Gun Jumping: record EUR 80 million fine imposed on Altice group by French Competition Authority

15 March 2017

On 8 November 2016, the French Competition Authority ("FCA") imposed a fine of EUR 80 million on Altice and SFR Group for having prematurely implemented two mergers notified in 2014.

In 2014, the Altice group, operating in France through its subsidiary Numericable, notified two transactions to the FCA. The first operation, concerning the acquisition of SFR Group, was cleared subject to commitments, on 30 October 2014. The second concentration, by which Altice acquired sole control over the OTL group, was cleared without commitments on 27 November 2014.

On the basis of a number of indications that pointed to possible gun-jumping, the FCA conducted dawn raids at the premises of SFR, OTL and Numericable. On the basis of the evidence gathered, the FCA concluded that, already before clearance, Altice was exerting a decisive influence on the target companies and obtained access to a significant amount of strategic information. However, the competition rules require that, until merger clearance is obtained, the parties to a merger should continue to behave independently and refrain from acting as a single entity (the "standstill obligation").

Regarding the first operation, the FCA noted, in particular, the following pre-clearance practices:

  • Intervention by Altice in SFR's operational management: Altice validated several important strategic decisions and intervened, as of June 2014, in SFR's policy.
  • Stronger economic ties between SFR and Numericable: during the standstill period, Altice and SFR prepared the launch of a new range of very high speed broadband internet access services under the SFR brand, using the Numericable network. 

As for the second operation, the FCA specifically observed:

  • Intervention of Altice in OTL's operational management and strategic decision-making on behalf of OTL (concerning, in particular, agreements to host OTL's mobile customers with network operators). 
  • Strategic information exchanges: Altice set up a weekly information reporting mechanism that allowed it access to commercially sensitive information. 

In terms of the scale of the practices sanctioned and the amount of the fine imposed, the FCA's decision is the first of its kind in Europe. The sanction takes into account, in particular, the importance of the operations, the extent and combination of the various types of behaviour that led to gun-jumping, the duration of the practices concerned and the deliberate nature of these practices.