such as Article 102 - but also Article 101.

Thus, today’s FCA decision is half-tone: while it notes that the “direct effect” extends to the whole primary European law, including Article 101, and is obviously not limited to Article 102, and draws the logical conclusion that a non-notifiable merger can be analyzed under Article 101, it is only to immediately frame, not to say reduce, the application of Article 101 to quite exceptional cases: the anti-competitive object is de facto limited to what would amount to a genuine concealment of an agreement behind the screen of an M&A operation, i.e. a form of abuse of rights. As for the anti-competitive effect, this can obviously still be analyzed... provided that contemporary data are available, which was not the case here.

The FCA’s approach is commendable, as it formally applies the law by recognizing the applicability of Article 101, while drawing clear boundaries so as not to destabilize the M&A market.

In the end, the feeling remains that Article 101 is available for analyzing mergers, but that it is not an appropriate tool, except in quite exceptional cases of circumvention. In this respect, this decision provides some interesting insights into the criteria applied by the FCA to identify, or not, a dissimulation of a cartel behind an M&A transaction.

If you are interested in learning more about this decision, read the full briefing here:

• English version
• French version