The Court of Justice of the European Union (“CJEU”) has issued a preliminary ruling in case C- 449/21, Towercast SA SU v. Autorité de la concurrence dated 16 March 2023 (“Towercast case«”).
In 2017, Towercast, a company active on the French terrestrial television broadcasting market, filed a complaint with the French Competition Authority (“FCA”). The complaint was directed against the acquisition of control over Itas by TDF, the dominant operator on the market and – following the takeover – the only remaining competitor of Towercast. The acquisition was not notified to the FCA and the European Commission, as neither the French nor the European merger control turnover thresholds were met. Consequently, no ex ante concentration assessment has been carried out.
Towercast argued that the acquisition was a killer acquisition, i.e., that TDF acquired Itas solely to eliminate a competitor with particularly aggressive pricing tactics from the market. It thus alleged that the acquisition constituted – in itself – an abuse of a dominant position. The FCA rejected the application and Towercast brought an action against the FCA’s decision before the competent national court.
The French court referred a preliminary question to the CJEU in the context of its ruling on the case, namely:
whether it is possible for a national competition authority to carry out, in view of the prohibition of abuse of a dominant position laid down by EU law, an ex post control of a concentration operation performed by an undertaking in a dominant position, where that concentration remains below the relevant turnover thresholds laid down by the Merger Regulation[1] and by the national law on concentrations and has thus not been subject to an ex ante control in that regard.
In its judgment, the Court ruleed that a concentration operation with a non-EU dimension may be subject to an ex post control by the national competition authorities and by the national courts, on the basis of the direct effect of the prohibition of abuse of a dominant position laid down by EU law, having recourse to their own procedural rules for that purpose. When carrying out such a subsequent control in the light of the prohibition of abuse of a dominant position, the national competition authority must verify whether a purchaser who is in a dominant position on a given market and who has acquired control of another undertaking on that market has, by that conduct, substantially impeded competition on that market. The Merger Regulation thus does not exclude an ex post assessment of concentrations below the turnover threshold.
In practice, the CJEU’s decision therefore means that certain concentrations may be subject to ex post market behaviour review, even though they are not otherwise subject to ex ante concentration assessment under national law and the Merger Regulation.
[1] Council Regulation (EC) No 139/2004 of 20 January 2004 on the control of concentrations between undertakings (the Merger Regulation).
