French Developments Archives

French Developments

International News Spotlight on Competition Law

by McDermott Will & Emery | Sep 21, 2022 | Brussels Developments, Cartel Enforcement, Consumer Protection/Privacy, DOJ Developments, EC Developments, EU Developments, French Developments, FTC Developments, Italian Developments, Mergers & Acquisitions, Monopolization/Abuse of Dominance

In line with the evolution of the economy and the ongoing growth of online business and global trade, we’re seeing a corresponding increase in competition regulation and a rise in enforcement across all authorities. In our latest International News, we take a deep dive into the issues at play.

The growth of the online economy has triggered the US Federal Trade Commission’s (FTC) update of its 20 year old .com Disclosures: How to Make Effective Disclosures in Digital Advertising guide, and the development of an analytical framework for all digital distribution across the European Union. In just one seismic shift under the new EU Vertical Block Exemption Regulation 2022/720, dual-pricing, i.e., setting different wholesale prices for online/offline sales by the same distributor, is no longer considered a hardcore restriction unless its purpose is to prevent the effective use of the internet to sell the goods or services.

In the United States, there is an increased focus on anticompetitive mergers and acquisitions (M&A). The Biden Administration, the Department of Justice Antitrust Division, and the FTC have all stated that the regulatory landscape needs to be reshaped to better reflect dynamic markets, and their priority is the aggressive pursuit of litigation against offending parties rather than the granting of consent decrees. The tendency to “sin first and beg forgiveness later” will emphatically no longer work, as a recent French gun-jumping case demonstrates.

Both the United States and the European Union have also turned their attention to investigating wage fixing and no-poach labour market violations that are not connected with M&A or business collaborations. It’s clear that competition/antitrust authorities are determined to expand their remit.

Read our full Spotlight on Competition Law here.

General Court Upholds European Commission’s Power to Review Illumina-Grail Despite Untriggered Turnover Thresholds

by Hendrik Viaene, Karolien Van der Putten and Hannelore Wiame | Jul 28, 2022 | EC Developments, EU Developments, French Developments, Healthcare Antitrust, Mergers & Acquisitions

In Illumina v Commission, the General Court has confirmed the authority of the European Commission (EC) under Article 22 EU Merger Regulation (EUMR) to examine a transaction that does not have a European dimension, but which is the subject of a referral request made by a Member State – even if the transaction is not notifiable in that Member State.

INTRODUCTION

Article 22 EUMR includes a referral mechanism whereby one or more Member States may request the EC to examine any transaction insofar as it does not have an EU dimension but affects trade between Member States and threatens to significantly affect competition within the territory of the Member State or States making the request (Article 22 Conditions).

With a view to ensuring that non-notifiable yet potentially problematic mergers do not fly under the radar of merger control review, in March 2021 the EC issued practical guidance (Article 22 Guidance) on when it might be appropriate for a Member State to refer such mergers to the Commission. The EC referred in particular to the digital and pharmaceutical sectors (see our On the Subject on the Article 22 Guidance here).

In Illumina v Commission, which concerns a transaction in the pharma sector, the General Court has confirmed that the EC has the authority to examine transactions that do not have a European dimension nor fall within the scope of the national merger control rules of EU or EFTA Member States.

PROCEDURAL BACKGROUND

On September 21, 2020, Illumina, an American company specializing in genomic sequencing, announced its intention to acquire sole control of Grail, an American biotechnology company which relies on genomic sequencing to develop cancer screening tests, to “Launch New Era of Cancer Detection” (the Transaction).

The EUMR thresholds were not met by the Transaction, nor were any EU or EFTA Member State thresholds. The Transaction was therefore not notified to the EC nor any of the EU or EFTA Member States. However, on December 7, 2020, the EC received a complaint concerning the Transaction and, on investigation, reached the preliminary conclusion that the Transaction appeared to satisfy the Article 22 Conditions for referral to the EC by a national competition authority. The EC subsequently on February 19, 2021 sent a letter to the Member States (the Invitation Letter) to inform them of the Transaction and to invite them to submit a referral request under Article 22. The French competition authority obliged and other Member States subsequently requested, each in its own right, to join.

On March 11, 2021, the EC informed Illumina and Grail of the referral request (the Information Letter) and about a month later, on April 19, 2021, it accepted the referral request, along with the respective requests to join (the Contested Decisions). This prompted Illumina, supported by Grail, to file suit before the General Court (against the Contested Decisions and the Information Letter).

On substance, Illumina argued that (i) the EC lacked the competence to initiate, under Article 22 EUMR, an [...]

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Antitrust M&A Snapshot | Q1 2022

by Anthony S. Ferrara, Hannelore Wiame, Jon B. Dubrow, Joel R. Grosberg and Lisa P. Rumin | May 6, 2022 | DOJ Developments, EC Developments, EU Developments, French Developments, FTC Developments, Healthcare Antitrust, Mergers & Acquisitions

In the United States, antitrust agencies continue with their aggressive merger enforcement posture. The agencies challenged four transactions this quarter, including multiple vertical mergers. The agencies are increasingly skeptical of merger remedies, including behavioral remedies and divestitures. The Federal Trade Commission (FTC) and the Department of Justice (DOJ) are working together to update the current Horizontal Merger Guidelines. The updated guidelines will likely signal a more aggressive enforcement posture.

The European Commission (Commission) blocked one transaction in Phase II and cleared two transactions. Three transactions were abandoned after the Commission initiated a Phase II investigation. The Commission made use of partial referrals to member state national competition authorities in two cases. It also ordered Hungary to withdraw its decision to prohibit Vienna Insurance Group’s (VIG) acquisition of AEGON Group’s Hungarian subsidiaries on foreign direct investment grounds, holding that Hungary’s prohibition decision infringed Article 21 of the EU Merger Regulation.

In the United Kingdom, the first quarter of 2022 also saw a number of Phase II investigations. Specifically, the Competition and Markets Authority (CMA) cleared one transaction in Phase II and blocked two other transactions in Phase II. One transaction was abandoned after the CMA initiated a Phase II investigation. The CMA blocked the merger of Cargotec and Konecranes just one month after the EC cleared the transaction subject to commitments in Phase II. The parties abandoned the transaction following the CMA’s decision.

Access the full issue.

Annual European Competition Review 2021

by Jacques Buhart, Hendrik Viaene, Max Küttner, Karolien Van der Putten, Frédéric Pradelles, Mary Hecht and McDermott Will & Emery | Feb 4, 2022 | Brussels Developments, EC Developments, Energy/Commodities, EU Developments, French Developments, German Developments, Healthcare Antitrust, IP Antitrust, Italian Developments, Mergers & Acquisitions, Monopolization/Abuse of Dominance

In our super-connected age, we are inundated with information. It can be difficult to select what is really relevant to one’s business. The purpose of this Review is to provide legal counsel and their teams easy reference guidance on essential EU competition law developments covering key areas of law and policy, to help keep you up to date on the latest requirements.

Inside you’ll find:

Cartels and Restrictive Agreements
From geo-blocking to pay-for-delay agreements and bid-rigging, find out the latest legal developments in restrictive practices.

Abuse of Dominant Position
Excessive pricing in the healthcare sector and a monopoly on online searches are key areas of development.

Merger Control
Gun-jumping remains a real focus for the European courts, with additional judgments on the provision of misleading information in merger proceedings.

State Aid
Transfer pricing and rules governing subsidiaries are hot topics, with the courts keeping an eye on excess profits and tax rate schemes.

Legislative and Policy Developments
Digital markets is the focal point of policy development in Europe, as verticals agreements also come under scrutiny.

Click here to read the full Review.

Antitrust M&A Snapshot | Q4 2021

by Matt Evola, Mary Hecht, Jon B. Dubrow, Joel R. Grosberg and Lisa P. Rumin | Feb 1, 2022 | DOJ Developments, EC Developments, EU Developments, French Developments, FTC Developments, Mergers & Acquisitions

In the United States, antitrust agencies have now filled senior leadership positions, although the Federal Trade Commission (FTC) awaits the appointment of a fifth commissioner. Challenges to mergers continue apace at both the FTC and the Department of Justice (DOJ). The agencies challenged two mergers in the fourth quarter and a third transaction was abandoned. Additionally, nine consent orders were approved. The FTC is also including prior approval provisions in consent orders across industries, requiring parties seeking to settle merger disputes to agree to provide the FTC with greater rights to reject potential future deals.

The European Commission (Commission) imposed interim measures for the first time in the context of the Commission’s determination that Illumina’s acquisition of GRAIL was premature. The Commission conditionally cleared, in Phase I, Veolia’s acquisition of Suez—a transaction involving two French incumbents in the water and waste sectors—following comprehensive commitments. IAG withdrew from its proposed acquisition of Air Europa following the Commission’s decision not to approve the transaction absent further concessions.

In the United Kingdom, the Competition & Markets Authority (CMA) imposed a record fine of £50.5 million on Facebook for breaching an initial enforcement order related to its acquisition of Giphy, and ultimately required Facebook to sell Giphy. The CMA also updated its merger guidance in parallel with the entry into force of the UK National Security and Investment Act, published a new template for initial enforcement orders and updated its guidance on interim measures.

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Antitrust M&A Snapshot | FTC and DOJ Continue M&A Transaction Investigation While UK CMA Continues Role as Key Jurisdiction in Merger Clearance Process

by Carina Kant and Noah Feldman Greene | Feb 14, 2020 | DOJ Developments, EC Developments, EU Developments, French Developments, FTC Developments, Mergers & Acquisitions

Antitrust regulators in the United States and Europe were very active in the final quarter of 2019. The FTC and DOJ continue to investigate and challenge M&A transactions in a variety of industries. Events of this quarter highlight the importance of states in merger enforcement. As well, recent FTC activity highlights the regulators’ focus on preventing monopolists from buying nascent competitors.

In Europe, the UK CMA continues to expand its role as a key jurisdiction in the merger clearance process, which will only accelerate with Brexit. The EC agreed to clear, subject to conditions, acquisitions in the aluminum production and battery industries as well as in the wholesale supply and retail distribution of TV channels after conducting Phase II reviews. Moreover, the EC opened new in-depth investigations into transactions in the copper refining and engineering sectors.

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Annual European Competition Review 2019

by McDermott Will & Emery | Feb 3, 2020 | Brussels Developments, Cartel Enforcement, Consumer Protection/Privacy, EC Developments, EU Developments, French Developments, German Developments, Healthcare Antitrust, IP Antitrust, Mergers & Acquisitions, Monopolization/Abuse of Dominance

McDermott’s Annual European Competition Review summarizes key developments in European competition rules. During the previous year, several new regulations, notices and guidelines were issued by the European Commission. There were also many interesting cases decided by the General Court and the Court of Justice of the European Union. All these new rules and judicial decisions may be relevant for your company and your day-to-day practice.

In our super-connected age, we can be inundated by information from numerous sources and it is difficult to select what is really relevant to one’s business. The purpose of this review is to help general counsel and their teams to be aware of the essential updates.

This review was prepared by the Firm’s European Competition Team in Brussels and Paris. Throughout 2019 they have monitored legal developments and drafted the summary reports.

Access the full report.

Annual EU Competition Review 2018

by McDermott Will & Emery | Feb 21, 2019 | Cartel Enforcement, Distribution/Franchising, EC Developments, EU Developments, French Developments, Mergers & Acquisitions, Monopolization/Abuse of Dominance

McDermott’s Annual EU Competition Review summarizes key developments in EU competition rules. During the previous year, several new regulations, notices and guidelines were issued by the European Commission. There were also many interesting cases decided by the General Court and the Court of Justice of the European Union. All these new rules and judicial decisions may be relevant for your company and your day-to-day practice.

This review was prepared by the Firm’s European Competition Team in Brussels, Paris and Germany.

Access the full report.

French Competition Authority Fines a Pharmaceutical Laboratory EUR 25 Million for Anti-Generic Practices

by Elena Chutrova and McDermott Will & Emery | Jan 4, 2018 | French Developments, Healthcare Antitrust, Monopolization/Abuse of Dominance

On 20 December 2017, the French Competition Authority (the FCA) imposed a EUR 25 million fine on a pharmaceutical laboratory, for delaying entry onto the market of the generic version of Durogesic, and for hindering its development through a disparagement campaign.

No public version of the decision is available yet, nonetheless the FCA has already published a detailed press release (available in French).

WHAT HAPPENED

Durogesic is a powerful opioid analgesic, which active substance is fentanyl, usually prescribed in the form of transdermal patch for the treatment of severe pain, including chronic cancer pain. In 2007, a competing pharmaceutical company launched its generic equivalent. (more…)

Three Things To Know About French Merger Control

by Jacques Buhart | Dec 13, 2017 | EC Developments, EU Developments, French Developments, Joint Ventures/Competitor Collaboration, Mergers & Acquisitions

Jurisdictional thresholds

French merger control applies if the turnovers of the parties to a transaction (usually the acquirer(s) including its (their) group(s) of companies, and the target) exceeded, in the last financial year, certain (cumulative) thresholds provided in Article L. 430-2, I of the French Commercial Code (the “Code”):

Combined worldwide pre-tax turnover of all concerned parties > €150 million; and
French turnover achieved by at least two parties individually > €50 million euros; and
The transaction is not caught by the EU Merger Regulation.

Specific (and lower) thresholds exist for mergers in the retail sector or in French overseas departments or communities[1].

In the situation of an acquisition of joint control, a transaction can be notifiable where each of the acquirers meets the thresholds even if the target has no presence or turnover in France.

There is no exception applicable to foreign-to-foreign transactions.

Acquisitions of ‘non-controlling’ minority shareholdings are not notifiable.

Filing is mandatory and failure to file or early implementation can be sanctioned

Under Article L. 430-3 of the Code, a notifiable merger cannot be finalized before its clearance by the French Competition Authority (the “FCA”) but the Code does not provide any specific deadline for the notification. There is no filing fee.

Failure to notify a reportable transaction can be sanctioned by the FCA as follows:

A daily penalty can be imposed on the notifying party(ies) until they notify the operation or demerge, as the case may be; and
A fine can be imposed on the notifying party(ies) up to:
- For corporate entities: 5% of their pre-tax turnover in France during the last financial year;
- For individuals: €1.5 million.

Due to the suspensive effect of the filing, these sanctions also apply when the parties start to implement a notified transaction before receiving clearance (so-called ‘gun jumping’) from the FCA.

Nevertheless, individual exemptions may be granted by the FCA to allow undertakings to close before receiving clearance; in practical terms, exemptions are exceptional and limited to circumstances where insolvency proceedings have been opened, or are about to be opened, in relation to the target.

Timeline of merger control procedure

The majority of notified transactions are cleared in Phase I, which lasts 25 business days as from the receipt by the FCA of a complete notification.

A simplified procedure, which lasts for about 15 business days, is available for non-problematic acquisitions, which is often the case for transactions involving private equity funds. Simplified procedures accounted for about 50% of the notified transactions between May 2016 and May 2017.

Phase II is reserved for problematic acquisitions requiring a deeper examination and takes at least an additional 65 business days.

In addition, parties can pre-notify a transaction with the FCA. The pre-notification procedure can prove to be very useful in order to confirm the notifiability of a transaction, the nature and amount of information that will be required by the FCA [...]

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