The French Competition Authority imposes a penalty on a merger below the thresholds under the rules on anti-competitive practices
Published on 23 October 2026
Following on from the CJEU's Towercast judgment, the French Competition Authority (FCA) has, for the first time in France, imposed a penalty on a merger that does not meet the control thresholds, under the prohibition on anti-competitive agreements.
Background:
In France, merger control is governed by thresholds that determine whether a proposed transaction is subject to scrutiny. If the thresholds are met, the transaction must be notified to the FCA for authorisation prior to its implementation (ex-ante control). If the thresholds are not met, the transaction is not subject to merger control. It may, however, be subject to scrutiny under the rules on anti-competitive practices, and here cartels!
The case: an island market on the verge of monopolisation
Healthcare waste posing an infection risk (DASRI) is subject to a strictly regulated disposal system, governed by the Public Health Code and overseen by the Regional Health Agency. Its management involves a chain of successive operations, from initial sorting through to final treatment, including collection and transport.
On the island of La Réunion, this market operated until 2020 on a dual basis: two operators shared the treatment business, with Point Net dominating the market with around 80 per cent of the share, and Ecolys holding the remainder. It was against this backdrop that Drapkoc, Ecolys's parent company, acquired the entire share capital of its competitor Point Net in November 2019, giving rise to Ecostrill, now the sole operator in the island's medical waste treatment market and the dominant player in the collection and transport market with a market share of over 80 per cent.
The FCA considered that this situation conferred particularly strong market-locking power on Ecostrill. Access to the treatment market requires obtaining an administrative authorisation, the processing of which can take several years, having suitable storage facilities, and meeting strict traceability requirements. Added to this is the geographical constraint inherent in an island territory: no alternative solutions are available on the island, and the export of waste is not a realistic alternative. In the collection and transport market, competing operators therefore find themselves in a situation of structural dependence on Ecostrill, with no ability to exert competitive pressure or to exercise any countervailing influence over pricing.
The FCA therefore considered that the merger was likely to have "at least potential" effects on the relevant market and created a situation of dependency on the part of customers. It sanctioned the merger under the prohibition on anti-competitive agreements (Article L.420-1 of the Commercial Code), for the first time, with a symbolic fine of 1 euro.
The decision: an unprecedented sanction based on competition law
The signal the FCA wishes to send with this case is significant. Indeed, its chairman states this clearly and in bold in his press release: "(…) a non-notifiable merger that produces anti-competitive effects falls within the scope of competition rules. (…)Companies must factor this risk into their operations at an early stage: falling below the thresholds does not confer immunity in the event of a significant deterioration in competition."
Whilst it had already been anticipated – particularly since the meat-cutting sector case (Case No. 24-D-05, which was, however, ultimately dismissed) – that the FCA would take up certain merger transactions falling below the control thresholds, this provides a concrete example that can no longer be ignored in any M&A transaction.
Even below the French control thresholds, the FCA may sanction the transaction on the grounds of anti-competitive practices (prohibition of cartels or abuse of a dominant position). This risk must be identified and addressed prior to the proposed transaction.
As a reminder, under Article L.420-3 of the Commercial Code, any agreement relating to an anti-competitive practice is null and void. Furthermore, under Article L.464-2 of the Commercial Code, it may give rise to penalties of up to 10 per cent of the global turnover of the undertakings concerned. Not to mention any compensation that may be claimed by the victims of the prohibited anti-competitive conduct, for which the Competition Authority's decision serves as irrefutable proof of fault…
