French merger control legislation can be found within the French Commercial Code (FCC) from Articles L. 430-1 to L. 430-10 and R. 430-2 to R. 430-10.

In 2020, the French Competition Authority (FCA) published new guidelines (the “Merger Control Guidelines”) replacing the previous guidelines published in 2013. They are available on the FCA’s website, both in French and in English.

Council Regulation (EC) No 139/2004 of 20 January 2004 on the control of concentrations between undertakings (the “EU Merger Regulation”) contains certain provisions that are directly applicable in France (Articles 1, 5, 4.4, 4.5, 9 and 22).

While not directly applicable, the FCA refers, for the sake of consistency, to concepts mentioned in the EU Merger Regulation and relevant European Commission communications and decision-making practice.

Foreign direct investments in activities participating in the exercise of public authority or activities that are likely to jeopardise public order, public safety or national defence interests require a prior approval from the Minister of Economy (See 9. Foreign Direct Investment/Subsidies Review).

Specific regulatory rules also apply to certain sectors.

The banking and insurance sectors fall within the jurisdiction of the Prudential Supervision and Resolution Authority (ACPR). In case of a merger control in-depth review (Phase II) of a transaction subject to the control of the ACPR, the FCA shall seek its opinion (Article L. 612-22 of the French Monetary and Financial Code). In addition, changes in the ownership structure of credit institutions, finance undertakings, investment undertakings, insurance undertakings or pension funds must be notified to the ACPR (Articles L. 511-12-1 and L. 531-6 of the French Monetary and Financial Code; Article L.322-4 and L.511-12-1 of the French Insurance Code).

The audiovisual sector is notably governed by Law No 86-1067 of 30 September 1986 and falls within the jurisdiction of the Authority for Audiovisual and Digital Communication (ARCOM). There are several regulations regarding the shareholding of undertakings active in this sector. For instance, the authorisation for a radio or television service broadcast in French cannot be granted to a company in which more than 20% of the share capital or voting rights are held, directly or indirectly, by persons of foreign nationality, unless authorised by international agreements (Article 40). In case of in-depth review of a transaction subject to the control of the ARCOM, the FCA shall seek its opinion.

In the press sector, Law No 86-897 of 1 August 1986 provides that, unless authorised under international agreements, persons of foreign nationality may not acquire more than 20% of the capital or voting rights of an undertaking publishing in French. Moreover, an entity may not acquire daily newspapers representing more than 30% of the national diffusion of publications of the same nature.

French merger control legislation is enforced by the FCA, an independent administrative authority.

In addition, the Minister of Economy has the power to request the opening of an in-depth review (Phase II) and, once the FCA adopts a final decision after a Phase II investigation, a call-in power for reasons of general interest other than competition reasons (referred to as “Phase III” in practice). In case of in-depth investigation (Phase II), the Ministry of Economy is a recipient of the report prepared by the FCA and may present written and oral observations to the FCA (see 3.8 Review Process).

Any appeal made against a merger decision of the FCA is brought before the French Administrative Supreme Court (Conseil d’Etat) (see 8. Appeals and Judicial Review).

Notification is compulsory provided that the jurisdictional thresholds are met.

If a party fails to notify a merger, the FCA may order the parties to file a notification unless the parties demerge (Article L. 430-8, I FCC). The FCA may also impose a daily penalty up to 5% of the daily average aggregate worldwide turnover of the party concerned (Article L. 464-2, II FCC).

Failing to notify a transaction exposes the parties in charge of the notification to fines of up to 5% of their turnover excluding taxes achieved in France during the last financial year and, for individuals, a fine of up to EUR1.5 million. The fine can be increased up to the turnover achieved by the target in France during the same period (Article L. 430-8, I FCC).

Since its creation in 2009, the FCA has imposed several fines for failure to notify (Decisions No 12-D-12; No 13-D-01; No 13-D-22). In its latest decision No 22-D-10 of 12 April 2022, the FCA fined COFEPP up to EUR7 million for acquiring control of MBWS without prior notification.

The FCA’s decisions are published on its website. In addition, the FCA can impose the publication of the decision on the company’s website or in a newspaper.

A five-year limitation period from the date of the change of control is applicable to failures to notify (Article L.462-7 FCC).

French merger control catches any transaction leading to a lasting change of control, where:

• two or more previously independent undertakings merge;
• one or several persons already have control over at least one undertaking or when one or several undertakings acquire control over all or part of one or several other undertakings, directly or indirectly, whether through the acquisition of shareholdings, assets, contracts or any other means; or
• the creation of a joint venture that performs on a lasting basis all the functions of an autonomous economic entity.

Therefore, shareholders’ agreements or changes to the articles of association may be assessed by the FCA if they lead to a change of control.

The definition of control used in French law is the same as in European merger law. Control over an undertaking occurs where the controlling undertaking has the possibility to exercise decisive influence over the activity of the controlled undertaking. Acquisition of control allows the acquirer the right to adopt, or to block through veto rights, strategic decisions of another undertaking. Strategic decisions generally relate to the right to appoint/remove top management as well as to adopt the business plan, the budget and/or certain investments.

Control can take several forms such as sole control, joint control, de jure control, de facto control as well as positive or negative control.

Acquisition of a minority interest can be caught regardless of the level of acquisition if it entails a lasting change of control over an undertaking. However, acquisitions of minority or other interests which do not result in a change of control are not caught.

General Thresholds

A filing is required provided the three following cumulative thresholds are met (Article L. 430-2 I. FCC).

• The total worldwide turnover (excluding taxes) achieved by the undertakings or group of natural or legal persons parties to the concentration exceeds EUR150 million.
• The total turnover (excluding taxes) achieved in France by at least two of the undertakings or group of natural or legal persons concerned exceeds EUR 50 million.
• The transaction falls out of the scope of the the EU Merger Regulation.

Retail Sector

Special jurisdictional thresholds apply where at least two of the parties to the concentration operate one or more retail shops (Article L. 430-2 II. FCC).

• The total worldwide turnover (excluding taxes) achieved by the undertakings or group of natural or legal persons who are parties to the concentration exceeds EUR75 million.
• The total turnover (excluding taxes) achieved in France by at least two of the undertakings or group of natural or legal persons who are parties concerned in the retail sector exceeds EUR15 million.
• The transaction falls out of the scope of the the EU Merger Regulation.

Overseas Territories

Specific thresholds also apply when at least one of the parties to the concentration carries on all or part of its business in one or more overseas departments (ie, Guadeloupe, Martinique, French Guiana, La Réunion), in the Department of Mayotte, in the Wallis and Futuna Islands or in the overseas territories of Saint-Pierre-et-Miquelon, Saint-Martin and Saint-Barthélemy (Article L. 430-2 III. FCC).

• The total worldwide turnover (excluding taxes) achieved by the undertakings or group of natural or legal persons who are parties to the concentration exceeds EUR75 million.
• The total individual turnover (excluding taxes) achieved in at least one overseas department or overseas territory concerned by at least two of the undertakings or group of natural or legal persons concerned exceeds EUR15 million or EUR5 million in the retail sector, it being specified that it is not necessary for this threshold to be reached by all the companies concerned in the same department or territory.
• The transaction falls out of the scope of the EU Merger Regulation.

A legislative proposal to increase the French merger control thresholds is currently under discussion before French Parliament (for further information, see the France Trends & Developments chapter in this guide).

Calculation of the Turnover

Pursuant to Article L. 430-2 FCC, turnover must be calculated in accordance with Article 5 of the EU Merger Regulation.

The turnover relates to the amounts derived in the preceding financial year of the transaction from the sale of products and the provision of services falling within ordinary activities (ie, the turnover achieved in the normal course of business). The turnover to be considered is “net” turnover, after deduction of sales rebates and of value added tax and other taxes directly related to turnover. Sales rebates cover all rebates or discounts which are granted by the undertakings to their customers, and which have a direct influence on the amounts of sales. Intra-group transactions must be excluded.

Conversion of the Turnover in Euros

The FCA refers to the rules regarding the conversion of turnover into euros which are specified in the Consolidated Jurisdictional Notice under Council Regulation (EC) No 139/2004 on the control of concentrations between undertakings. The annual turnover of the notifying party should be converted at the average rate for the twelve months concerned. The parties shall use the European Central Bank’s rates.

According to Article L. 430-2 FCC, the calculation of jurisdictional thresholds follows the method provided by Article 5 paragraph 4 of the EU Merger Regulation.

The turnover taken into account shall comprise:

• the group consolidated turnover of all the merging undertakings for mergers;
• the acquirer’s group consolidated turnover and the turnover of the target in case of acquisition of sole control; or
• the group consolidated turnover of all the parent companies and the turnover of the joint venture itself if it has a pre-existing activity in the case of a joint venture.

The aggregate turnover of an undertaking shall comprise the turnover of:

(a) the undertaking concerned;

(b) those undertakings in which the undertaking concerned, directly or indirectly: (i) owns more than half the capital or business assets, or (ii) has the power to exercise more than half the voting rights, or (iii) has the power to appoint more than half the members of the supervisory board, the administrative board or bodies legally representing the undertakings, or (iv) has the right to manage the undertakings’ affairs;

(c) those undertakings which have in the undertaking concerned the rights or powers listed in (b);

(d) those undertakings in which an undertaking as referred to in (c) has the rights or powers listed in (b);

(e) those undertakings in which two or more undertakings as referred to in (a) to (d) jointly have the rights or powers listed in (b).

With respect to undertakings jointly controlled (in which the undertakings have the rights and powers listed in (b), their turnover shall be apportioned equally amongst the undertakings concerned, irrespective of the percentage of capital or voting rights they hold.

The seller’s turnover is included in the calculation of thresholds only if it retains control over the target.

The turnover must be adjusted to take into account permanent changes in the economic reality of the undertakings concerned, such as acquisitions or divestments which are not or not fully reflected in the audited accounts (Merger Control Guidelines, paragraph 128).

A “local effects test” is not required under French merger control. Foreign-to-foreign transactions fall under the jurisdiction of the FCA if the jurisdictional thresholds are met, regardless of an absence of a local presence in France. A filing can be required even though a target has no sales and/or assets in France if, for instance, at least two of its controlling parent companies meet the jurisdictional thresholds or the acquisition of the target is part of a single concentration involving several transactions which overall exceed the jurisdictional thresholds.

French merger control does not have market share jurisdictional thresholds.

Joint ventures are subject to merger control in France. According to Article L.430-1 FCC, the creation of a joint venture performing on a lasting basis all the functions of an autonomous economic entity constitutes a merger. The joint venture shall have sufficient resources to operate independently on the market. This encompasses having human resources, budget, own commercial management as well as own access to the market. In addition, its sales and purchases shall not depend only on its parent companies.

A joint venture may result from:

• the creation of a new joint structure,;
• the contribution of assets previously held by the parent companies individually to an existing joint venture, where such assets, whether contracts, know-how or other assets, enable the joint venture to expand its activities; or
• the acquisition by one or more new shareholder(s) of joint control of an existing undertaking.

There are no special thresholds for joint ventures under French merger control.

Review of Transactions Below the National Jurisdictional Thresholds

At the EU level, the Court of Justice has recently stated that Article 22 of the EU Merger Regulation does not enable national competition authorities (NCAs) to refer a case to the European Commission not meeting the EU jurisdictional thresholds if they do not have jurisdiction over it (judgment of 3 September 2024, Illumina-Grail, Joined Cases C‑611/22 P and C‑625/22 P). However, the Court of Justice held that the EU Merger Regulation does not preclude such a concentration from being subject to control by the NCAs and by the national courts, on the basis of the direct effect of Article 102 of the Treaty on the Functioning of the European Union (TFEU), based on relevant national procedural rules (judgment of 16 March 2023, Towercast, C 449/21).

The FCA took note of this judgment and indicated that it intends to make full use of the existing instruments, whether based on Articles 101 and 102 TFEU or on equivalent provisions under national law to ensure that no merger, including those that are not subject to prior notification, would harm competition on the French territory.

In a recent decision of 2 May 2024, the FCA assessed alleged anti-competitive practices in the meat-cutting sector consisting in a market allocation through a series of transfer agreements. Based on the case law resulting from the Towercast judgment of the Court of Justice, the FCA reviewed for the first time mergers below French and EU merger control rules in light of the prohibition of anti-competitive agreements set out in Articles 101 TFEU and L. 420-1 FCC. The FCA finally dismissed the case on the merits (Decision No 24-D-05 of 2 May 2024).

In January 2025, the FCA launched a public consultation on a proposal to introduce a call-in power to review mergers falling below the jurisdictional thresholds. The FCA aims at submitting a proposal to French public authorities in the course of 2025.

Referrals of a Transaction Which Meets the EU Thresholds at the Request of the FCA

Pursuant to Article 9 of the EU Merger Regulation, a member state, on its own initiative or upon the invitation of the Commission, may ask for a total or partial referral of a transaction filed before the European Commission (and thus triggering the EU jurisdictional thresholds) that meet one of the following criteria

• the concentration threatens to affect significantly competition in a market within that member state, which presents all the characteristics of a distinct market; or
• the concentration affects competition in a market within that member state, which presents all the characteristics of a distinct market and which does not constitute a substantial part of the common market.

Article L.430-9 FCC

In case of abusive exploitation of a dominant position or economic dependence, the FCA can order an undertaking to modify, complete or terminate any agreements or acts that cause the concentration of the economic power, even though they have been reviewed under merger control (Article L. 430-9 FCC). This provision has been applied once (Decision No 02-D-44 of 11 July 2002).

According to Article L.430-4 FCC, a merger cannot be implemented without the prior approval of the FCA. Under exceptional circumstances, the FCA can authorise the implementation of a transaction before its clearance (see 2.14 Exceptions to Suspensive Effect).

Implementation of a transaction before clearance (“gun-jumping”) exposes the parties in charge of the notification to a fine up to 5% of their turnover excluding taxes achieved in France during the last financial year and for individuals a fine of up to EUR1.5 million. The fine can be increased up to the turnover achieved by the target in France during the same period (Article L. 430-8, I FCC). For instance, the FCA fined Altice up to EUR80 million for implementing two mergers before approval was given (Decision No 16-D-24 of 24 November 2016).

Fines for gun-jumping may be added to a fine for failure to notify (see 2.2 Failure to Notify). In the decision No 22-D-10 of 12 April 2022, COFEPP was not only fined for failure to notify the transaction but was also fined for having implemented the transaction before clearance.

Gun-jumping also exposes parties to penalties based on anti-competitive conduct such as anti-competitive agreements (eg, exchange of commercially sensitive information) or abuse of a dominant position.

Penalties are published on the website of the FCA. Unlike failure to notify, gun-jumping is considered as a continuous infringement, and the five-year limitation period begins to run as from the clearance decision.

French merger control provides two categories of exceptions to the suspensive effect.

An exception to the suspensive effect is automatically granted to the acquisition or swap of securities through a public takeover bid. A public exchange offer or a mere acquisition of securities on a regulated market does not constitute a concentration and can be achieved before the FCA’s clearance (Article R. 430-5 FCC). However, the acquirer cannot exercise its voting rights before the FCA’s clearance.

The FCA may also grant ad hoc exceptions and allow a total or partial implementation before clearance in certain exceptional cases where it is necessary and duly justified (Article L.430-4, FCC). The acquisition of undertakings in judicial liquidation or insolvency proceedings often benefit from such derogation. Apart from these cases, the requests for exception to suspensive effect are generally rejected by the FCA. The notifying party is required to submit the notification before or along with the request for a derogation to the suspensive effect.

For instance, the FCA granted a derogation to Mobilux authorising the acquisition of Conforama before clearance as Conforama was facing serious financial difficulties and was under a conciliation procedure before the Commercial Court of Bobigny (decision No 22-DCC-78). The FCA also granted a derogation to Intermarché, Carrefour and Auchan for the acquisition of several stores of the Casino group as they were facing financial difficulties (decisions No 24-DCC-02, 24-DCC-255, 24-DCC-288).

Exceptions to suspensive effect are provided in 2.14 Exceptions to Suspensive Effect. There are no other exceptions.

The FCC does not provide any specific deadline for notification. According to the Merger Control Guidelines, the notification shall be made when the parties are able to present the project in a manner that will allow for the review of the file. In any event, the transaction shall be notified and authorised before its implementation.

A binding agreement is not necessary to file. Parties can file based on a letter of intent or after the announcement of a public bid. The FCA will assess whether the project is sufficiently advanced. This assessment is made on a case-by-case basis. The parties must be able to prove they have the intention of entering into a binding agreement.

No filing fees are required to notify a merger to the FCA.

In the case of acquisition of sole control, the acquirer is responsible for filing. In the case of acquisition of joint control or creation of a joint venture, both acquiring parties are responsible for filing

The information that must be included in a filing is listed in Annexes 4-3 to 4-5 FCC. A template of the filing form is available on the FCA’s website.

The filing shall contain the following five sections: (i) a description of the transaction, (ii) the presentation of the undertakings concerned and their groups, (iii) the presentation of the markets concerned (market definitions, market shares), (iv) a detailed presentation of each of the affected markets, and (v) a statement of the accuracy and completeness of the information provided.

A copy of the transaction documents and acts that are necessary for the understanding of the transaction shall also be provided to the FCA.

The parties shall also include a non-confidential summary of the merger which will be published on the FCA’s website.

The notifying party must submit the necessary documents in French. In practice, some annexes may be submitted in English and the FCA requires a translation into French of the relevant extracts.

Simplified Filings

For transactions that are unlikely to raise anti-competitive effects, the content of the filing is slightly reduced (dossier simplifié). The transactions eligible to the simplified filing are listed in paragraph 230 of the Merger Control Guidelines (See 3.11 Accelerated Procedure).

Electronic Notification Procedure

In addition, an electronic notification procedure applies to the following transactions:

• transactions in the retail sector that do not involve a change in the trade name of the retail store(s) concerned;
• transactions in motor vehicle distribution; and
• transactions that do not result in an overlap of activities between the parties, whether horizontal, vertical or conglomerate in nature. It mainly relates to transactions involving investment funds.

For these transactions, a pre-filing and a specific filing form is provided in paragraph 239 of the Merger Control Guidelines.

In practice, the FCA accepts electronic notification (through its “Hermes” online platform) at least for all transactions which are eligible to the above-mentioned simplified procedure.

If the notification is deemed incomplete, the FCA does not provide a letter of completeness, and the review period does not start.

The parties are responsible for providing the FCA with a complete and correct notification. In case of omission or false statement, the FCA may impose a fine of up to 5% of an undertaking’s turnover excluding taxes achieved in France during the last financial year and for individuals a fine of EUR1.5 million (Article L. 430-8 FCC).

In addition, the FCA can require the withdrawal of the clearance decision, unless the parties demerge. In such case, the parties shall submit a new filing to the FCA within one month starting from the withdrawal of the clearance decision.

In practice, these penalties are rarely applied. In 2006, the Ministry of Economy (who was the competent authority at that time) imposed a fine on Vico of up to EUR10,000 for the failure to declare the acquisition of another undertaking active in markets concerned by the transaction and for falsely declaring that the target was not active in certain segments of activity (Letter C2006-96 of 13 November 2006).

The same penalties that apply for an incomplete notification apply for an inaccurate notification (see 3.6 Penalties/Consequences of Incomplete Notification).

Prior to notification, the parties have the possibility to ask for the appointment of a case handler responsible for the assessment of the transaction. Following the request, the FCA appoints a case handler within five business days.

Although it is not required, the review process begins with a pre-notification phase which is encouraged by the FCA. However, a pre-notification is no longer encouraged for simplified filings (see 3.9 Pre-Notification Discussions With Authorities).

Phase I

Phase I lasts 25 business days starting on the working day following the date on which the complete notification file is received by the FCA. This phase is automatically extended by 15 business days if the FCA receives a remedies proposal (Article L.430-5 FCC).

The review process may be suspended by the FCA in certain circumstances when the notifying party fails to provide the FCA with a new fact that arises during the investigation, if the notifying party fails to provide the FCA with all or part of the information within the time limit set or if the parties try to prevent third parties from responding to a request for information from the FCA (“stop-the-clock” mechanism). The notifying party can also ask for the suspension of the review process for up to 15 business days in cases such as the finalisation of remedies negotiations (Article L. 430-5, III).

During the review process, the FCA may send requests for information to the notifying party as well as conduct hearings of the notifying party or any other actor and market tests with customers, suppliers and competitors.

At the end of Phase I, the FCA may adopt the following decisions: (i) a decision in which the FCA declines jurisdiction, (ii) a clearance decision, with or without remedies, or (iii) a decision to initiate an in-depth investigation (“Phase II”) in case of serious doubts on competition concerns.

Phase II

Phase II can be initiated by the FCA itself where there are serious doubts on competition concerns. The Ministry of Economy may also ask the FCA to initiate a Phase II within five business days from the receipt of the decision or from the date the Ministry was provided with this information. The request is assessed by the FCA which is free to open a Phase II or not.

Phase II lasts 65 business days and can be extended up to 20 business days if remedies are submitted less than 20 business days before the end of Phase II. The overall legal timeline for Phase II is 85 business days.

The review process can be suspended by the FCA for the same reasons as in Phase I (“stop-the-clock” mechanism). The notifying party can also ask for the suspension of the review process up to 20 business days in cases such as the finalisation of remedies (Article L. 430-7, II FCC).

In practice, Phase II generally starts with a “kick-off meeting” during which the FCA sets a timeline. The total duration of the Phase II review process exceeds in practice the legal time limits, in particular using stop-the-clock mechanisms.

Similarly to the Phase I “toolbox”, the FCA can send requests for information to the notifying party and conduct hearings and market tests.

Once the investigation is completed, the investigative services of the FCA send a report to the notifying party in which the assessment of the transaction is described. The notifying party has 15 business days to send its written observations. The report is also sent to the Ministry of Economy who can make observations.

A hearing is then organised before the decision-making body of the FCA (Collège) during which the case handlers, the notifying party and the Ministry of Economy present their observations. The Collège can also hear third parties, generally outside the presence of the notifying party and its counsel.

At the end of Phase II, the FCA may adopt the following decisions: (i) a clearance decision, with or without remedies, (ii) a clearance decision, with or without injunctions/prescriptions, or (ii) a prohibition decision.

Once the FCA has adopted a decision, the Ministry of Economy has the power to “call in” cases within 25 business days and adopt a decision on the grounds of public interests other than competition. Reasons of general interest are notably industrial development, competitiveness and job creation. This power has only been used once by the Ministry of Economy regarding the decision No 18-DCC-95 of 14 June 2018 Cofigeo/Agripole in which the FCA had imposed divestment injunctions. The Ministry of Economy cleared the transaction without the injunctions imposed by the FCA but with commitments to protect jobs and industrial development.

The parties have the possibility to engage in pre-notification discussions with the FCA. Although this phase is optional, it is widely used in practice by notifying parties.

Pursuant to a recent new approach adopted by the FCA (pacte de confiance), the pre-notification phase is no longer necessary for simplified filings, unless there are legitimate concerns. In this case, the notifying party shall ensure that the filing contains a full competitive analysis and a comprehensive presentation of all plausible relevant market definitions. Otherwise, the FCA will consider that the filing is incomplete and may, if necessary, open proceedings to impose penalties or/and withdraw a clearance decision under Article L. 430-8 of the French Commercial Code.

Pre-notification exchanges are treated as confidential by the FCA.

During the review process, the FCA can request information from the parties concerned, as well as from third parties. The FCA may also carry out market tests with customers, suppliers and competitors. In practice, requests for information are very common and can be burdensome in complex cases.

Such requests may lead to a stop-the-clock (see 3.8 Review Process).

For transactions that are unlikely to raise anti-competitive concerns, the content of the filing is slightly lightened (dossier simplifié) and the review process is reduced to approximately 15 business days. To be eligible for simplified filing, the transaction must meet one of the following criteria (Merger Control Guidelines, paragraph 230):

• the combined market share of the undertakings concerned is below 25% in markets consistently defined in past decisions;
• in case of overlap, the combined market share of the undertakings concerned is less than 50% and the increment in market share resulting from the transaction is less than 2% in markets consistently defined by past decisions;
• in case of vertically related markets, the combined market share of the undertakings concerned is less than 30% in markets consistently defined in past decisions;
• in case of related markets, the market shares of the undertakings concerned are below 30% in markets consistently defined in past decisions;
• in case of acquisition of sole control of an undertaking, where the acquirer exercised joint control of the target prior to the transaction;
• the creation of a full-function joint venture whose economic activity is only outside France; and
• the acquisition of joint control of a real estate asset for sale in a future state of completion.

For a transaction to be cleared in Phase I, it should not raise serious doubts of an adverse impact on competition, or the notifying party should propose commitments dispelling any serious doubts in this respect.

In Phase II, pursuant to Article L.430-6 FCC, the FCA assesses whether a transaction is likely to have an adverse effect on competition, by creating or reinforcing a dominant position or by creating or reinforcing a buying power that would put suppliers in a situation of economic dependence. The FCA must establish the harm and the risks of a significant reduction in competition that the transaction causes based on a forward-looking assessment that takes account of all relevant data and is based on a plausible economic scenario. This analysis is based on the characteristics of the relevant market and the functioning of competition pre-transaction but also takes account of its possible developments.

Pursuant to Annex 4-3 FCC, a market is deemed affected in the following cases:

• if the combined market share of two or more of the undertakings concerned is 25% or more;
• if one undertaking concerned is active on this market and another undertaking concerned is active on an upstream, downstream or related market, whether or not there is a supplier-customer relationship between them, where the aggregate market share of the undertakings concerned in any of those markets is 30% or more; and
• if the transaction leads to the elimination of a potential competitor in one of the markets where the parties are active.

For each affected market, the notifying party shall provide the following information:

• an estimate of the size of the market (in value and in volume);
• market shares of the undertakings concerned;
• market share and contact details of main competitors;
• contact details of main customers and their share in the turnover of the undertakings concerned;
• contact details of main suppliers and their share in the purchases of the undertakings concerned;
• co-operation agreements (horizontal and vertical) concluded by the undertakings concerned on the affected markets;
• the factors that may have an impact on the access to the markets;
• a description of the distribution channels and after-sales service networks on the market;
• the main factors of determination of the prices and their evolution;
• an estimate of the existing capacities;
• an analysis of the structure of demand; and
• contact details of the main professional organisations.

Although market shares are not the only criteria to assess the competitive effects of a transaction, the FCA generally considers that a combined market share of 50% or more may give rise to a presumption of significant market power. In contrast, when one of the undertakings concerned holds a very low market share (generally below 2%), the transaction is unlikely to raise competition concerns. In addition, a combined market share below 25% is unlikely to raise competition concerns under unilateral effects.

The FCA relies on its previous decisions and on the decisions of the European Commission, in particular regarding market definitions.

The FCA takes into consideration a variety of different competition concerns such as horizontal, vertical and conglomerate effects, including unilateral and co-ordinated effects. 

Article L.430-6 FCC provides that in the Phase II review process the FCA may take into consideration any potential economic efficiencies that may contribute to economic progress and offset negative impacts that the merger might have on competition.

Economic efficiencies are assessed under three criteria: (i) the efficiencies must be quantifiable and verifiable, (ii) the efficiencies must be specific to the merger, and (iii) the efficiencies are transferred at least in part to “consumers” (see Conseil d’Etat, 22 July 2022, No 436274; Conseil d’Etat, Section, 6 October 2000, No 216645).

If those three cumulative conditions are met, the FCA then assesses whether efficiencies are sufficient to offset the competition concerns.

In practice, economic efficiencies are rarely considered by the FCA (see decision No 20-DCC-38 of 28 February 2020).

Non-competition issues are not taken into account by the FCA in the review process. However, at the end of Phase II, the Ministry of Economy can call in the transaction and adopt a decision on the grounds of public interests other than competition, such as industrial development, competitiveness and job creation (see 3.8 Review Process).

French law provides separate rules for foreign direct investment (see 9. Foreign Direct Investment/Subsidies Review).

Merger control does not provide specific substantive regulation for the review of joint ventures. The effects of a transaction regarding a joint venture will be assessed under the same criteria mentioned in 4.1 Substantive Test. However, the FCA will analyse the possible risk of co-ordinated effects between the parent undertakings.

Pursuant to Article L.430-7, III FCC, the FCA may prohibit a transaction and if necessary, order the parties to take any appropriate measure to restore sufficient competition. Since its creation, the FCA has adopted only two prohibition decisions (Decisions No 21-DCC-79, Pipeline Méditerranée Rhône; No 20-DCC-116, Soditroy).

In practice, notifying parties generally withdraw the filing before the adoption of a prohibition decision. For instance, the notification regarding the merger between TF1 and M6 was withdrawn (press release of 16 September 2022). Another recent example is the merger between Euralis and Maïsadour (press release of 31 August 2023).

The FCA can also subject its clearance decision to remedies or, following a Phase II, subject clearance to remedies or impose injunctions (in which case the notifying parties can submit written observations on the contemplated injunctions prior to the decision).

Remedies can take the form of structural or behavioural remedies.

Structural remedies are generally more appropriate to offset horizontal effects. They consist in the divestment of tangible assets such as subsidiaries, stores, plants or intangible assets such as contracts or operating licences, the absence of acquisition of an asset included in the initial perimeter (see for instance decision No 21-DCC-65 LDC/Ronsard), the amendment of contracts or statutes, the divestment of a minority shareholding, and the removal of a structural link with a competitor.

Behavourial remedies may consist in granting access to networks or infrastructures, granting access to licences, prohibition of bundling, etc. In 2020, the FCA published a study regarding behavioural remedies.

In practice, the FCA generally encourages parties to offer structural remedies as the monitoring of behavourial remedies may be more complex.

Remedies are designed to address only competition issues. The FCA has no power to impose remedies to address non-competition issues. In practice, remedies may be adapted in such a way as to ensure compliance with other regulatory provisions – eg, personal data protection laws (see for instance decision 12-DCC-20 Electricité de Strasbourg/Enerest).

The substance of the remedies depends on the review process phases during which they are proposed and, therefore, on the applicable standard. Phase I remedies must dispel any serious doubts of harm to competition while Phase II remedies must prevent the restriction on competition resulting from the transaction through the creation or strengthening of a dominant position.

The remedies must meet the following criteria to be deemed acceptable:

• the remedies must be necessary and effective to offset the competition concerns identified;
• the remedies must be proportionate;
• the remedies must be clear and not generate any doubts regarding their implementation;
• the implementation of the remedies must be swift; and
• the monitoring of the remedies must be possible.

The remedies are listed in a commitment letter which describes their characteristics.

Remedies may be offered by the parties at any time during the procedure before the FCA. The FCA encourages the parties to submit remedies early during the review process to assess them in a timely manner. The discussion regarding remedies can be initiated during pre-notification.

The notifying party shall offer sufficient remedies to offset the competition concerns. The FCA may impose injunctions or prescriptions if the notifying party refuses to offer remedies and offers insufficient remedies, but this is very rare in practice since this power is limited to Phase II decisions.

The impact of remedies on the review process is detailed in 3.8 Review Process.

Once the remedies are offered by the parties, the FCA assesses whether they meet the criteria described in 5.3 Legal Standard. The remedies can be market tested by the FCA to determine whether they are appropriate to offset the competition concerns and/or whether potential remedy takers would be interested.

Once the remedies are accepted by the FCA, they become mandatory. The implementation of remedies is generally monitored by a trustee.

The divestment of an activity/asset can raise doubts regarding its transfer. In such cases, the notifying party can offer to submit a fix-it-first remedy or an upfront buyer remedy consisting respectively in the implementation of remedies before the clearance decision or after the adoption of the clearance decision but before the closing of the transaction.

For remedies consisting in the divestment of an activity/assets that are not a condition for the closing of the transaction, the timing for finding a remedy taker shall be as swift as possible. Although it varies from case to case, it generally does not exceed one year.

According to Article L.430-8, IV FCC, if remedies, injunctions or prescriptions imposed by the FCA are not fully complied with, the FCA may (i) withdraw the clearance decision, unless the parties demerge, (ii) order under a daily penalty to implement remedies, injunctions or prescriptions required in the decision within a time limit, (iii) under a daily penalty and within a time limit to implement other remedies, order injunctions or prescriptions as substitutes of the those required in the initial decision.

In addition, the FCA can impose fines up to 5% of parties’ turnover excluding taxes achieved in France during the last financial year and for individuals a fine of EUR1.5 million.

For instance, in the case Fnac/Darty, the FCA imposed a fine up to EUR20 million because Fnac Darty failed to divest three stores, which was a condition to the clearance of the transaction. The FCA ordered Fnac Darty to divest two stores as substitutes of those that it had failed to sell (Decision No 18-D-16 of 27 July 2018).

The decisions of the FCA are notified to the notifying party and published on the website of the FCA. The notifying party is provided with the draft confidential decision prior to its publication. The notifying party may identify the information that shall be kept confidential in the published decision. A press release is also published on the FCA’s website within five business days from the date of the decision (Article R.430-6, FCC).

The FCA may review foreign-to-foreign transactions that meet the turnover thresholds and therefore impose remedies. The FCA has not required remedies regarding a foreign-to-foreign transaction.

The parties are not obliged to inform the FCA of the existence of an ancillary restraint. However, they may inform the FCA of the restraint in the case of doubt relating to the compatibility of the clause with competition rules. In this case, the FCA may review the clause and assess whether it is directly related and necessary to the implementation of the concentration as well as its impact on competition (Merger Control Guidelines, paragraphs 798-801). To the extent that the competition restraints exceed what is directly related and necessary to the transaction, the General Rapporteur of the FCA could consider proposing to the FCA to initiate proceedings ex officio for anti-competitive agreements, should the parties fail to remove these restrictions.

Third parties may be involved in the review process and provide the FCA with useful information throughout the investigation. For instance, after the notification is published on the FCA’s website, third parties are invited to submit any concerns regarding the merger.

Third parties providing information to the FCA may claim confidentiality regarding information relating to business secrets (Article R. 463-15-1 FCC).

During its review process, the FCA may market test the transaction with third parties, including on remedies offered by the notifying party (usually through requests for information). It may also hear third parties. In case of Phase II, the Collège may hear third parties (Article L. 463-7 FCC).

The questionnaires answered by third parties can be made confidential at their request (Article L.430-10 FCC).

Within five business days from the submission of the filing, the FCA publishes a press release on its website which includes the names of the undertakings concerned and their groups, the nature of the transaction, the economic sector concerned, the timing granted to third parties to submit their observations as well as a non-confidential synopsis of the transaction provided by the notifying party (Article R.430-4 FCC).

Third parties do not benefit from the right to access the case file. The filing form is kept confidential and is not disclosed to third parties.

Within the European Union, the FCA is member of the European Competition Network (ECN) which exists in co-operation with other NCAs. In case a transaction is filed before different NCAs, the ECN enables NCAs to exchange information regarding the markets concerned and the contemplated remedies in order to limit the risk of inconsistent decisions. Business secrets are kept confidential. NCAs must request the authorisation of the undertakings to exchange information during pre-notification (Merger Control Guidelines, paragraph 346).

The FCA is also a member of international networks such as the International Competition Network, which aim to build consensus and convergence regarding competition policy principles.

The notifying party and third parties may appeal the FCA’s decision (or the Minister’s decision if applicable) before the French Administrative Supreme Court. They may also request interim measures such as the suspension of the decision under the référé suspension proceeding, which requires the demonstration of an urgency and a serious doubt regarding the legality of the decision.

An appeal against the FCA’s decision can be brought before the French Administrative Supreme Court within two months of the notification of the FCA’s decision or its publication on the FCA’s website. The timeline for an appeal generally lasts less than one year (approximately six months).

The French Administrative Supreme Court has annulled clearance decisions in a few cases. For instance, the FCA’s decision authorising the acquisition of Direct 8, Direct Star, Direct Productions, Direct Digital and Bolloré Intermédia by Vivendi Universal and Canal Plus was annulled after the appeal of two competitors – TF1 and M6. The Administrative Supreme Court found that the FCA made a manifest error of assessment regarding the effectiveness of one of the remedies offered (Conseil d’Etat, 23 December 2013, No 363702). The parties renotified the transaction and made commitments identical to those made at the time of the initial clearance decision apart from the remedy related to the acquisition of the rights to French films, which was strengthened (decision No 14-DCC-50 of April 2014).

Third parties may appeal a clearance decision before the French Administrative Supreme Court and shall demonstrate their interest and ability to bring proceedings. The French Administrative Supreme Court recently stated that the employee representation body of an undertaking can appeal a decision of the FCA (Conseil d’Etat, 9 March 2021, No 433214).

For an example of successful appeal, see 8.2 Typical Timeline for Appeals.

French law provides a separate regulation regarding foreign direct investments (FDI).

FDI regulation is mainly governed by Articles L. 151-3 and R. 151-1 and subsequent articles of the FCC. Guidelines and questions/answers are available on the website of the General Directorate of the Treasury.

Foreign direct investments are subject to the review of the Ministry of Economy if they meet the following conditions:

• a foreign investor is involved – a foreign individual/entity or French individual/entity not domiciled in France for tax purposes, an entity governed by foreign law, an entity governed by French law that is controlled by an individual with foreign nationality;
• the transaction involves (i) a foreign investor acquiring control over a French legal entity or an establishment registered in the Trade and Companies Register, (ii) a foreign investor acquiring all or part of a business of an entity governed by French law, (iii) an investor from a third country with respect to the EU or the EEA acquiring more than 25% of the voting rights of an entity governed by French law, or (iv) an investor acquiring more than 10% of the voting rights of a French listed entity; and
• the target performs sensitive activities, such as the provision of defence, energy, transport, public health, electronic communications, new technologies, aerospace, media and food safety.

At the end of the preliminary review, which lasts up to 30 business days from the date on which the complete application has been filed, the Minister of Economy can issue (i) a decision stating that a prior authorisation under FDI regulation is not required as one of several of the criteria are not met, (ii) an unconditional clearance decision, or (iii) a notice stating that a further review is required to determine whether the transaction should be subject to conditions to safeguard national interests.

At the end of the second phase, which can last up to 45 business days, the Minister of Economy can issue (i) an unconditional clearance decision, (ii) a clearance decision subject to conditions, or (iii) a prohibition decision.

The decisions of the Minister of Economy may be subject to two types of appeal:

• an administrative appeal – the investor may lodge an administrative appeal with the Minister within two months of notification of the decision, requesting that the decision be reviewed. Failure to respond to such an appeal within two months of the date of the appeal shall constitute rejection; and
• an appeal before a court – the investor may also lodge an appeal with the competent administrative court within two months. Pursuant to Article R. 312-10 of the Code of Administrative Justice, the territorially competent administrative court is that of the registered office of the entity in which the investment was made.