Whilst competition authorities are reflecting on ways to control "killer acquisitions", the French Competition Authority ("FCA") has declined to rely on historic case precedent to control a non-notifiable acquisition completed by a dominant company.
On 13 October 2016, TDF, the French incumbent broadcasting company and market leader, acquired one of its two competitors, Itas Tim. This 3-to-2 merger did not meet the merger control thresholds and was consequently not notified to or examined by the FCA.
In November 2017, TDF's only remaining competitor, Towercast, lodged a complaint before the FCA arguing that TDF had abused its dominant position by acquiring Itas Tim, which reinforced TDF's dominant position. TowerCast sought to rely on the 1973 Continental Can case, in which the European Court of Justice ruled that Article 102 of the Treaty on the Functioning of the European Union ("TFEU") prohibiting abuses of dominant position could be applied to mergers when "an undertaking in a dominant position strengthens such position in such a way that the degree of dominance reached substantially fetters competition, i.e. that only undertakings remain in the market whose behaviour depends on the dominant one".
Following the complaint, the FCA commenced an investigation, and notified a statement of objections to TDF in relation to Itas Tim's acquisition.
However, the FCA ultimately ruled that the introduction in 1989 of a mandatory ex-ante merger control regime in the EU, intended to be the sole instrument to control concentrations excluded the application of Article 102 TFEU to concentrations even though they do not have an EU dimension. The FCA also made it clear that the French equivalent of Article 102 may not, for similar reasons, be invoked against a concentration.
Unfortunately the FCA's ruling does not provide complete legal certainty in relation to concentrations which do not meet the notification thresholds in France. In its decision, the FCA took the opportunity to clarify that, in its view, a concentration not meeting the French thresholds could nevertheless be subject to a referral from France to the European Commission pursuant to Article 22 of the EU merger regulation. This clarification not only leaves some uncertainty for transactions that do not meet the merger thresholds, but is also inconsistent with the European Commission's position as expressed in its 2014 white paper entitled "Towards more effective EU merger control".
