France: Key Developments And Trends In French Antitrust Enforcement In 2023

Introduction and key takeaways

Although the average and total fines imposed by the French Competition Authority (FCA) in 2023 have decreased in comparison to previous years,¹ it has nevertheless been very active on the antitrust front. This is reflected in the significant number of enforcement decisions that have been handed down, including 10 where fines were imposed, and more than double the number of opinions adopted in 2023 compared with the year before.² In this context, several emerging trends as well as themes carried over from previous years but with new impetus, can be observed. This article explores the key developments in this context.

First and foremost, the FCA demonstrated its continued commitment to closely monitor competition in the digital sector. The FCA also shifted sustainability in the competition sphere further up its priority list. Finally, 2023 stood out for the high number of fines issued in the context of vertical infringements. The first two areas are expected to remain a focus for 2024 and there are indications that FCA may add other fast-developing areas to its enforcement activity such as anticompetitive practices in labor markets. The FCA is also expected to continue to closely monitor the behavior at all levels of the agrifood sector³ and in French overseas territories, in line with its declared objective to protect consumers' purchasing power in the current inflationary context.⁴

More generally, the FCA's enforcement activity levels are expected to remain high. The FCA carried out many inspections in 2023 and will certainly seek to leverage this in 2024.⁵ The FCA's recently updated leniency program, and its new whistleblower framework are also expected to keep the pipeline of work busy. It may also seek to use its tool currently under development based on algorithmic analysis of bidding data, to detect cartels in public procurement contexts.

Digital sector as top priority and FCA leads way on several work streams

In line with previous years, the digital sector was again flagged as a top priority in the FCA's 2023-2024 roadmap.⁶ This renewed commitment is justified by the "long-term" approach necessary in a sector of "increasing complexity", involving a large "diversity of activities" and characterised by constant and fast-paced developments, which require parallel adjustments of competition policies and tools. This long-term focus was borne out in several ways in 2023, including through FCA's advisory activities which show that it is paying "particular attention" to the prominent role of data. To this end, it issued two opinions in 2023 dealing with competition in the cloud sector, which it considers as one of the major technological developments at the heart of the digitisation of the economy. This work of the FCA stands out in part because the cloud market has not so far been, the main focus of the European Commission's digital efforts, as illustrated by no "core platform service" designations of cloud services under the DMA.⁷

Across its opinions in relation to cloud services, the FCA flagged several competition concerns, mainly pertaining to imbalances between "hyperscalers" and their clients. The FCA emphasised the importance of ensuring that this sector remains as contestable as possible (which could, inter alia, require a lowering of barriers to expansion for competitors) and that customers have the ability to switch suppliers or multi-source without facing constraints or excessive costs (such as cloud credits or data transfer fees). At the same time, it considered that competition authorities are well equipped to address any such potential concerns with classic antitrust tools, such as abuse of dominance, restrictive business practices or merger control.⁸

Alongside its work into the cloud sector, in 2023, the FCA also issued a joint statement with the CNIL, the French data protection authority. In this, both authorities confirmed their plans to deepen their cooperation in the pursuit of their shared objectives to protect competition and data privacy. This could be achieved for instance, by promoting the level of personal data protection through the maintenance of effective competition or by preserving personal data protection as a key parameter of competition.⁹

The FCA also continued to be active on the enforcement front in the digital sector. It imposed a fine of €13.5 million on Sony for abusing its dominant position on the market for the supply of video game controllers for PlayStation 4 consoles by limiting the interoperability between its consoles and competitors' controllers and by applying opaque licensing policies.¹⁰

The FCA also adopted interim measures against Meta, following a complaint lodged by an independent advertising company, for their alleged discriminatory practices¹¹ and notified objections to Apple for implementing allegedly discriminatory conditions in relation to the data mining of user data for advertising purposes.¹²

The digital sector will certainly remain at the top of FCA's enforcement priorities in 2024. Indeed the year has started with the agency laying the ground for the adoption of an opinion on generative artificial intelligence by way of opening a consultation. The focus of this will be on assessing the ability of the main market players to consolidate – or leverage – their market power upstream in the generative artificial intelligence value chain to expand in this booming sector.

Increased focus on competition and sustainability

Like other enforcers in Europe and across the globe, the FCA has also put competition issues relating to sustainability on the top of its agenda. This was identified it in its 2023-2024 roadmap as one of its key priorities for the coming years, stressing the need to "explore the competitive challenges of this transition", by focusing "as much on fining the most harmful behaviors in this area as on supporting companies wanting to set up the cooperation necessary for a successful transition". The FCA has effectively followed that path, with two particularly important milestones in December 2023.

In terms of enforcement in the sustainability space, right at the end of 2023, the FCA fined four professional organisations active in the food containers sector, and 11 of their member companies, almost €20 million. The behavior said to infringe the competition rules in this case, was the implementation of a collective strategy aimed at preventing manufacturers from competing on the presence, or absence, of Bisphenol A in food containers such as cans and tins.¹³ The FCA found that preventing manufacturers from advertising their food containers as Bisphenol A-free, and encouraging them not to supply such containers in advance of the entry into force of the law banning such coatings, constituted an infringement of the competition rules "by object". With this decision, the FCA confirmed its willingness to treat environmental and health considerations similarly to more traditional parameters of competition, such as prices or volumes, as soon as these considerations are used by companies as drivers of competition.

With respect to cooperation between companies going forward, as 2023 closed, the FCA initiated its public consultation on a draft notice on the compatibility of sustainability projects with competition rules. The consultation follows the European Commission's updated horizontal block exemption regulation and guidance, its guidelines on the exemption of sustainability agreements in the agricultural sector, and similar guidance from other national enforcers (eg, the UK Competition and Markets Authority and the Dutch Authority). The draft French notice seeks to alleviate potential compliance concerns that might hinder the development of legitimate sustainable projects. The FCA insists on its commitment to an "open-door" policy in this respect and its readiness to provide guidance in assessing the compatibility of such projects.

The FCA's increased interest in sustainable development can also be seen in its use of advisory powers. In February 2023 it opened a market study into the electric vehicles charging infrastructure sector and in December 2023 it published an opinion on the land passenger transport sector. One of the main take-aways of this later is that, according to the FCA, environmental factors should be important criteria for contracting authorities when selecting the most economically advantageous bid in tenders. This is because such factors may encourage green innovation and result in other efficiency gains.

The FCA's 2023 activity hence shows that sustainability is now at the heart of its concerns when it becomes a key competition parameter, stimulates competition through innovation, or generates other efficiencies.

Significant number of vertical infringements

A third notable trend is the high number of enforcement decisions concerning vertical practices adopted by the FCA, which represented 36% of all its infringement decisions in 2023. In particular, with two successive decisions in December 2023, the FCA showed its well-established practice of actively probing the validity of restrictions imposed by suppliers of luxury products in the organization of their distribution networks.

The FCA first imposed a fine of €4 million on Mariage Frères a French tea supplier. In this case, the infringement arose from the company hindering the commercial freedom of its distributors by reserving for itself the online distribution of its branded products and by prohibiting the resale of its premium tea products to other retailers. A few days later, the FCA imposed a €91 million fine on Rolex, also for prohibiting its distributors from selling its products online. In both instances the companies argued that such restrictions were necessary to protect the image of their brand and the integrity of their distribution network. The FCA objected, based on the Coty and Pierre Fabre caselaw of the European Courts,¹⁴ finding that the conditions for such restrictions were not met by Mariage Frères in the absence of a selective distribution system and that Rolex's outright ban was disproportionate, since other players had found less restrictive approaches to achieve these goals. The FCA concluded in both cases that such practices were by object restrictions.

Earlier in the year, the FCA also tackled several other types of vertical restrictions. It imposed a total penalty of €2.9 million on a bakery equipment manufacturer, a dealers' association and a central purchasing body for agreeing the resale prices of bakery equipment and for prohibiting exclusive distributors from making passive (unsolicited) sales outside their allocated territories.

Like on the merger control front, some of the decisions taken by the FCA in relation to vertical agreements in 2023 also demonstrate its willingness to tackle challenges related to the specific characteristics of the French overseas territories, which remain more than ever one of its enforcement priorities.¹⁵ For example, in March 2023, the FCA fined suppliers and wholesale importers of champagne a total of €283,000 for maintaining import exclusivity clauses in Guyana and Guadeloupe, despite the prohibition of such agreements in the French overseas territories in 2012, which aimed to stimulate competition and reduce prices.¹⁶

The FCA has an important track-record in respect of vertical infringement decisions, even though such a high level of enforcement activity has not been seen in recent past years. The comeback in 2023 might be explained as a consequence of the Commission's amendments to its vertical block exemption Regulation which gives national authorities like the FCA, renewed impetus and clearer guidance to intervene in these kind of situations, which have become especially important not least in today's online sales environment.