Key Developments In Merger Control In 2023

• Published date: 10 January 2024
• Subject Matter: orporate/Commercial Law, Antitrust/Competition Law, M&A/Private Equity, Corporate and Company Law, Antitrust, EU Competition
• Law Firm: Mayer Brown
• Author: Ms Nathalie Jalabert-Doury, Jean-Maxime Blutel and Wladimir Soltmann (Phd)

This article was originally published by International Law Office.

Introduction

A review of the French Competition Authority's (FCA) merger control activity during the year 2023 sheds light on several notable trends.

The FCA has maintained a very high level of activity with a stable number of merger decisions compared to last year¹ and, looking across the piece, three trends stand out. First, the FCA has adopted several noteworthy decisions concerning conglomerate mergers. Second, it has indicated the need for vigilance with respect to mergers concerning the French overseas territories. Third, it has indicated its willingness to make use of mechanisms which allow for intervention even when French merger control jurisdictional thresholds are not met. This article investigates these three trends in more detail and draws out takeaways for 2024 cases.

Increased activity in conglomerate mergers

The number of cases across 2023 in which the FCA conducted a thorough assessment of potential conglomerate effects arising in merger cases catches attention, as well as several of the specific cases in which this kind of analysis was carried out. Conglomerate effects may arise when a merger provides the new entity with an increased ability or incentive to leverage its market power on a given market to develop its position in a closely related or neighbouring market.

A noteworthy example was the acquisition of joint control of Cityscoot by RATP and Caisse des Dép'ts et Consignations. RATP holds exclusive rights for the operation of metros, trams and buses in Paris and its inner suburbs. It also offers mobility-as-a-service applications, of CityScoot, an electric scooter-sharing service active mostly in Paris.²

In this case the FCA examined, inter alia, whether RATP could either bundle its public transportation services with the newly acquired scooter-sharing services in Paris or use the resources from its activities under exclusive rights to support the development of the newly acquired activities in markets open to competition. The FCA, however, ended up ruling out both risks after finding that RATP would not have any ability (or incentive in the case of bundling) to implement such foreclosure strategies, nor have any advantage (public transportation data, ability to offer preferential prices for scooter-sharing) that would not also be accessible to its competitors. Noting the absence of horizontal overlaps or credible risk of restrictive vertical effects, the FCA unconditionally cleared the transaction in Phase 1.

Similarly, the FCA cleared without conditions the acquisition by Electricité de France (EDF) of the sole control of General Electric's GE Steam Power division. EDF is the French incumbent energy operator and main energy producer and wholesaler in France. GE Steam Power division is a supplier of "conventional islands" and their turbo-alternator generators, which with nuclear islands, are the main components of nuclear power plants.³

Even though the FCA found that GE Steam Power is the sole credible supplier of very high-power turbo-alternator generators adapted to the EPR nuclear islands supplied by EDF and that the two products were closely...