On 8 November 2016, the French Competition Authority (“FCA”), setting a new precedent, handed down an 80 million euro fine against the Altice Group, a major actor in the telecommunications market, for having “jumped the gun” by acting in concert with target companies while merger control proceedings were still ongoing. 

In order for an ex-ante control to be effective, the parties in play must wait until the FCA has decided whether to approve of the transaction. That includes not only suspending the progress of the projected transaction, but the parties must continue to behave as regular competitors.

Here, the controlled operation consisted of a two-step “merger”: Altice had notified the FCA in 2014 of its proposed takeover of the SFR group, followed by that of the OTL group. Both operations were approved within the same year, and Altice proceeded to acquire the two groups thereafter.

After conducting its investigation, which included dawn raids and seizures of material in all three companies, the FCA fined Altice for going forward with the operations prior to receiving its formal approval. The FCA found that Altice and SFR had already started behaving, while the proceedings were still ongoing, as though their rapprochement had taken place.

To prove such anticompetitive behaviour, the FCA relied on circumstantial evidence which pointed towards the fact that Altice had exerted a determining influence on the companies it looked to absorb. The FCA identified three main types of behaviour which supported their charge of gun-jumping: 

  • Altice intervened in the operational management of the target companies: it played a decisive role in some of the strategic decisions, such as the choice to end a promotional offer that originally was supposed to last longer, as well as management changes.
  • The economic ties between Altice and the target companies were strengthening before the FCA gave its formal approval,  such as through the implementation of a common business strategy and the development of new offers on the market – requiring months and months of preparation – only a few weeks after the FCA approved the mergers.
  • Certain confidential and strategic information was exchanged between Altice and the target companies.

Based on these elements, the FCA concluded that there was indeed gun-jumping, even though the acquisitions themselves, strictly speaking, took place after the FCA gave its formal approval.

The FCA justified the 80 million euro fine by the gravity, scale, and duration of the pre-approval behaviour, which had a substantial impact on competition.

Altice did not contest having engaged in these practices.

With this decision, the FCA has emphasized the need to wait until the formal outcome of the merger control proceedings before companies looking to merge with, or to take over others, may engage in concerted anti-competitive behaviour with their targets.