An extract from The Dominance and Monopolies Review - 7th edition
Article L420-2 of the Commercial Code specifically mentions a number of abuses, including refusal to supply or deal, tying, or discriminatory practices. However, the list is not exhaustive.
The FCA can find that a company's behaviour is abusive by object or by effect. In past cases, the FCA found that abusive conduct could be established even in the absence of an actual effect on the market. Attempts to abuse a dominant position may, thus, in certain cases also be challenged. In SNCM, the Court found that a ferry line operator between Corsica and Marseilles abused its dominant position by submitting a global and indivisible offer (i.e., island-to-continent) to the call for tenders launched by the Corsican Transport Office, while its competitors submitted point-to-point (i.e., harbour-to-harbour) bids as required by the request for proposals. By doing so, SNCM did not allow the tendering authority to compare bids on a point-to-point basis, and to allocate the contract between several ferry operators. Although the bidding procedure was ultimately declared void by the administrative courts and therefore the practice did not have any effect, the FCA fined SNCM for its attempted abuse of a dominant position.ii Exclusionary abusesPredatory pricing
Predatory pricing is a pricing strategy whereby a dominant firm offers below-cost prices, thereby incurring losses or forgoing profits in the short term in order to eliminate actual or potential competition. The FCA relies on the EU Akzo test and considers that the following two situations create a presumption of predatory pricing:
- when the dominant company's prices are lower than the average variable costs (unless a company can convincingly explain that its behaviour did not result from a predatory strategy aimed at eliminating competitors); or
- when the company's prices are between average variable costs and average total costs, and there is clear and convincing evidence that its behaviour is part of a predatory strategy aimed at eliminating competitors.
French authorities use a slightly stricter, economics-based, test compared to the European Commission's approach: in particular, the FCA has to show that there is a realistic possibility of the dominant player recouping its losses. This may explain why, to date, there has been no successful precedent of predatory pricing where the FCA imposed a fine. While predatory pricing concerns were raised by the FCA in several cases, the FCA's investigations were ultimately closed, or generally ended with injunctions or commitments taken by the dominant undertaking to remedy those concerns.
In SNCF, the FCA held that the French rail operator pursued price-based exclusionary practices for its freight services activity by full-trainload because SNCF's prices, although higher than direct average variable costs, were lower than the costs that would be avoided over a three-year period if SNCF terminated its freight services activity by full-trainload. Although SNCF's pricing policy was not considered predatory, as the losses incurred by SNCF were sustainable and predated the opening-up of the sector to competition, the FCA nevertheless considered that it was abusive. The Paris Court of Appeal, however, overturned this part of the decision, considering that charging prices superior to average variable costs but inferior to average total costs could only be considered abusive based on evidence that the dominant firm had made specific plans to exclude competitors from the market. The Court found that the FCA had not sufficiently established the existence of an exclusionary strategy. However, in a second judgment after the case was referred back by the Supreme Court, the Paris Court of Appeal ultimately confirmed SNCF's abusive pricing policy, noting in particular that the FCA had applied a relevant cost test and had characterised an eviction strategy.
In Bottin Cartographes, following an opinion by the FCA, the Paris Court of Appeal dismissed a predatory pricing claim against Google. Bottin Cartographes, a competitor of Google in online mapping services, claimed that offering mapping services free of charge constituted an abusive predatory strategy. In its opinion, later confirmed by the Court, the FCA reaffirmed that for multi-product companies, the predation test to be conducted is a modified Akzo test, where only the incremental cost attributable to a given product should be taken into account (to the exclusion of common costs). In practice, average variable costs are to be replaced by average incremental costs, and average total costs by long-run average incremental costs. The FCA found that the relevant costs were the costs specifically associated with the allegedly abusive activity to the exclusion of common costs supported by Google in its capacity as a multi-service firm (in particular, the costs associated with the acquisition of the underlying maps were not relevant because Google would bear them in any event for its search engine activity). Conversely, the FCA and later the Court confirmed that where a product is offered in different versions (one basic, free version, and one premium, paid-for version), the revenues to be taken into account are those associated with all versions of the product. On this basis, the FCA and the Court of Appeal found that Google's revenues exceeded the total relevant costs, and even if Google's revenues could have been exceptionally lower than the corresponding average total costs, there was no evidence of a predatory strategy. On this last point, the FCA and the Court emphasised that it would have been impossible for Google to recoup the potential losses, and as such no predatory strategy could be found.
More recently, in Vendée Sea Crossings¸ the FCA recalled that, when implementing the Akzo test, and save for exceptional circumstances, the costs to be taken into account are, in principle, those that are actually incurred by the dominant undertaking itself, not those incurred by potential or actual competitors of the dominant undertaking. Following the Paris Court of Appeal's ruling of 2012, the FCA clearly identified incremental costs incurred by the RDPEV and compared the RDPEV's profits resulting from its commercial activity during the peak summer season with its average incremental costs, which correspond to the costs that could have been avoided had the transporter not operated any competitive activity during the peak summer season (including, for example, salaries, fuel and other costs related to marketing services, but excluding the owner's insurance premiums and the major repairs). The FCA concluded that the transporter's profits resulting from its commercial activity during the peak summer season actually exceeded its incremental costs. In any event, the FCA noted that RDPEV's pricing practice did not lead to any foreclosure effects on competitors, as one of its competitors was still active and had actually opened a new transport line since 2001, while the two other competitors exited the market almost 15 years after the practices at stake.Leveraging practices
Leveraging practices consist of a dominant firm taking advantage of its superior market position in a 'dominated' market to expand its position in another related market.
In PMU, the FCA expressed concerns that the French legal monopolist for offline horse race betting leveraged its position to exclude competitors from the competitive market for online horse race betting. In particular, the FCA was concerned that by pooling together its online and offline bets, PMU could attract more bettors, discourage potential new entrants and, in time, drive competitors out of the market, since a greater pool of bets allows for more complex and diversified bets. The winnings on successful bets can also be significantly higher because there would be a greater pool of debts. The FCA accepted commitments from PMU to stop pooling its online and offline bets, and that online and offline activities would be kept separate. Although this could be interpreted as coming close to 'an efficiency offence', because horse racing bettors precisely look for the highest possible winnings (as in any lottery), the FCA justified its preliminary findings by stating that its decision was consistent with the public policy objective of limiting the risk of addiction to online betting.
In Passenger Transport, the FCA accepted the commitments offered by SNCF to prevent its subsidiary Keolis from leveraging SNCF's monopoly in the railway passenger transport market into the competitive market for the urban transport of passengers (i.e., bus, metro, tram). More specifically, the FCA was concerned that Keolis could rely on its parent company's railway expertise to submit bids that are not replicable by competitors for the supply of advice and technical assistance to urban transport operators. To alleviate the FCA's concerns, SNCF committed, in particular, to the fact that only its subsidiaries that are fully independent from its railway passenger transport activities would respond to calls for tender regarding technical assistance to urban transport operators.
In Engie, the FCA found that Engie abused its dominant position by leveraging its position as the incumbent gas operator in order to obtain more contracts in the competitive gas and electricity markets. In particular, the FCA found that Engie used its historical customer database for regulated tariffs for gas to convert customers to market-based contracts for gas and electricity; used the business infrastructure and resources developed for its regulated tariff activity in order to offer new market-based contracts and win former customers back; and provided misleading sales arguments according to which Engie guaranteed a better security of gas supply than its competitors. The FCA considered that these practices were particularly harmful to competition as they were implemented at a time when the market was opening up to competition. Engie did not challenge the objections and settled the case against a €100 million fine.
In Funeral Services in the Ain Department, the FCA found that the funeral company Comtet, which was at the time running the only crematorium in Viriat, a town in the east of France, by virtue of a public service delegation agreement, had abused its dominant position by generating confusion about, on the one hand, its public service cremation mission and, on the other, its funeral product and service supply activities for which it competes with other funeral operators. In particular, the FCA took the view that advertising materials used by Comtet to promote its commercial services while also referring to its role as the Viriat crematorium sole manager aimed at leading grieving families to believe that Comtet was the only provider in the Ain department able to organise funerals that included a cremation service.Margin squeeze
Margin squeeze is a strategy whereby the dominant vertically integrated firm applies excessive prices on upstream products or services that make downstream customers' or rivals' activities unprofitable. French courts consider that margin squeezes restrict competition only if a potentially as-efficient competitor would be unable to enter the downstream market without incurring losses. Such restriction of competition may be presumed only when the products or services supplied to its competitors by the dominant firm are indispensable to enable them to compete on the downstream market.
In Eiffel Tower, the FCA found that TDF had implemented a margin-squeeze strategy in the market for the renewal of the national occupancy contract for audiovisual and radio broadcast from the Eiffel Tower site. Among other practices, the FCA found that the offers made by TDF to alternative operators for hosting services (which were indispensable to compete on the downstream market for the broadcasting of radio programmes from the Eiffel Tower) constituted a margin squeeze that did not allow alternative operators as efficient as TDF to submit competitive offers for the operation of the Eiffel Tower facilities. The FCA imposed a fine of €660,000 on TDF on these grounds.Exclusivity clauses
Exclusive dealings entered into by a dominant firm do not constitute a per se abuse under French law, provided that the dominant firm's behaviour does not result in additional foreclosure of its competitors. To assess whether exclusivity clauses may restrict competition, the FCA examines the clauses' scope and duration, the existence of a technical justification and the economic consideration granted to the customer.
In Mobile Telephony Equipment, the FCA was concerned about the duration (20 years) and the restrictive early termination terms of the agreements between mobile operators and TDF for the hosting of their antennae (in particular, early termination was possible only for very few sites each year), which created de facto exclusivity. To address these concerns, TDF offered commitments designed to allow mobile operators to obtain better conditions for the hosting of their antennae and in cases where they were to switch to alternative operators. TDF committed in particular to limit the duration of new hosting agreements to 10 years, to cap the penalties generated by early termination, and to increase the number of sites (or quota) for which early termination was possible.
In Sugar Beet, Saint-Louis Sucre claimed that Tereos, the number one sugar producer in the French market (and owner of the Beghin Say brand), abused its dominant position by entering into long-term exclusive contracts with sugar beet growers in the Picardy region, which represents about 40 per cent of French sugar beet production. The FCA found that the contractual terms offered by Tereos raised a number of concerns, especially in light of the opening up to competition of the French sugar procurement market following the abolition of sugar production quotas in October 2017:
- Tereos could potentially lock in all its growers until 2022 as it had introduced a five-year exclusivity commitment for producers willing to increase their beet production by 20 per cent, in addition to the 10-year commitment initially undertaken by Tereos' growers to cover usual beet tonnage;
- the articles of association of Tereos' cooperative did not expressly indicate that cooperative partners could supply part of their beet production to other sugar groups, such as Saint-Louis Sucre; and
- Tereos had required cooperative partners that wished to leave the cooperative to give a 12-month notice period (instead of three months), making it even more difficult to switch to Tereos' competitors.
In light of these concerns, Tereos offered a number of commitments that led the FCA to close its investigation.Loyalty rebates
Under French law, loyalty rebates granted by a dominant firm may be considered abusive when a discount tends to remove or restrict a buyer's freedom to choose its sources of supply absent a legitimate economic quid pro quo. The FCA considers that forward-looking quantitative rebates (as opposed to rebates based on historical sales) conditional upon individual orders, volumes or turnover as generally valid, because they tend to reflect efficiency gains and economies of scale. Other forms of loyalty rebates may be considered abusive.
In DTT Broadcasting, the FCA found that TDF had abused its dominant position by granting loyalty rebates to channel editors that hired TDF for a substantial share of their broadcasting sites. The FCA found that TDF generally granted rebates only if channel editors assigned TDF at least 70 per cent of their sites, which prevented other competitors from developing their activity, even though they also offered rebates to channel editors.Tying and bundling
Tying and bundling consist of tying or bundling two distinct products that typically belong to two different markets, either by forcing consumers to buy the tied products together or by providing them an incentive to buy the products together. The FCA considers that tying by a dominant firm may be abusive if the following two conditions are met: the tying and tied products are distinct products; and the tying practice is likely to lead to anticompetitive foreclosure.
In Golf Insurance, the FCA expressed concerns with respect to the inclusion of insurance products – which are theoretically optional – in the licence delivered by the French Golf Federation. The FCA was particularly concerned that the French Golf Federation used its legal monopoly on the delivery of licences to foreclose its rivals from the golf insurance market through tied selling. To address these concerns, the French Golf Federation accepted giving commitments to prevent tying practices. In 2015, the FCA adopted another decision, finding that these commitments were no longer justified given the developments in the market.
In Nespresso, the FCA accepted commitments addressing its concerns that Nespresso needlessly modified its coffee machines in order to discourage consumers from buying its competitors' coffee capsules, and falsely implied that only Nespresso coffee capsules were compatible with its own machines, so as to favour tied sales of its own capsules with its Nespresso machines and exclude its competitors' capsules. Nespresso committed to inform competing manufacturers of Nespresso-compatible coffee capsules of future technical changes in Nespresso machines so that they have time to adapt their own production and their communication towards consumers. Nespresso also committed to stop commenting on its competitors' capsules.
In Schneider Electric, the FCA was concerned that Schneider Electric had abused its dominant position by refusing to sell a significant number of spare parts necessary for the in-depth maintenance of its electric equipment to third-party maintenance providers unless they agreed to have Schneider Electric's own employees perform the associated maintenance services. Schneider Electric argued before the FCA that this restriction aimed at ensuring the safety of property and people as well as at protecting its business model, in particular its brand image, know-how and the expertise of its technicians. However, the FCA found that Schneider Electric's current policy was not necessary to achieve these objectives, as it was likely to constitute an unlawful tied sale by potentially preventing other maintenance providers from carrying out a full range of maintenance services on Schneider Electric's high voltage and low voltage equipment, which respectively account for around 70 and 60 per cent of equipment sales in France. The FCA found that it was also likely to deprive customers of services that might be cheaper and of higher quality. Schneider Electric offered commitments to address the FCA's concerns.Refusal to deal
The concept of refusal to deal is regularly used by the FCA. It covers a broad range of practices, such as the refusal to grant access to an essential facility or network, the refusal to supply products to existing or new customers, and the refusal to license intellectual property rights. The FCA's test is similar to the test adopted by the European Commission. Refusal to grant access to an essential facility is abusive if the following five conditions are met:
- the facility belongs to a dominant firm;
- access to the facility is necessary to compete in a related market;
- competitors cannot duplicate the facility at reasonable costs;
- the dominant firm unduly refuses access to the facility (or imposes unduly restrictive conditions); and
- access to the facility is possible.
The same principles apply mutatis mutandis for refusal to supply a product or service. Concerning intellectual property rights, French courts consider that software may constitute an essential facility only if it is proved that the software is indispensable to operate on a market, and a competitor could not develop an alternative software under economically reasonable conditions (even if such economic conditions were less favourable than those under which the dominant undertaking operates). In practice, the following facilities have been considered essential under French law: transport facilities, the electricity network, the telephone network, and certain databases or software.
In SNCF, the FCA and the Paris Court of Appeal considered that SNCF abused its dominant position by restricting access to the railway infrastructure:
- delaying the release of information concerning access to freight yards, thereby preventing its competitors from accessing rail capacities essential to their business activity;
- retaining exclusive use of certain railway cars that are used for large tonnage transportation and constitute an essential part of the infrastructure; and
- pursuing a train path overbooking policy that prevented its rivals from participating in certain calls for tenders or honouring certain contracts.
In Cegedim, the FCA fined Cegedim, a company active both in the provision of healthcare databases and customer relation management (CRM) software for refusing access to its database of medical information to pharmaceutical laboratories that used the CRM software of one of its competitors, Euris. The FCA considered that Cegedim's database was not an essential facility because there were alternative, albeit inferior, rival databases. However, such a refusal to deal nevertheless amounted to an abuse of a dominant position, since Cegedim was found to discriminate against customers using Euris' CRM software in order to foreclose Euris from the CRM market (the FCA pointed out that the practice had caused Euris to lose 70 per cent of its customers between 2008 and 2012). In 2015, the Paris Court of Appeal upheld the FCA's decision and considered in particular that the practices implemented by Cegedim had unjustifiably disadvantaged Euris in terms of costs and reputation. The French Supreme Court validated the Court's reasoning.Termination of a contractual relationship
The termination of on-going commercial relationships may also be sanctioned on the basis of Article L420-2 of the Commercial Code; in particular, in cases of sudden termination of an established commercial relationship, if it has an anticompetitive object or anticompetitive effects, whether actual or potential.
In Satellite TV Decoders, the FCA expressed concerns about GCP's decision to terminate its Canal Ready partnership with third-party decoder manufacturers. Up until July 2014, in order to receive GCP linear programs by satellite, consumers had to use one of the decoders rented out by GCP or insert a card in a decoder that they could purchase from an authorised third-party decoder manufacturer that had concluded a Canal Ready partnership agreement with GCP (the card-only system). However, in July 2014, GCP decided to put an end to its card-only system and to terminate its Canal Ready partnership agreements owing to content piracy affecting third-party decoders. While the FCA noted that a company, even when it holds a dominant position, is free to modify its strategic model or its business plan as long as these changes do not have an anticompetitive object and can be justified by legitimate reasons, it also clearly stated that a rapid and sudden change can, in some circumstances, amount to an abuse of dominance, depending on the justification brought forward for this decision, the conditions in which it takes place and the effects such decision has on competitors or third parties. In this case, according to the FCA's preliminary assessment, GCP's plan necessarily led to the exclusion of third-party decoder manufacturers from the market and could deprive actual and potential consumers from having the option to purchase decoders that were potentially cheaper or offered different features. While taking into account GCP's piracy concerns, the FCA therefore held that the termination of the card-only system had to be surrounded by appropriate measures to remedy the FCA's concerns, which led GCP to offer commitments.Disparagement
Under French law, disparagement consists of publicly discrediting an identified competitor or its identified products or services. The FCA considers that disparagement is distinct from criticism as it originates from an economic player seeking to benefit from an unjustified competitive advantage by discrediting its competitor or products, and may constitute an abuse of dominance (when disparagement originates from a dominant player).
In Sanofi and Schering-Plough, the FCA fined two pharmaceutical companies for disparagement that consisted of widely publicising differences between their originator drug (or the generic manufactured by the producer of the originator drug) and other generic drugs at the time of the entry of the generic drugs into the market. Irrespective of whether such differences were verified or not, the companies could not prove that they had therapeutic consequences. Although neither Sanofi nor Schering-Plough had explicitly presented generic drugs as being inferior, but only pointed at factual differences, the very fact of shedding doubts without scientific supporting evidence was found to be abusive by the FCA. Sanofi was fined €40.6 million and Schering-Plough was fined €15.3 million.
In Janssen-Cilag, the FCA imposed a fine of €25 million on Janssen-Cilag for having first prevented and then restricted the development of the generic versions of its Durogesic drug in France, following the expiry of the patent protection for fentanyl. In particular, the FCA found that Janssen-Cilag had submitted legally unfounded arguments to the National Agency for the Safety of Medicines and Health Products (AFSSAPS) aimed at casting doubts on the innocuousness and effectiveness of the generic drug. This led the French authority to temporarily refuse to recognise the generic status of Ratiopharm's fentanyl drug. The AFSSAPS ultimately granted generic status to Ratiopharm's drug after a delay of more than a year, but added a warning to this authorisation, recommending careful medical supervision of some patients switching from one fentanyl drug to another. In addition, the FCA found that once the authorisation had been granted, Janssen-Cilag started a massive disparagement campaign of the generic drugs among health professionals, using different media and channels, with the aim of discrediting the generic drugs' reputation by highlighting quantitative, qualitative and size differences from the Durogesic patch. The FCA also considered that Janssen-Cilag distorted the content of the warning issued by the AFSSAPS by providing an inaccurate and incomplete presentation of the risks associated with substitution. The FCA concluded that Janssen-Cilag's practices constituted a single and continuous infringement that had significant foreclosure effects on competitors by delaying the arrival of generics, and then contributing to their low penetration rate, on a market already characterised by the reluctance of healthcare professionals to prescribe generics.
However, in 2018, the FCA recalled in IT Maintenance that commercial brochures and letters sent by server manufacturers to their customers, be they more or less aggressive, in order to put forward their main 'selling points' compared with third-party maintainers cannot be considered as a disparagement practice. The FCA noted that the same conclusion applies to confidential letters exchanged between a customer and its suppliers competing for a contract: at most, excessive statements contained in these confidential communications could amount to unfair business practices, not to an abuse of dominance.Most-favoured nation clauses
In Booking.com, the FCA accepted commitments addressing its preliminary concerns that the most-favoured nation (MFN) clauses imposed by Booking.com could have exclusionary effects. MFN clauses prevented hotels from offering to rival reservation platforms or other distribution channels (including through their own sales channels) lower prices or better commercial conditions (i.e., availability, services) than to Booking.com. In particular, the FCA considered that these clauses could prevent smaller platforms and new entrants from gaining market shares by offering lower prices or better services to customers, including by offering lower commission rates to hotels.iii Exploitative abuses
Exploitative abuses consist of a dominant firm imposing 'unbalanced' conditions on its trading partners, and, in particular, imposing excessively high prices. The imposition of high prices by a dominant undertaking might infringe Article L420-2 of the Commercial Code when prices charged are excessive because they have no reasonable relation to the economic value of the product or service supplied; in particular, where the difference between the costs actually incurred and the price actually charged is excessive and where the price imposed is either unfair in itself or when compared with competing products. Relying on EU case law, the FCA recently recalled that if the price difference is significant and persistent, it will be indicative of an abuse. It is then for the dominant undertaking to show that its prices are fair by reference to objective factors.
In 2009, the FCA fined Orange in the Telecommunication in Overseas Départements case. In this case, the FCA investigated the rates applied by Orange for connection services between Réunion Island and the mainland, and found that 'there existed a clear disproportion between these rates and the value of the services', which resulted in the imposition of excessive pricing on consumers (residential and professional), and hindered the development of the high-speed market on Réunion Island, and the development of Orange's competitors.
More recently, in 2018, the FCA fined Sanicorse, the only infectious waste treatment company in Corsica, for having abused its dominant position by imposing excessively high price increases on healthcare establishments. While recalling that the role of competition authorities is to protect the competitive conditions that allow market players to freely determine market prices and not to be a price regulator, the FCA also noted that it can intervene to assess and sanction a pricing policy when a dominant company implements an exploitative strategy on captive clients, taking into consideration the market conditions and the economic and legal context in which this pricing policy takes place. The FCA found that Sanicorse implemented significant price increases for more than four years and without any prior notice. Sanicorse also threatened to terminate its contracts with healthcare establishments or refrain from bidding in tenders, leaving its customers with no choice but to accept its new pricing conditions. The average price imposed by Sanicorse increased by around 60 per cent over the period and some hospitals reported individual price increases of up to 194 per cent. The FCA found that such price increases could not be justified by Sanicorse's increased costs and additional investments.
In Petanque Balls, the FCA imposed a fine of €320,000 on Obut for imposing resale prices on some of its distributors. The FCA considered that Obut was in a dominant position in the market for the production of petanque balls for competitions and abused its dominant position in the market for the distribution of petanque balls, in which Obut was also active, by imposing resale prices so as to reduce price competition with other retailers. In addition, Obut's sales forces monitored compliance with the suggested list prices, and threatened distributors with delayed deliveries, blocked orders and delisting in cases of deviation. In its decision, the FCA noted that such practices are also prohibited under Article L420-1 of the Commercial Code, but decided to rely on Article L420-2 of the Commercial Code.iv Discrimination
Abusive discrimination basically consists of the application by a dominant company of dissimilar conditions to trading partners in equivalent transactions, thereby placing certain trading partners at a competitive disadvantage. The FCA considers that discriminatory practices may restrict competition when the dominant firm competes on the downstream market and discriminates against rivals (first-line discrimination); or the dominant firm is not active downstream but discriminates between its customers, thereby altering competition between them (secondary-line discrimination). While first-line discrimination is an exclusionary abuse, second-line discrimination is considered by the FCA as an exploitative abuse (although it results in the exclusion of a trading partner rather than in any exploitation by the dominant firm).
In Electronic Communications, the FCA found that Orange gave access to more comprehensive information regarding the operation of the copper local loop to its own commercial entities than to third-party operators. The FCA considered that the (first-line) discrimination in the access to information had artificially strengthened Orange's dominant position, and affected third-party operators by making them appear less reactive and less informed than Orange.
In 2018, in Photovoltaic Electricity, the FCA dismissed a first-line discriminatory claim concerning favouritism practices carried out by EDF in favour of its subsidiaries (Enedis and RTE) that were likely to unduly foreclose downstream competitors. The core of the allegations was based on EDF's discriminatory treatment with regard to the filing date of applications for connection to the photovoltaic electricity grid. Relying on the EU MEO precedent, the FCA pointed out that it is necessary, based on concrete market conditions, economic and legal context and having regard to the circumstances of the case, to demonstrate that the discriminatory conduct in question is likely to produce a competitive disadvantage through a distortion of competition among business partners. The FCA also recalled that setting a de minimis threshold in order to determine the existence of an abuse of dominance was not justified, but specified, however, that for discrimination to be likely to create a competitive disadvantage, it must affect the interests of the operator concerned. Therefore, in Photovoltaic Electricity, the FCA held that EDF's behaviour, though it may have caused an individual prejudice to Enedis and RTE's business partners, did not tend, having regard to the circumstances of the case, to lead to a distortion of competition between undertakings on the downstream market.
In NavX, the FCA took a strict approach towards secondary-line discrimination, suggesting that dominant firms have an obligation to treat all of their customers equally, even when the dominant undertaking is not active in the downstream market. In particular, the FCA found that the rules defined by Google for the operation of its AdWords (now Google Ads) advertising platform should be applied to all advertisers in an 'objective, transparent and non-discriminatory manner', and that discriminatory treatments could be considered abusive. The FCA ultimately accepted commitments from Google to clarify certain rules applicable to advertisers; in particular, in respect of the conditions of suspension of their AdWords account.