On 10 July 2013, the French competition authority published new merger control guidelines. These cover jurisdictional, procedural as well as substantive issues, and will apply to the assessment of all mergers from 10 July 2013.
The guidelines follow a public consultation launched in February and April 2013. They also take into account the experience that the French competition authority has gained since the publication of its 2009 merger guidelines in its recent cases and from its work within the European Competition Network (ECN), as well as French and EU case law.
The guidelines emphasise the importance of the pre-notification phase, and stress that this is an informal, flexible and quick procedure. They encourage companies to approach the authority at the pre-notification stage at whatever stage a transaction is at, particularly in complex cases or where the parties are considering a referral to the European Commission.
The guidelines set out the detail of the simplified procedure which entered into force after the 2009 merger guidelines were published. Under the simplified procedure, a shortened notification form can be completed for transactions which do not raise competition issues. The authority will also issue its decision within a shortened time period of 15 days following the receipt of a complete notification.
The simplified procedure applies when the purchaser is not on the same or neighbouring markets as the target. It also applies to acquisitions by companies who do numerous transactions per year, for example investment funds.
With respect to market definition methodology, the guidelines recommend the use of the hypothetical monopolist test or the "SSNIP" test ("small but significant non-transitory increase in price"). Under this test a market is defined as the smallest set of products over which a hypothetical monopolist would need to have control in order to be able profitably to raise prices by 5 to 10%.
The guidelines set out the different tests it will apply to the assessment of unilateral effects, namely the UPP test (Upward pricing pressure test), the GUPPI test (Gross upward pricing pressure index) or IPR test (illustrative price rise test).
The guidelines provide further detail on remedies by confirming its preference for structural as opposed to behavioural remedies. However, the authority nuances this position by recognising that the choice of a remedy depends on the effects of the transaction. Thus, in the case of horizontal overlaps, the authority considers that the divestment of assets is the most efficient remedy, while in the case of a risk of upstream or downstream foreclosure, under certain conditions, behavioural remedies might be sufficient.
In addition, the guidelines set out two alternative divestiture commitments and a trustee mandate which have been based on the European Commission's model and that of other national competition authorities.
The model text for divestiture commitments sets out a list of the required legal references and conditions, the divestiture procedure, and the minimum guarantees necessary for the maintenance of the viability of the divested assets.
Finally, the authority sets out the role, status, mission, conditions of independence, and engagement terms for a monitoring trustee
Please click here for a full copy of the guidelines.