On 8 November 2016, the French Competition Authority (FCA) published a press release announcing that it imposed a fine of EUR 80 million on the Altice Group (Altice Luxembourg and SFR Group) for implementing two transactions prior to obtaining merger control clearance (i.e. in breach of the standstill period). This is the first time the FCA has imposed fines for so-called “gun jumping” practices. It is also one of the highest fines worldwide ever enforced for such a practice.

In 2014, Altice, active in the French telecom market through its subsidiary Numericable, notified its projected acquisitions of SFR (the second largest French telecom operator) and OTL (commercializing telecom services under the brand “Virgin Mobile”). The acquisition of SFR was cleared in phase 2 subject to commitments in October 2014, while the acquisition of OTL received unconditional phase 1 clearance in November 2014. In April 2015, the FCA conducted a dawn raid on the premises of Numericable, SFR and OTL. The FCA reported finding evidence that Altice was involved in SFR business and strategy prior to the clearance, notably in approving participation of SFR to a public tender, assisting SFR in renegotiating a network sharing agreement with Bouygues Telecom, determining the prices of SFR Internet retail offers and coordinating with SFR in the context of OTL’s acquisition. The FCA also reported finding evidence that the Altice and SFR teams had started implementing a global coordinated strategy during the standstill period with a view to launching a new, high speed, internet package of offers issued only a few days after the clearance. The FCA concluded Altice and SFR were guilty of having exchanged strategic and sensitive information prior to the clearance. Eventually, the FCA reported finding similar evidence of SFR’s involvement in OTL business during the standstill period.

The gravity and extent of the described practices is the reason for the FCA’s imposition of such a large fine, and highlights the importance of the Altice-SFR merger on the French market. The message sent by the FCA is clear: it will not tolerate any infringement to the standstill obligation, under which the parties must refrain from implementing a transaction prior to obtaining the merger control clearing. Gun jumping issues must be taken seriously especially when French merger control is triggered and parties should put in place all appropriate measures and safeguards to mitigate potential exposure from the due diligence phase until closing.