Merger Control 2023 Comparisons

Merger control provisions are codified in Articles L.430-1 to L.430-10 and R.430-2 to R.430-10 of the French Commercial Code (CC).

The notification form mentioned in Article R.430-2 CC is available in annex 4.3 to 4.5 of the CC’s regulatory section.

The Autorité de la concurrence, the French Competition Authority (FCA), published in 2020 guidelines on merger control, available in French and English on the Authority’s website.

Regarding foreign investments in France, Articles L.151-1 to L.151-4 of the Monetary and Financial Code provide that an approval must be issued by the Minister of the Economy for operations concerning activities deemed essential for national interests. This applies in particular to the energy, water supply, transport, electronic communications, gambling and weapons production sectors (see 9. Foreign Direct Investment/Subsidies Review).

Concerning the audiovisual sector, the Law from 30 September 1986 contains several specific provisions. In particular, unless otherwise specified by international commitments, authorisation for a radio or television service may not be granted to a company in which more than 20% of the share capital or voting rights are held by foreign investors (Article 40). In the event of a Phase 2 examination (see 3.8 Review Process), the FCA must request an opinion from the Autorité de régulation de la communication audiovisuelle et numérique (ARCOM) (Article 41-4). In addition, any investor who holds any fraction greater than or equal to 10% of the capital or voting rights of a company holding a broadcasting authorisation is required to inform the ARCOM within one month of crossing this threshold (Article 38).

In the press sector, the Law of 1 August 1986 provides for specific rules. Firstly, unless otherwise specified by international commitments, foreign investors may not acquire more than 20% of the share capital or voting rights of a company editing a French-language publication (Article 7). Secondly, an investor may not control daily newspapers which represent more than 30% of the total circulation on the national market of similar publications (Article 11).

In the banking and insurance sectors, the FCA must seek an opinion from the Autorité de contrôle prudentiel et de résolution (ACPR) in the event of a Phase 2 review (Article L.612-22 of the Monetary and Financial Code). Any change in the share capital must be notified to this Authority (Articles L.322-4 and R.310-6-1 of the Insurance Code; Articles L.511-12-1 and L.531-6 of the Monetary and Financial Code). In the event of a direct or indirect acquisition or increase of shareholdings in an investment company or an insurance company, this authority must also issue an authorisation.

The FCA has had full merger control decision-making power since 2009 concerning the operations which do not meet the EU notification thresholds set forth by EU Regulation 139/2004 on merger control (EUMR) but do meet the French thresholds (see 2.5 Jurisdictional Thresholds). 

The FCA can therefore decide whether an operation will be authorised (subject to conditions or not) or prohibited, after a preliminary analysis or an in-depth examination (see 3.8 Review Process). Should a transaction substantially lessen competition, the parties may submit commitments in order to remedy or compensate for the anti-competitive effects (see 5.2 Parties' Ability to Negotiate Remedies). The FCA may also, for the same purpose, impose injunctions on the notifying parties. This injunction mechanism provided by Article L.430-7-III CC is specific to France.

The Minister of the Economy retains the power to call up the case and to issue a decision in cases where the Minister considers that reasons of general interest, other than maintaining competition, are at stake (see 3.8 Review Process).

In addition, the French Administrative Supreme Court (Conseil d’Etat) is the relevant court for judicial review and may, if need be, order interim measures (see 8.1 Access to Appeal and Judicial Review).

Where the relevant thresholds are met (see 2.5 Jurisdictional Thresholds), filing is mandatory without exceptions. 

The 'lack of effects' argument does not allow a different treatment of transactions. Fines imposed for failure to notify may result in penalties even where the effects of the transaction in France (if any) are limited (see 2.2 Failure to Notify).

Should a notifiable merger be implemented without prior notification, the FCA may first enjoin the undertakings concerned to file the transaction, subject to the payment of a daily penalty (the parties may also decide to demerge). The penalty cannot exceed 5% of the average daily aggregate of the undertakings concerned (Article L.464-2 CC).

The FCA may also impose fines on undertakings and individuals for failure to notify. For undertakings, this may result in penalties of up to 5% of the turnover generated in France during the last financial year. Moreover, the turnover generated in France by the target during that same period can also be taken into account (Article L.430-8 CC). The FCA can impose a fine only on the party which is responsible for notifying.

The French authorities have stated repeatedly that, in accordance with the Commercial Code, failure to notify must be sanctioned (eg, Decision 12-D-12 of 11 May 2012, Groupe Colruyt; Decision 13-D-01 of 31 January 2013, Groupe Réunica; Decision 13-D-22 of 20 December 2013, Castel Frères/Copagef; Decision 22-D-10 of 12 January 2022, COFEPP (see 10.1 Recent Changes or Impending Legislation)) and have imposed fines even in some cases where the market was not affected or competition on the affected markets was not significantly hindered (eg, Ministerial Letter No C2004-95 of 28 May 2004, Real Software).

To set a fine, the FCA takes into account the circumstances of the failure, such as the good or bad faith of the parties, the impact of the transaction on competition and the delay in filing the notification (if a notification was ultimately filed). On 28 January 2008, the Minister of the Economy, who was then in charge of merger control, imposed a rather low fine (0.0014% of the undertakings’ turnover) on SNCF Participations that had failed to notify the acquisition of Novatrans. The latest fine imposed by the FCA for failure to notify only (13-D-22 of 20 December 2013, Castel Frères/Copagef) amounts to EUR4 million.

The miscalculation of turnovers by the parties cannot justify a failure to notify (Ministerial Letter No C2006-103 of 8 December 2006, Pan Fish).

In the event of an omission or misrepresentation, the FCA will impose penalties and may decide to withdraw the authorisation initially granted. In such a case, the parties will be required, subject to periodic penalties, to file the transaction again within one month, unless they revert to the pre-merger situation.

Failure to notify is subject to the five-year limitation period of Article L.462-7 CC, starting from the date of change of control (eg, Decision 12-D-12 of 11 May 2012, Groupe Colruyt, confirmed by the Conseil d'Etat on 24 June 2013).

The concepts of concentration and change of control are similar under French and EU law. Mergers, acquisitions and creations of joint ventures may therefore constitute a concentration under French rules.

According to Article L.430-1 CC, “A concentration shall be deemed to arise where a change of control on a lasting basis results from:

• the merger of two or more previously independent undertakings or parts of undertakings, or
• the acquisition, by one or more persons already controlling at least one undertaking, or by one or more undertakings, whether by purchase of securities or assets, by contract or by any other means, of direct or indirect control of the whole or parts of one or more other undertakings."

The definition of a concentration is therefore very broad: a concentration may arise whenever an undertaking acquires sole or joint control, or takes over another undertaking, a part of an undertaking or a significant asset (such as a brand name, a production unit, a patent, etc) to which an activity and a turnover may be attributed.

Since the decisive element is the change of control, shareholders' agreements or amendments to the Articles of Association that do not provide for a transfer of assets or shares are concerned if they involve a change of control.

As under the EUMR, a change of control is necessary for a concentration to arise. The definition of control under French law is similar to that enshrined in the EUMR. Hence, according to Article L.430-1 CC, the control results from the rights, contracts and other means that provide, whether alone or jointly, and in view of the factual or legal circumstances, the possibility of exercising decisive influence on a company’s activity, and notably:

• ownership or enjoyment rights to all or part of a company’s assets; and/or
• rights or contracts that provide for a decisive influence on the composition, deliberations or decisions of a company’s bodies.

As under the EU law, joint control exists when two or more undertakings (or persons) do not have sole control, but have the ability, through veto rights for instance, to block actions that determine the strategic business behaviour of an undertaking.

A change in the quality of control occurs between joint-control scenarios before and after the transaction if, for instance, there is a change in the identity of controlling shareholders.

However, without the ability to impose decisions on its own, a shareholder may acquire a decisive influence on a company’s activity where it is the only shareholder able to block the strategic decisions of the company – so-called "negative exclusive control" (eg, Decision 12-DCC-98 of 20 July 2012, Société L Capital Management). 

It should be noted that, where an operation allows the holder of "negative exclusive control" to move to a position of "positive exclusive control", the status of the control is not considered to have been modified by the transaction.

According to Article L.430-2 CC, concentrations will be subject to the FCA’s scrutiny where the operation does not fall within the jurisdiction of the EU Commission pursuant to the EUMR and where two cumulative thresholds are met:

• the total aggregate worldwide turnover (net of tax) of all the firms or groups of natural or legal persons taking part in the merger exceeds EUR150 million; and
• the total individual turnover (net of tax) generated in France by at least two of the firms or groups of individuals or legal persons involved exceeds EUR50 million.

French law also provides for specific thresholds applicable to transactions in the retail sector, and to transactions concerning the French overseas "departments" or territories.

Retail

Where at least two of the undertakings concerned have a retailing activity, any transaction must be notified if the following three conditions are met:

• the total aggregate worldwide turnover (net of tax) of all of the companies or of all of the natural persons or legal entities involved in the merger exceeds EUR75 million;
• the total aggregate turnover (net of tax) achieved in France by at least two of the companies or groups of natural persons or legal entities concerned exceeds EUR15 million; and
• the transaction does not fall within the scope of the EUMR.

Overseas "Departments" or Territories

Where at least two of the undertakings concerned are totally or partly active in a French overseas department or territory excluding New Caledonia and French Polynesia, any merger transaction must be notified when the following three conditions are met:

• the total aggregate worldwide turnover (net of tax) of all the companies or of all the natural persons or legal entities involved in the merger exceeds EUR75 million;
• the total aggregate turnover (net of tax) achieved individually in at least one of the departments or territory concerned by at least two of the undertakings or groups of natural or legal persons concerned exceeds EUR15 million, or EUR5 million in the retail trade sector (without the need for this threshold to be reached by all the undertakings concerned in the same department or territory); and
• the transaction does not fall within the scope of the EUMR.

New Caledonia and French Polynesia are explicitly excluded from the scope of Book IV of the CC and have their own competition authority (see Article LP.431-2 of the New Caledonian Competition Code and Article LP.310-2 of the Polynesian Competition Code).

In France, the calculation of the jurisdictional thresholds follows the same method as on those provided in the EUMR and the Commission Consolidated Jurisdictional Notice of 21 February 2009. 

There is no obligation for the notifying parties to use a specific source for exchange rates (see the EU Commission’s rules on euro exchange rates).

As far as the method for identifying the adequate perimeter/parties and calculating the relevant revenues is concerned, Article L.430-2-V CC refers explicitly to Article 5 EUMR. EU rules, as explained by the Commission in its Consolidated Jurisdictional Notice of 21 February 2009, and is therefore applicable in this respect, and the revenue that is taken into account to assess the controllability of an operation differs according to the type of operation at hand:

• in the case of a sole control acquisition, the revenue taken into account is the whole of the group consolidated turnover for the acquiring party, and only the turnover of the target on the seller’s side;
• in the case of a merger, the revenue taken into account is the group consolidated turnover of all merging undertakings; and
• in the case of the acquisition of joint control over a joint venture, the revenue taken into account is the group consolidated turnover of all parent companies and, in the case of a pre-existing activity, the turnover of the joint venture itself.

Therefore, in accordance with the Commission’s practice, the part of turnover to be taken into account for partially owned subsidiaries, when jointly controlled with one or more other undertakings, should be apportioned to the number of jointly controlling parties (one half where there are two controlling parties, one third where there are three, and so on).

The calculation of the revenue is based on the verified accounts of the last financial year (available at the signing date, not the closing date). Turnover may be adjusted in the event of a lasting change in the economic reality of the parties since the end of the last financial year, to consider any acquisition, sale or closure of business that occurred before the transaction was signed. The FCA applies the same rules as the Commission with respect to the geographic allocation of turnover (that is, the location of the customer is generally the relevant criterion).

"Foreign-to-foreign" transactions do not receive any special treatment. Provided that a transaction meets the relevant merger control thresholds, it falls within the scope of French merger control rules (eg, Decision 12-DCC-83 of 13 June 2012, Humana). 

There is no need for the undertakings concerned to have a "local presence" for the French merger control to apply (eg, order of 4 July 2001, Boeing/Jeppesen).

There is no market share jurisdictional threshold in France.

The definition of joint venture under French rules is aligned with the one which is given by the EUMR. Joint ventures are caught by merger control provisions where they fulfil, on a lasting basis, all the functions of an autonomous economic entity (Article L.430-1 CC), that is, when they are "full-function" joint ventures within the meaning of EU law, with sufficient resources to operate independently on the market.

The FCA cannot review concentrations which do not meet the relevant thresholds, with the possible exception of a scenario involving co-operation with foreign competition authorities.

However, it should be noted that Article L.430-9 CC empowers the FCA, in cases where an abusive exploitation of a dominant position or of a state of economic dependency has been made possible by a merger operation, “to order the undertaking or group of undertakings in question to modify, complete or terminate within a fixed time limit, all agreements and actions resulting in the merger of economic power that have allowed the abuses” (free translation from French), even if these actions have already been assessed by the Authority under the merger control regime (see the sole tentative application of this prescription: Decision 02-D-44 of 11 July 2002, Compagnie générale des eaux).

Under Article L.462-7 CC, the FCA cannot investigate an operation after a period of five years from the date when the change of control materialises (see Decision 12-D-12 of 11 May 2012, Colruyt, confirmed by the Conseil d'Etat on 24 June 2013).

No transaction can be implemented before it has been approved by the FCA. Some exceptions are provided (see 2.14 Exceptions to Suspensive Effect and 2.15 Circumstances Where Implementation Before Clearance is Permitted), but in practice they are rarely applied by the FCA.

Transactions must not be completed prior to clearance by the FCA. In order to avoid "gun-jumping", parties are not allowed to exchange commercial information between the signing and the closing of the transaction.

Sanctions similar to those imposed in cases of failure to notify (see 2.2 Failure to Notify) may be imposed by the FCA on the notifying party, should it implement the transaction prior to receiving approval (sanctions for anti-competitive concerted practices could also be imposed). Recently, the FCA imposed a fine of EUR7 million on COFEPP for having carried out a concentration in the markets of spirit production prior to clearance (which was also fined for failure to notify in the same decision (see 2.2 Failure to notify and 10.1 Recent Changes or Impending Legislation))

Under Article L.430-4 CC, in exceptional "duly substantiated" circumstances (such as bankruptcy or public bid) parties may seek a derogation to implement the transaction without waiting for the approval from the FCA. The granting of such an exemption is by definition exceptional. Takeover offers involving firms in liquidation or judicial settlement generally receive one. Other extraordinary circumstances, such as the risk of imminent collapse of the target firm, can also justify the granting of such an exemption.

An application for derogation must be submitted with the notification or during the review process (but at least five days before the tribunal issues its decision in the event of the opening of collective proceedings). It must be attached to a notification file as complete as it can be; that is, including a presentation of the parties, the justification of the exemption request and a preliminary analysis of the transaction’s effects on competition.

The exemption granted does not prevent the Authority from an in-depth investigation of the undertaking, nor does it have any influence on the final decision. Theoretically, a transaction that was preliminarily granted an exemption may eventually give rise to remedies or can even be prohibited.

In cases of public takeover bids, public exchange offers or acquisitions of control through simple purchase of shares (on a regulated market without the launch of a takeover bid), the transfer of securities may occur before the FCA reaches a decision (see Article R.430-5 CC and 2020 Guidelines, Section 157). The effective implementation of such a transaction occurs only when the rights attached to the securities are actually exercised, but not during their transfer.

There is no local carve-out provision in France allowing a transaction to close outside of the jurisdiction. French law does not provide any specific circumstance allowing closing before clearance (apart from the exceptions detailed in 2.14 Exemptions to Suspensive Effect).

There is no specific deadline to notify a transaction. Nevertheless, as a transaction cannot be implemented before it is cleared by the FCA, it is in the interest of the parties to notify as soon as possible.

Filing may be done once the scope of the transaction is fixed and the project is sufficiently advanced to allow the FCA to investigate the file; that is, as soon as parties can assure the FCA of their intention to sign a firm agreement and can provide the proof of it (eg, a letter of intent or an agreement to conduct negotiations on an exclusive basis during a given period of time).

A notification can be made prior to signing a definitive or binding agreement. The 2020 Guidelines specify that whether a project is "sufficiently advanced” is assessed on a case-by-case basis. In general, the Authority may declare the notification of a proposed transaction admissible if the notifying party provides the FCA with evidence of its intention to enter into a firm commitment, indicating the object and terms of the transaction, the identity of the parties, its scope and provisional timetable.

There are no filing fees in France.

The notification is formally made by the acquiring party on its own. The seller/target is, nevertheless, involved in the completion of the notification form.

In the case of creation of a joint venture, all parent companies are responsible for the notification. In the event of the arrival of new shareholders acquiring joint control, all parties having joint control; even those who had already been subject to merger control before the transaction must notify jointly.

The notification must contain:

• a description of the transaction;
• a presentation of each undertaking and group concerned;
• a presentation of the relevant markets and the competitive analysis of the transaction (definition, market shares, competitive structure); and
• a statement assessing the accuracy and completeness of the information contained in the notification.

Article R.430-2 CC and the 2020 Guidelines, Section 192 provide details on the level of information required, which may be discussed during pre-notification talks and, in practice, is very similar to the information requested by the EU Commission in a Form CO.

In the case of so-called “affected market” (where the parties' combined market share is less than 25% in the case of a horizontal transaction or less than 30% in the case of a vertical or conglomerate transaction), the notification file must contain extensive documentation concerning these markets, including contacts of competitors, customers, suppliers and professional organisations present on these affected markets.

The notification and its appendices must be submitted in French. In practice, appendices may sometimes be submitted in English. Copies of agreement and board reports regarding the planned transaction, annual reports and accounts must be submitted with a notification.

Only one copy is required, which can also be transmitted, since 2021, in electronic form via the “Hermes” platform.

Lastly, in 2019, the Authority initiated an online notification procedure. This applies to certain transactions: 

• transactions in which the purchaser(s) operate(s) neither in the same markets as the acquired businesses (targets), nor in upstream, downstream, or related markets (which encompasses the majority of transactions conducted by investment funds);
• notifiable transactions concerning food distribution that do not entail a change of name for the affected retail store(s); and
• notifiable transactions concerning motor vehicle distribution.

For these operations, a form is available on the website "demarches-simplifiees.fr". Users are required to create an account which will be used for all pre-notifications or notifications.

Article L.430-8 CC provides that in the event of an omission or incorrect declaration in a notification, the FCA may impose a financial penalty on the persons who made the notification which, for legal persons, may not exceed 5% of their turnover in France during the last financial year (or EUR1.5 million in the case of natural persons). 

Nevertheless, the FCA rarely imposes penalties for incomplete notification but may request missing information. The review period shall not begin until the complete file has been received. An incomplete file thus delays the closing of the operation.

In the event of an omission or misrepresentation, penalties identical to the ones provided in cases of failure to notify apply (see 2.2 Failure to Notify). This fine may be followed by a withdrawal of the authorisation initially granted. In such a case the parties will be required, subject to periodic penalties, to re-submit a notification within one month, unless they revert to the pre-merger situation. The liability is upon the notifying parties.

The review of a concentration is similar under French and EU law. The FCA’s review may take place in one or two steps, depending on the existence of 'serious doubts' as to the compatibility of the transaction. 

Phase 1

All the transactions meeting the relevant thresholds are subject to a so-called "phase 1" investigation, lasting 25 working days from the day on which notification is deemed complete. This period may be extended for an additional 15 working days if the parties submit undertakings to remedy the anti-competitive effects of the operation. The parties may also use a "stop-the-clock" mechanism, lasting for up to 15 working days (eg, in cases where they need to implement undertakings). 

During phase 1, the FCA delineates the relevant market and assesses the effects of the transaction on competition and the admissibility of the commitments submitted by the parties, if any. For this purpose, it relies on documents provided by the parties. If necessary, a market test can be carried out by sending a questionnaire to players in the relevant market (consumers associations, competitors, suppliers, clients, etc).

At the end of phase 1, the FCA issues one of the following types of decision, which must be notified to the parties and to the Minister of the Economy:

• a decision stating that the operation is not caught by the merger control legislation;
• a decision authorising the concentration, with or without conditions; and
• a decision to initiate an in-depth examination if there are serious doubts that competition would have been harmed as a result of the transaction.

In cases where the FCA does not release a decision within the allotted time – 25 or 40 working days – the transaction is deemed tacitly approved. The Minister of the Economy can request that the FCA initiate a phase 2 investigation, based on Article L.430-7-1-I CC, within a five-working-day period from the expiration of the deadline.

Phase 2

A phase 2 investigation, once opened, must be carried out within 65 working days. Parties may submit their commitments, if any, at any time during the investigation. If the parties submit their commitments within 20 working days before the end of the investigation time limit, the investigation period will expire 20 working days after the receipt date of the commitments.

During phase 2, the FCA undertakes an in-depth analysis of the operation and produces a report on the parties, the relevant markets, the operation’s competitive analysis and the economic efficiency gains. If any, the commitments or corrective measures submitted by, or imposed on, the parties are assessed within this report. The parties and the Minister of the Economy may submit observations in response to the Authority’s report within 15 working days. A hearing is then organised by the FCA, during which case officers, the Rapporteur Général and the representative of the Minister of the Economy present their conclusions. Third parties may also be heard, after which they are requested to leave the hearing. The parties present their conclusions during the last part of the hearing.

At the end of phase 2, the FCA may release different decisions, the drafts of which are communicated to the parties in order for them to submit their observations within a reasonable timeframe (see Article L.430-7 CC). These include:

• a decision to authorise the concentration; and
• a decision to authorise the concentration with corrective measures imposed (injunctions) by the FCA or commitments submitted by the parties; and a decision to prohibit the operation that may, if necessary, require the parties to undertake all measures that will serve to re-establish sufficient competition.

If the FCA does not issue a decision by the deadline, then the transaction is tacitly approved.

After the FCA has issued its decision, the Minister of the Economy may then call up the case within 25 working days and make a decision on grounds of general interest other than competition (Article L.430-7-1 CC mentions industrial development, the competitiveness of the undertakings concerned in the context of international competition, or the creation or preservation of jobs). Introduced in 2008, this mechanism was firstly used on 21 June 2018 (concerning the Decision 18-DCC-95 of 14 June 2018, Cofigeo). On 19 July 2018, the Minister of the Economy authorized the operation in question without divestments in consideration of the significant risk in terms of employment.

As under the EUMR, a 'stop-the-clock' procedure is provided  by Article L.430-7 CC. The deadline may therefore be suspended:

• for up to 20 working days, upon request from the notifying parties (for example, in order to finalise commitments); or 
• by the FCA on its own initiative, when the parties to the transaction and/or third parties have failed to communicate information requested by the FCA. 

In this case, there is no maximum suspension deadline but “the time limit shall be resumed as soon as the reason for its suspension is eliminated.”

The review procedure cannot be sped up. However, in practice, the FCA may issue a decision on straightforward cases before the regulatory deadline for phase 1 has expired. Furthermore, pre-notification discussions allow the acceleration of the FCA’s assessment of the operation and the mitigation of the risk of submission of an incomplete file (see 3.6 Penalties/Consequences of Incomplete Notification and 3.9 Pre-notification with Authorities).

Pre-notification discussions, which are strictly confidential, are highly recommended and encouraged in most cases, although the FCA states that they are not necessary in all cases (2020 Guidelines, Sections 191-200). 

Such pre-notification consultations lower the risk of submitting an incomplete file and allow acceleration of the FCA’s assessment of the operation.

One of the possible outcomes of a pre-notification consultation is the release by the FCA of a comfort letter when the concentration does not fall within the scope of the merger review.

Requests for information during the review process are very frequent and can be burdensome in the case of complex transactions. 

Article L.430-5 CC specifies that the FCA may suspend the time limit where the notifying parties have failed to provide it with all or part of the requested information within the time limit.

A simplified procedure was created by the 2020 Guidelines (Sections 230-233). In this case, the parties provide a lighter version of the notification file, containing (2020 Guidelines, Section 231):

• the financial data for the most recent financial year only (not the last three years); and
• without a list and description of the activities of the companies with which the parties have significant and lasting contractual links on the markets.

The simplified procedure is open to: 

• companies that process a large number of notifications per year (eg, investment funds and major retail companies), which provide a common set of information in an electronic format (2020 Guidelines,  Section 229);
• operations that raise no competition concerns, ie, in case of: 
1. a combined market share of less than 25%;
2. increments of less than two points for a combined market share of less than 50%;
3. a combined market share in a vertical or related market of less than 30%;
4. acquisition of exclusive control by a company already holding joint control over its target;
5. the creation of a full-function joint venture operating exclusively outside France; and
6. a transaction involving the acquisition of joint control of a real estate asset in the state of future completion (VEFA).

In these cases, the FCA issues its decision within 15 working days on average.

Article L.430-6 CC provides that “the Competition Authority shall examine whether the concentration is likely to adversely affect competition, particularly by creating or reinforcing a dominant position or by creating or reinforcing a purchasing power which places suppliers in a situation of economic dependence” (free translation from French).

The test applied by the FCA is very similar to that used by the EU Commission (see 4.2 Markets Affected by a Transaction).

According to the annex 4.3 (see 1.1 Merger Control Legislation), a relevant market is considered to be affected:

• if two or more of the companies involved in the transaction are active on this market, and their combined market shares reach 25% or more; or
• if at least one of the companies involved in the transaction is active on this market, and another of these companies is active on an upstream, downstream or related market, whether or not there is a supplier-customer relationship between these companies, provided that, on either of these markets, the combined share of the companies or groups referred to in point 2 is 30% or more.

A market may also be affected by the disappearance of a potential competitor as a result of the transaction.

In the case of an affected market, the notification file must contain a competitive analysis of the effects of the operation on the affected markets: (i) an estimate of the size of the market (in value and volume), (ii) the market shares of the parties and their competitors, (iii) details of their competitors, main customers and suppliers, (iv) cooperation agreements entered into by the parties, (v) a description of the factors likely to affect market access, (vi) a description of existing distribution channels and after-sales service networks, (vii) the main factors contributing to the determination of prices and their evolution, (viii) an estimate of the production capacities existing on the market and their average rate of utilisation, including by the parties, (ix) an analysis of the structure of demand and (x) the list and contact details of the main professional organisations.

The FCA considers that post-operation market shares of 50% or more suggest the existence of significant market power. Conversely, where one of the parties to the transaction has an extremely small market share (generally less than 2%), the FCA considers that the transaction will not a priori harm competition, unless these market shares strengthen an already very strong position or the transaction results in the disappearance of a maverick. 

The FCA regularly takes into account its previous decisions, particularly with respect to market definitions and effective commitments. Previous decisions of the EU Commission and other national competition authorities may also be taken into consideration.

The FCA is competent to investigate all competition concerns. Its review will analyse: 

• horizontal effects (Decision 18-DCC-18 of 1 February 2018, Concept Multimedia, Decision 17-DCC-169 of 20 October 2017, Cooperl Arc Atlantique; Decision 17-DCC-174 of 24 October 2017, Établissement Ciffréo et Bona);
• vertical effects (Decision 17-DCC-56 of 4 May 2017, Bridgestone; Decision 17-DCC-76 of 13 June 2017, SFR Group);
• conglomerate effects (Decision 18-DCC-95 of 14 June 2018, William Saurin, Decision 17-DCC-53 of 25 April 2017, Trigano; Decision 17-DCC-76 of 13 June 2017, SFR Group);
• disappearance of potential competitor (Decision 17-DCC-42 of 3 April 2017, Eco-emballages); and
• risks of co-ordination of competitive behaviour (Decision 17-DCC-72 of 30 May 2017, Arterris).

Article L.430-6 CC provides that the FCA shall assess whether the concentration makes a sufficient contribution to economic progress to compensate for the adverse effects on competition. The case law of the Conseil d'Etat and decision-making practice have identified three criteria for taking into account economic efficiency gains: these gains must be quantifiable and verifiable, they must be specific to the concentration, and a part of these gains must be transferred to consumers (2020 Guidelines, Section 770).

In very exceptional cases (the "failing firm defence", 2020 Guidelines, Sections 785-797), a transaction which has an adverse effect and where the economic efficiency gains are insufficient to outweigh that anti-competitive effect may nevertheless be permitted if the firm being purchased is a failing firm, if there is no better acquirer from the perspective of competitive analysis and if the anti-competitive effect would not be less harmful if the firm were to disappear (see Conseil d’Etat, 6 February 2006, Moulinex).The FCA accepted such a defence only once, in the But/Conforama case (Decision 22-DCC-78 of 28 April 2022 (see 10.1 Recent Changes or Impending Legislation)). 

To date, non-competition issues are not taken into consideration by the FCA. Nevertheless, if the Minister of the Economy decides to call up the case, the Minister may decide on grounds of general interest other than competition, including industrial policy or labour policy (see 3.8 Review Process). In practice, this procedure remains exceptional (to date, only one application).

Full-function joint ventures are analysed by means of the same substantive test as other concentrations, without special consideration. Nevertheless, as indicated in 4.2 Markets Affected by a Transaction, the FCA will analyse the risks of co-ordination between the parent companies.

Under Article L.430-7 CC, the FCA may prohibit a transaction, after a thorough examination in phase 2, if it raises competition concerns and the commitments offered by the parties are not sufficient. While the EU Commission has rendered a rather important number of decisions prohibiting concentrations, the FCA has issued only two prohibition decisions (Decision 21-DCC-79 of 12 May 2021, Société du Pipeline Méditerranée Rhône; Decision 20-DCC-116 of 28 August 2020, Soditroy: see 8 2 Typical Timeline for Appeals).

This can be explained by the fact that French authorities may impose corrective measures (injunctions) on undertakings to remedy or compensate for anti-competitive effects, whereas the EU Commission does not have such a power. Furthermore, it is common practice in France for undertakings to withdraw their notifications in order to avoid a prohibition decision: the withdrawal in September 2022 of the merger between TF1 and M6, two major French TV channels, is a striking example (press release from the FCA, 16 September 2022).

Between 2009 and June 2023, only 3.3% of authorisation decisions were subject to conditions (commitments or injunctions).

In addition to its sanction powers (see 2.2 Failure to Notify), the FCA can also compel the undertakings concerned to obey the conditions/obligations imposed and to withdraw the clearance decision, unless the undertakings revert to their pre-merger status.

On 27 July 2018, the FCA imposed a penalty of EUR20 million on Fnac Darty for failing to complete the sale of three stores, which was one of the conditions attached to its green light to the merger. The Authority also ordered Fnac Darty to sell two other stores (Decision 18-D-16).

The seriousness of the infringement may, however, lead the FCA to withdraw its decision and fine the parties under Article L.430-8 CC (eg, Decision 11-D-12 of 20 September 2011, TPS–CanalSatellite, in which the Authority imposed a fine of EUR30 million on Groupe Canal Plus because of its failure to comply with the offered commitments). In this case, the Vivendi and Canal Plus groups refiled a merger notification to the FCA for the TPS–CanalSatellite acquisition operation. During the renewed merger review, the FCA considered that the offered commitments were insufficient, and thus ordered binding injunctions for a renewable period of five years (decision 12-DCC-100 of 23 July 2012, TPS–CanalSatellite).

The parties to the transaction may propose remedies for potential competition issues in phase 1 or in phase 2. The FCA, and the Minister of the Economy, should he decide to call up the case pursuant to Article L.430-7-1 CC, may impose binding remedies. Furthermore, remedies may be discussed at the pre-notification stage in order to anticipate any possible future request during the official assessment of the proposed transaction.

During phase 1, such an offer can be put forward at any time between the notification of the transaction and the first 25 working days. It has the effect of extending the phase 1 period by an additional 15 working days. A "stop-the-clock" mechanism of up to 15 working days may also be used by the parties in cases where they need further time to implement undertakings (see 3.8 Review Process).

In phase 2, commitments may be proposed by the parties at any time during the 65 working days of the phase 2 investigation. Where such undertakings are offered more than 45 days after the beginning of phase 2, it is extended by 20 working days from the date the commitments were proposed. A "stop-the-clock" procedure may be used by parties, but also by the FCA at its own discretion, when the parties have informed the Authority of the occurrence of a new fact or when the Authority is awaiting information requested from the parties or from third parties.

To be accepted by the FCA, remedies have to fulfil the criteria set out in Sections 351-470 of the 2020 Guidelines, which are similar to the EU Commission guidelines on remedies; that is, they must be effective, easy and quick to implement, and easy to monitor.

The commitments proposed by the parties must be listed exhaustively in a commitment letter. In the case of disinvestments, the parties must provide guarantees to ensure, during the transitional period between the authorisation of the transaction and the completion of the transfers, the independence, economic viability, value and competitiveness of these assets. For behavioural commitments, the parties must demonstrate their operational feasibility and the means proposed to ensure their verification (Guidelines 2020, Section 278).

The FCA is likely to accept both structural and behavioural remedies.

Structural remedies must guarantee the independence, economic viability, value and competitiveness of the assets during the transitory period between the authorisation of the transaction and the completion of the disposals.

Behavioural remedies shall be operationally feasible, and parties must provide means to ensure their verification.

It is worth noting that, although the FCA favours structural remedies, it gives priority to a pragmatic approach and to the best efficiency of its decisions and is open to non-structural remedies or innovative remedies other than mere divestment of all or part of businesses. For instance, in the Veolia Transport/Transdev case (Decision 10-DCC-198 of 30 December 2010, Veolia Environnement/CDC), the FCA approved the innovative commitment of the notifying parties to set up a fund designed to enhance competition in the urban transport services sector by financing: 

• compensation for unsuccessful bidders by public transport authorities; and 
• consulting services purchased by the public transport authorities to assist them in the design of the relevant documents (request for proposal, specifications, and so on) and the implementation of their bidding processes in view of the structural effect of such remedies on the market.

Notifying parties may submit commitments throughout the procedure, either during the pre-notification discussions or formally in phase 1 or 2, spontaneously or at the invitation of the FCA.

The commitments proposed by the parties must be listed exhaustively in a commitment letter (see 5.3 Legal Standard). Their implementation must be certain and controllable. It is up to the parties to propose a specific monitoring system to ensure that the commitments are properly implemented. Annexes F and G of the 2020 Guidelines provide a standard form of divestiture commitments and a standard form of trustee monitoring mandate. 

The FCA initiates a market test (involving competitors, clients and suppliers of the notifying parties) after receiving the proposed remedies to assess if they are appropriate. 

In case of an "up-front buyer" remedy, the parties may only conclude the transaction after having signed a binding agreement for the sale of the business with a purchaser approved by the FCA. This reinforces the Authority's belief that the business will indeed be sold to a suitable purchaser before the closing of the main transaction begins to affect competition on the market. By contrast, in a "fix-it-first" remedy, the buyer and the transaction documents are approved by the FCA in the decision to clear the main transaction. Such a solution is especially chosen in cases where, from the outset, there appears to be only a very limited number of suitable potential buyers.

If the FCA considers that the parties have not fulfilled a commitment contained in its decision within the time limit, it may: 

• withdraw the clearance decision; 
• require the parties to fulfil the obligation which were not fulfilled and to do so within a time limit or impose injunctions or prescriptions in substitution for the obligation not fulfilled (with a penalty in the form of a daily payment up to 5% of the parties’ daily turnover); or 
• impose a financial penalty up to 5% of the turnover generated in France during the last financial year (Article L.430-8 CC). 

Since 2015, the Minister of the Economy has had the same power in cases where commitments imposed in its decision are not fulfilled (Article L.430-7-1 CC).

Decisions are communicated to the notifying parties and published on the FCA’s website as well as in the electronic version of the Official Bulletin of Competition (Article D.430-8 CC). If the decision includes business secrets, only a non-confidential version is published. A press release is typically issued within five working days of the date of the decision (Article R.430-6 CC).

Foreign mergers are not exempt from the FCA's control procedure and the possibility that it may require corrective measures. Behavioural injunctions were imposed in the Boeing/Jeppesen case (Order of 4 July 2001) and a commitment to sell was validated during the GE/Invision Technologies merger (Letter from the Minister of Economy No C2004-098 of 2 August 2004). However, there have been no recent decisions with commitments concerning foreign-to-foreign transactions.

Ancillary restraints are automatically covered by clearance decisions.

Notifying parties are not obliged to bring the existence of ancillary restraints to the attention of the FCA. Nevertheless, they may have an interest in drawing its attention to the existence of a restriction whose compatibility with competition law may give rise to doubts, having regard to its form, scope or combination with others, or to the competitive context of the market or markets concerned (2020 Guidelines, Section 800). If the FCA deems that the restrictions cannot be considered directly related and necessary to the implementation of the concentration, Articles L.420-1 and L.420-2 CC remain potentially applicable.

Third parties (eg, customers, competitors, complainants, etc) cannot formally ask for corrective measures or access to the FCA file. More generally, they cannot submit any complaint related to a concentration. However, they play a role at every step of the review.

For example, third parties are involved in the notification: the notice published by the FCA on its website within five working days from the receipt of the notification allows them to comment on the transaction during a certain period. The period for third parties’ comments generally lasts for 15 days. Third parties may also be requested to answer questionnaires during a market test or may spontaneously decide to provide the FCA with information. In accordance with Article L.430-10 CC, third parties may request confidentiality for their replies to questionnaires, as well as for their spontaneous comments sent to the FCA. The FCA is not bound by the opinions of third parties.

In most cases, during phase 1 and phase 2 investigations, the FCA sets up a market test (particularly in cases where the transaction is likely to raise competition issues or takes place in a market which has never been analysed by the FCA or was analysed a long time ago). To that purpose, third parties are requested to answer questionnaires on the transaction, the relevant market, the undertakings concerned by the transaction and the foreseen corrective measures.

Another way for the FCA to involve third parties in the procedure is to request from them documents that are useful to the review of the transaction (Articles L.450-1 and L.450-3 CC). 

The FCA may hear third parties during the hearing session (Article L.463-7 CC). The work councils of the companies involved in the transaction may, if it is required, be heard by the FCA under the same conditions as third parties.

The FCA publishes on its website a notice with a description of the transaction within five working days of the receipt of the notification.

In addition, pursuant to Article L.463-4 CC and Article R.463-15-1 CC, the persons providing information to the FCA shall at the same time inform it which information constitutes business secrets, and provide a non-confidential version and a summary of the documents or elements in question.

At the international level, the FCA is a member of networks such as the International Competition Network, which allows co-operation between competition authorities, mainly on general policy matters. 

The FCA is also a member of the European Competition Network (ECN), which allows co-operation between EU National Competition Authorities (NCAs) as well as an effective and consistent application of EU competition law. In the ECN, NCAs ensure that they have matching information and exchange views on the operations, on the characteristics of the markets concerned, and on the remedies envisaged, thereby limiting the risks of conflicting decisions.

The FCA may, through the ECN, exchange documents and information with other NCAs. Nevertheless, at the pre-notification discussions stage, the FCA must seek the parties’ permission to share business secrecy (2020 Guidelines, Section 346).

Appeals against the FCA’s decisions may be brought by both the notifying party and third parties, within two months of the notification or the publication of the decision on the FCA’s website, before the French Administrative Supreme Court (Conseil d’Etat).

Both the notifying party and third parties may also request interim measures to the Conseil d’Etat and ask for the suspension of the execution of the decision, by using the so-called référé-suspension. The suspension will be granted if evidence of urgency and of the existence of a serious doubt as to the legality of the decision are brought.

The review by the Conseil d’Etat is generally short (on average about six months).

A successful appeal may be grounded on the lack of examination by the controlling authority of all the anti-competitive effects that were likely to result from the operation (eg, Conseil d’Etat, 31 January 2007, EBRA/Delaroche).

To date, the Conseil d’Etat has cancelled only a few decisions authorising a transaction, notably for violation of the rights of defence in the case of breach of the procedure (Conseil d’Etat, 9 April 1999, No 191654, Société Interbrew) and for the incorrect application of the merger control rules in a concentration case in the press sector (Conseil d’Etat, 31 January 2007, No 294896, Société France Antilles). But in most cases the Conseil d'Etat confirms the FCA's decision (see for instance Conseil d’Etat, 22 July 2022, number 436274, Société Antillaise Frigorifique)

The Conseil d'Etat recently upheld the first prohibition decision handed down by the FCA (Conseil d’Etat, 14 October 2022, number 445680, Soditroy et ACDLec).

Once the clearance decision is obtained, third parties having an interest to act (that is, who are adversely affected by the decision) may appeal to the Conseil d’Etat within two months of the day on which the decision is published on the FCA’s website. For example, in its decision of 23 December 2013 (Société Métropole Télévision), the Conseil d’Etat annulled the clearance of the operation after an appeal of two competitors.

Third parties may also request interim measures from the Conseil d’Etat in order to obtain the suspension of the execution of the decision.

The PACTE Law of 22 May 2019 has brought about significant changes to the regulation of foreign investments in France. To obtain prior authorisation from the Minister, an investment operation must meet three cumulative criteria.

• The first criterion pertains to the nationality and tax residency of the investor. According to the regulations, foreign investors encompass individuals or legal entities of foreign nationality, as well as French individuals who are not tax residents in France.
• The second criterion concerns the nature of the investment. Controlled operations include the acquisition of control over a French entity, the purchase of all or part of a business unit, and, for non-European Union or European Economic Area investors, crossing the thresholds of 25% of voting rights in a French entity or 10% in a French company with listed securities on a regulated market.
• The third criterion involves sensitive activities. Investments made in sectors determined by decree, which have the potential to undermine public order, public security, or national defence interests, are subject to control.
• Failure to obtain the required authorisation for an investment activity renders any commitment, agreement, or contractual clause associated with the investment null and void.

Authorisation must be sought when the investment project has reached an advanced stage, such as after the drafting of a preliminary acquisition contract or its conclusion with suspensive conditions. Applications are typically submitted electronically to IEFautorisations@dgtresor.gouv.fr. Alternatively, they may be sent via registered mail with acknowledgment of receipt to the Directorate General of the Treasury.

The documentation is primarily prepared in French, except for the notification form to the European Commission, which is in English. It should contain specific information regarding the investor, the target entity of the investment, and the investment project, as outlined in the decree dated by 31 December 2019. A standardised file can be accessed on the website of the Directorate General of the Treasury.

The Ministry of Economy issued guidelines on the matter in September 2022.

There have been no significant legislative changes to report. However, it is noteworthy to mention the publication of Decree 2019-339 on 18 April 2019, which streamlines the notification procedure by requiring the submission of a single form instead of four. In addition, it raised the threshold for a market to be considered “affected” by the vertical or conglomerate effects of a transaction from 25% to 30%. The FCA has also introduced an online notification option for simplified notifications.

Furthermore, there have been some important recent decisions (the first application in France of certain merger control provisions).

In 2020 and 2021 the FCA issued its two first prohibition decisions (Decision 20-DCC-116 of 28 August 2020, Soditroy and Decision 21-DCC-79 of 12 May 2021).

On 12 April 2022 the FCA imposed for the first time a penalty for failure to notify and breach of the obligation not to proceed to the transaction before authorisation (Decision 22-D-10). These two obligations are set out in I and II of Article L.430-8 CC. This decision comes in the wake of the ECJ judgment released on 24 April 2020 (ECJ, April 24, 2020, Marine Harvest ASA, Case C-10/18 P).

On 27 April 2022 the FCA authorised a merger (between Bio Pôle Antilles and Inovie) under the condition that the acquirer renounces another operation, which did not however constitute a “concentration”, namely the acquisition of a non-controlling stake in Synergibio, Bio Pôle Antilles' only rival in the region. The FCA’s press release states that "given its sufficiently certain nature, this proposed acquisition of a non-controlling minority shareholding had to be taken into account in the analysis of the effects of the transaction at local level" (Decision 22 DCC 35).

On 28 April 2022 the FCA accepted for the first time the “failing firm defence” (Decision 22 DCC 78). The FCA granted approval for the transaction between Conforama and Mobilux without any accompanying remedies, based on three key factors. Firstly, the FCA acknowledged the severe financial challenges faced by Conforama. Secondly, it took into consideration the absence of any alternative offers to Mobilux that would have had a lesser impact on competition. Lastly, the FCA recognised that the acquisition would preserve market diversity and thus inflict less harm compared to the potential loss of Conforama.

The vast majority of decisions are authorisation decisions without remedies. In 2022, the Authority issued 253 authorisations without remedies, five with remedies, and none prohibition.

Similarly, merger control fines (eg, for failing to notify or gun jumping) are still very rare (one in 2022).

Regarding notable trends in merger control review and enforcement and the current competition concerns of the authorities, these three points should be noted:

• The introduction of an ex-post control for sub-threshold transactions. Towercast lodged a complaint before the FCA against TDF, challenging TDF's takeover of Itas, a transaction for which the notification thresholds were not exceeded. The FCA considered that such a merger could not constitute an abuse of a dominant position (Decision 22-D-01 of 16 January 2020). A preliminary question was subsequently referred to the ECJ, which ruled, in a judgment of 16 March 2023, that an authority could review a concentration ex-post by applying the provisions on abuse of dominant position.
• The Commission's new policy under Article 22 of the Merger Regulation which now allows Member States to refer a case to the Commission even when national thresholds are not reached. France (along with other Member States) referred the Illumina-Grail merger to the Commission. 
• The publication of the FCA’s priorities for 2023/2024, specifying that it will focus on buying power, digital and ecological transition. The implementation of such priorities in terms of merger control is, however, not specified.