FRANCE Law and Practice Contributed by: Malik Idri and Mathieu Relange, FTPA Avocats
Additionally, the FCA assesses whether the merger makes a sufficient contribution to economic progress to offset any anticompetitive effects. In its Guidelines, the FCA emphasises that its inter - vention must be proportionate. Merger control is not designed to protect the individual interests of the par - ties involved. Instead, its primary objective is to safe - guard competition and promote its positive effects on consumer welfare and purchasing power. Therefore, Article L. 430-6 FCC is interpreted to allow the FCA to act only if the transaction has a significant effect on competition. 4.2 Markets Affected by a Transaction Under Annex 4-3 FCC of the Guidelines, a market is considered “affected” in the following situations. • The combined market share of at least two of the undertakings concerned reaches or exceeds 25%. • One undertaking concerned is active on a given market and another is active on an upstream, downstream or related market (regardless of a supplier-customer relationship), provided their combined market share on any of those markets equals or exceeds 30%. • The transaction eliminates a potential competitor on one of the markets where the parties are active. For each affected market, the notifying party must provide a comprehensive set of information, covering in particular: • market size estimates (both value and volume); • market shares of the undertakings concerned and those of their main competitors, along with their contact details; • contact details of the main customers and their proportion of the turnover of the undertakings concerned; • contact details of the main suppliers and their share of the purchases of the undertakings con - cerned; • horizontal and vertical co-operation agreements concluded on the affected markets, as well as fac - tors affecting market access; • description of distribution channels and after-sales service networks;
• main price-determining factors and their evolution; • estimate of existing capacities and an analysis of the structure of demand; and • contact details of the main professional organisa - tions. While market shares are not the sole criterion for assessing the competitive effects of a transaction, the Guidelines indicate that a combined market share around or above 50% is likely to raise serious com - petition concerns and may support a presumption of significant market power, unless there are strong countervailing factors (eg, entry barriers, buyer power, efficiencies, etc). Nevertheless, where one of the undertakings con - cerned holds a very low market share (typically below 2%), the transaction is generally unlikely to raise con - cerns. In addition, a combined market share below 25 % on a market is generally considered insufficient, on its own, to give rise to significant unilateral effects. 4.3 Reliance on Case Law The FCA aligns its market definitions and market anal - yses with its own past decisions as well as those of the European Commission. 4.4 Competition Concerns The FCA assesses the potential horizontal, vertical and conglomerate effects of a transaction as part of its competitive analysis. 4.5 Economic Efficiencies Under Article L. 430-6 FCC, the FCA must consider economic efficiencies that contribute to economic progress and may offset negative impacts on com - petition. The FCA Guidelines outline the conditions for recognising such efficiencies: • gains must be quantifiable and verifiable; • gains must be specific to the merger (ie, not achievable absent the transaction); and • a share of these gains must be passed on to con - sumers. To date, the FCA has never authorised a transaction that was problematic from a competition standpoint on the basis of the efficiency gains it would produce.
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