Sustainability: The French Competition Authority outlines a competition law analytical framework for Citeo's ReUse project in informal guidance

The ReUse project emerged from a series of observations made by Citeo in 2023, including the inadequacy of existing individual initiatives to meet regulatory targets and the persistent cost premium of reusable packaging over single-use alternatives. This project seeks to establish a nationally harmonised scheme for household food packaging sold through large-scale retail outlets, and sits within the framework of European Regulation (EU) 2025/40 on packaging and packaging waste of 19 December 2024, which sets ambitious reuse targets for certain products by 2030 and 2040.

Although the information submitted by Citeo was deemed insufficient to allow a full assessment of the project's compatibility with competition rules — a finding that also underscores the broader difficulty faced by economic operators in obtaining definitive clearance from the FCA — the Rapporteur General nonetheless set out, in this case, a non-exhaustive analytical framework designed to guide stakeholders in the construction of the scheme. This aspect naturally draws our attention.

The FCA identifies, first and foremost, the potential risk of abuse of dominant position on the part of Citeo, given its considerable market power on the extended producer responsibility market concerned by the project. Applying well-established principles, the FCA considers that, as a dominant operator, Citeo must (i) refrain from structuring its participation in the ReUse project in a manner that unduly favours that project over other reuse initiatives, unless it can be justified by objective reasons or efficiency gains, and (ii) avoid any exclusionary conduct towards competing operators. Such exclusionary conduct could notably take the form of restrictive conditions governing access to standardised packaging and use of them, or Citeo's potential direct involvement in the scheme as manager of the financial flows associated with the deposit system. To mitigate these risks, the FCA refers to preventive measures such as the functional separation of activities or the entrusting of the management of the ReUse project to an independent third party.

The FCA further warns against the risk of cartel behaviour that could be evidenced by information exchanges or strategic alignment between competing eco-organism, particularly with regard to the level of competitiveness support that each eco-organism may grant to its members participating in the ReUse project. A cartel infringement could equally be established through exchanges of information between project members relating to individual cost data.

Finally, with respect to the governance of the ReUse project, the FCA recalls that, in order to preserve competition, contracts should be concluded for a limited duration or on terms allowing exit without penalty. As regards the selection of participants in the ReUse project, Citeo will be required to ensure that the membership criteria adopted can be objectively justified, that they are transparent, and that they are applied consistently — that is to say, in a non-discriminatory manner — to all prospective participants.

Through this guidance, the FCA sets out a non-exhaustive series of points to monitor in the ReUse project, without giving any conclusion concerning its ultimate assessment of compatibility or incompatibility of the ReUse project with competition law. These orientations nonetheless reflect the FCA's particular attention to collective schemes operated by dominant actors in extended producer responsibility sectors, at a time when reuse obligations are placing increasingly significant demands on economic operators.