Case C‑449/21
Towercast SASU
v
Autorité de la concurrence
and
Ministre chargé de l’économie
(Request for a preliminary ruling from the cour d’appel de Paris)
Judgment of the Court (Second Chamber), 16 March 2023
(Reference for a preliminary ruling – Competition – Control of concentrations between undertakings – Regulation (EC) No 139/2004 – Article 21(1) – Exclusive application of that regulation to operations covered by the concept of ‘concentration’ – Scope – Concentration operation which has no Community dimension, is below the thresholds for mandatory ex ante control laid down in the law of a Member State and has not been referred to the European Commission – Control of such an operation by the competition authorities of that Member State in the light of Article 102 TFEU – Whether permissible)
1. Competition – EU rules – Application by the national competition authorities – Examination of a concentration operation which has no European dimension and does not fall within the scope of the merger control rules of the Member State concerned – Ex post control under Article 102 TFEU – Whether permissible
(Art. 102 TFEU; Council Regulation No 139/2004, Art. 21(1))
(see paragraphs 39, 41, 53, operative part)
2. Dominant position – Abuse – Prohibition – Direct effect – Consequences – Possibility for national competition authorities to apply Article 102 TFEU, by means of their own procedural rules, to a concentration operation which has no European dimension
(Art. 102 TFEU)
(see paragraphs 44-47, 50, 51)
3. Dominant position – Abuse – Definition – Concentration operation which has no European dimension – Included – Conditions
(Art. 102 TFEU)
(see paragraph 52)
Résumé
The French digital terrestrial television (DTT) broadcasting sector has been open to competition since its launch in 2005 and has become increasingly concentrated since then. As a result, by 2014, the only broadcasters remaining were Itas, Towercast and Télédiffusion de France (TDF). (1) Moreover, TDF held the majority of the market shares on both the upstream and downstream wholesale markets for DTT broadcasting, taken as markets with a national dimension.
In October 2016, TDF announced that it had taken control of its competitor Itas. The operation of acquiring Itas, which was below the relevant thresholds defined in Article 1 of the Merger Regulation (2) and the French Code de commerce (Commercial Code), was not notified or examined under the prior control of concentrations by the European Commission or by the Autorité de la concurrence (Competition Authority, France). Moreover, that operation did not give rise to a procedure for referral to the Commission under Article 22 of the Merger Regulation.
In those circumstances, Towercast lodged a complaint with the Competition Authority in which it alleged that the acquiring of control of Itas by TDF constituted an abuse of a dominant position, inasmuch as that acquisition of control hindered competition on the upstream and downstream wholesale markets for DTT broadcasting by significantly strengthening the dominant position of TDF on those markets.
By decision of 16 January 2020, the Competition Authority rejected that complaint. That authority performed a different analysis to that conducted by its investigating departments, taking the view, in essence, that the Merger Regulation applied exclusively to concentrations as defined in Article 3 of that regulation. According to the Competition Authority, where the undertaking concerned has not engaged in abuse which can be separated from such a concentration, that concentration is no longer covered by the prohibition of abuse of a dominant position laid down in Article 102 TFEU.
On 9 March 2020, Towercast brought proceedings before the cour d’appel de Paris (Court of Appeal, Paris, France) challenging that decision. That court asks the Court of Justice, in essence, whether it is possible for a national competition authority to carry out, in view of Article 102 TFEU, an ex post control of a concentration operation performed by an undertaking in a dominant position, where that concentration remains below the thresholds for prior control laid down by the Merger Regulation and by the national law on concentrations, such that it has not been subject to an ex ante control in that regard.
In its judgment, delivered today, the Court answers that question in the affirmative.
Findings of the Court
Under Article 21(1) of the Merger Regulation, that regulation ‘alone [is to] apply to concentrations as defined in Article 3’ thereof, to which Regulation No 1/2003 (3) is not, in principle, applicable.
In order to provide the referring court with an interpretation of that provision, as is sought by that court, the Court examines, first, the wording and legislative history of the provision and, second, the objectives and general scheme of the Merger Regulation.
Having regard to the wording of Article 21(1) of the Merger Regulation, the Court points out, first, that that provision is intended to govern the scope of that regulation with regard to the examination of concentration operations in relation to the scope of other pieces of secondary EU legislation concerning competition. By contrast, the examination of the wording of that provision does not answer the question of whether the provisions of primary law, and, in particular, Article 102 TFEU, remain applicable to a concentration of undertakings in a situation such as that in the main proceedings, where no ex ante control under the law on concentrations has been carried out.
Next, as regards the legislative history of Article 21(1) of the Merger Regulation, the Court notes that, in so far as it reproduces, in essence, the substance of Article 22 of Regulation No 4064/89 (4) that was previously applicable, that provision reflects the intention of the EU legislature to specify that the other regulations implementing competition law cease, in principle, to be applicable to all concentrations, including those constituting an abuse of a dominant position.
That being so, the Court observes, lastly, in its subsequent examination of the objectives and general scheme of the Merger Regulation, that, by Article 21(1) thereof, the EU legislature intended to make clear that that regulation is the only procedural instrument applicable to the prior and centralised examination of concentrations, and is intended to permit effective control of all concentrations in terms of their effect on the structure of competition. Therefore, far from depriving the competent authorities of the Member States of the possibility of applying the Treaty provisions on competition to concentrations as defined in Article 3 of the Merger Regulation, that regulation forms part of a legislative whole intended to implement Articles 101 and 102 TFEU and to establish a system of control ensuring that competition is not distorted in the internal market of the European Union.
It follows from the scheme of the Merger Regulation that, although that regulation introduces an ex ante control for concentration operations with a Community dimension, it does not preclude an ex post control of concentration operations that do not meet that threshold.
In that regard, the Court observes that the interpretation put forward by the Competition Authority ultimately amounts to ruling out the direct applicability of a provision of primary law by reason of the adoption of a piece of secondary legislation covering certain types of conduct of undertakings on the market. However, Article 102 TFEU is a provision having direct effect and its application is not conditional on the prior adoption of a procedural regulation, it being specified, moreover, that no exemption may be granted in respect of the prohibition of abuse of a dominant position laid down by that provision and that the list of abusive practices contained therein is not exhaustive.
In those circumstances, the Merger Regulation cannot preclude a concentration operation with a non-Community dimension, such as the operation at issue in the main proceedings, from being subject to a control by the national competition authorities and by the national courts, on the basis of the direct effect of Article 102 TFEU, having recourse to their own procedural rules.
It follows that a concentration operation which does not meet the respective thresholds for prior control laid down by the Merger Regulation and by the applicable national law may be subject to Article 102 TFEU where the conditions laid down in that article for establishing the existence of an abuse of a dominant position are satisfied. In particular, it is for the authority in question to verify that 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. In that regard, the mere finding that an undertaking’s position has been strengthened is not sufficient for a finding of abuse, since it must be established that the degree of dominance thus reached would substantially impede competition, that is to say, that only undertakings whose behaviour depends on the dominant undertaking would remain in the market.