French Competition Authority fines Altice and SFR € 80 million for gun-jumping

• 09/11/2016
• Articles

On 8 November 2016, the French Competition Authority (FCA) fined Altice (trading as Numericable) and SFR Group € 80 million for the coordination of commercial behaviour prior to obtaining French merger control clearance.  The FCA decision is ground-breaking as it imposes the highest fine ever in Europe for ‘gun-jumping’ practices. 

Similar to the merger control rules in many other jurisdictions, French merger control rules prohibit merging parties from engaging in commercial coordination prior to obtaining merger control clearance of notifiable transactions.  The FCA found that Altice and SFR breached this stand-still obligation in two cases: (i) the acquisition by Altice of SFR, which was conditionally cleared by the FCA on 30 October 2014 following an in-depth review, and (ii) the acquisition by Altice of OTL (trading as Virgin Mobile), which was unconditionally approved by the FCA on 27 November 2014.   

As regards the SFR acquisition, the FCA found that, prior to obtaining merger clearance, Altice’s senior management reviewed and approved SFR’s bid for developing a fibre optics network and the renegotiation of a major agreement on sharing mobile networks between SFR and Bouygues Telecom.  Moreover, the FCA concluded that, prior to receiving clearance, Altice directly intervened in SFR’s commercial policy, tariffs and pricing policy on broadband high-speed internet access and relevant promotions.  In addition, the FCA concluded that Altice and SFR established a coordinated strategy to launch a new ‘white-label’ range of high-speed broadband before obtaining merger clearance.  

As regards the OTL acquisition, the FCA concluded that Altice imposed its own strategic decisions on OTL prior to obtaining merger clearance.  The FCA also determined that the general manager of OTL began to exercise his functions within the SFR-Numericable group regarding new projects during the suspension period.

The level of the € 80 million fine for gun-jumping is unprecedented in European merger control.  Indeed, the highest fine ever imposed by the European Commission for gun-jumping infringements was € 20 million (on Marine Harvest in 2014 and Electrabel in 2009).  The Altice/SFR case serves as a stark reminder of the need for merging parties to carefully manage integration planning of transactions that require merger control approval.