Introduction

The French Competition Authority (FCA) is considering amendments to the French merger control law to review below-threshold mergers as part of a public consultation closing on 16 February 2025[1]. The FCA has outlined three potential options:

- Option 1: Introducing a call-in power to mandate notification of mergers not meeting the national merger thresholds.

- Option 2: Introducing a mandatory notification requirement for certain companies.

- Option 3: Using antitrust provisions post-merger implementation.

While several European countries have already adopted Options 1 and 3, Option 2 is inspired by Switzerland, where firms deemed dominant by a final and non-appealable decision must notify all mergers. However, the French proposal goes further, requiring notification when a firm has:

- Been subject to a merger prohibition decision or a clearance decision with commitments or

- Been fined or had commitments imposed for abuse of dominance under European or French antitrust law or

- Been designated as a gatekeeper under the Digital Markets Act (DMA).

Under Article 14 of the DMA, designated gatekeepers have a reporting obligation to inform the European Commission of all intended acquisitions in the digital sector. The French proposal would transform this reporting obligation into a mandatory notification requirement at the national level of all acquisitions, not only in the digital sector.

This analysis focuses exclusively on the mandatory notification requirement for gatekeepers. If implemented, this measure would disproportionately increase regulatory burdens for gatekeepers and inflate administrative costs for the FCA, despite no clear evidence that most gatekeeper mergers pose competition concerns[2].

Assessment

The Digital Markets Act (DMA) seeks to ensure contestability and fairness by imposing obligations on designated gatekeepers in some digital markets. Among these, gatekeepers must inform the European Commission of all intended acquisitions in the digital sector, including those involving data collection, if they qualify as a concentration under the European Merger Regulation (EUMR).

This reporting obligation serves two primary functions. First, it allows the Commission to track gatekeepers' acquisition strategies, providing insights into market trends and expansion. Second, it enables National Competition Authorities (NCAs) to refer acquisitions to the Commission under the referral mechanism of Article 22 EUMR, potentially triggering a merger review[3].

In this way, the reporting obligation complements the EUMR’s referral mechanism, allowing the Commission to review below-threshold mergers.

However, in the Illumina v. Commission ruling, the European Court of Justice (ECJ) restricted the Commission’s ability to accept referrals unless the acquisition met national merger control thresholds, citing concerns over legal certainty. This decision has two major implications.

First, the Commission has to adjust its merger policy. While the Commission is still considering a policy response to the ruling, it encourages NCAs to refer acquisitions when they have jurisdiction, such as in the NVIDIA/Run: ai merger, where Italy used its call-in power to review the deal[4].

Second, the Commission has to rethink its DMA policy, seeking alternative ways to review gatekeepers’ acquisitions when NCAs lack jurisdiction. The French consultation is part of this broader effort to identify necessary tools to scrutinise below-threshold mergers.

The French proposal would change the DMA’s reporting obligation into a mandatory notification requirement for all gatekeepers' acquisitions in France. This would grant the FCA the power to review gatekeeper mergers at the national level and refer them to the Commission for further scrutiny at the European level.

As of 11 February 2025, since the DMA’s reporting obligation took effect on 5 September 2023 for the first list of designated gatekeepers (Alphabet, Amazon, Apple, ByteDance, Meta and Microsoft), 13 acquisitions have been reported (Table 1)[5].

Table 1: List of acquisitions reported under the DMA

Source: European Commission.

Aside from the Microsoft/Activision merger, none of these acquisitions have been notified under the EUMR. However, the Microsoft/Activision merger review started on 30 September 2022, before the reporting obligation applied to Microsoft[6].

Additionally, the Commission attempted to review Microsoft’s partnership with Inflection.AI via the referral mechanism, but the NCAs making the referral requests withdrew them following the Illumina ruling, as the deal did not meet their national merger control thresholds[7].

This raises key questions about the effectiveness of the DMA’s reporting obligation, as it has never been used to require a gatekeeper to notify the Commission of a reported acquisition, thanks to the referral mechanism. However, the Commission has not explained why none of the reported acquisitions have been referred.

The lack of referral could stem from NCAs lacking jurisdiction or incentives to scrutinise or refer the acquisitions to the Commission.

However, even when NCAs have call-in powers, as in Denmark, Hungary, Iceland, Ireland, Italy, Latvia, Lithuania, Norway, Slovenia, and Sweden, they have not used them to refer gatekeepers’ acquisitions to the Commission. This suggests that either call-in powers are ineffective in catching these acquisitions due to a lack of competences (e.g., the acquisition has no nexus with the territory) or NCAs see no competition concerns, reducing their incentive to act.

In the latter case, assuming NCAs had the ability but lacked the incentive to refer gatekeepers’ acquisitions to the Commission, this suggests that mandatory notification would not significantly improve merger scrutiny of problematic mergers. Instead, it would increase regulatory burdens for gatekeepers, raise administrative costs for competition authorities, and likely lead to unnecessary merger reviews of transactions unlikely to harm competition.

Recommendation

While this assessment is limited by the lack of information (no explanation for the absence of referral) and the small sample size (only 13 reported acquisitions), it suggests that introducing a mandatory notification requirement for gatekeepers at the French level would be unnecessary and disproportionate, given that most gatekeepers’ acquisitions have not raised competition concerns.

However, if the FCA were to adopt mandatory notification to increase the likelihood of reviewing potentially problematic mergers, it would not necessarily achieve this goal. The requirement must include a local nexus condition, ensuring that only acquisitions with a substantial link to France, such as the target company having significant operations in the country, are subject to review.

The absence of a local nexus has already prevented the German Competition Authority from reviewing the Microsoft/Inflection.AI partnership[8], prompting its president to call for revisions to the German merger control law[9].

Accordingly, even if mandatory notification were introduced, it would not guarantee that the FCA could review all gatekeeper acquisitions, particularly those lacking a clear connection to the French market.

[1] Autorité de la concurrence, Public Consultation on the Introduction of a Merger Control Framework for Addressing Below-Threshold Mergers, 14 January 2025 (accessed 10 February 2025). Available at: https://www.autoritedelaconcurrence.fr/en/press-release/public-consultation-introduction-merger-control-framework-addressing-below-threshold

[2] Christophe Carugati, Which Mergers Should The European Commission Review Under The Digital Markets Act?, Bruegel, 9 December 2022 (accessed 10 February 2025). Available at: https://www.bruegel.org/policy-brief/which-mergers-should-european-commission-review-under-digital-markets-act

[3] For a deeper analysis, see Christophe Carugati, How Should Europe Revamp Merger Policy for Non-Notifiable Deals?, Digital Competition, 24 September 2024 (accessed 10 February 2025). Available at: https://www.digital-competition.com/comment/how-should-europe-revamp-merger-policy-for-non-notifiable-deals%3F

[4] European Commission, Commission Approves Acquisition of Run:ai by NVIDIA, 20 December 2024 (accessed 10 February 2025). Available at: https://ec.europa.eu/commission/presscorner/detail/en/ip_24_6548

The parties are challenging the Commission’s decision before the ECJ. Lewis Crofts, Nvidia Goes to Court Over EU Regulator's Move to Review Run:ai deal, Mlex, 15 January 2025 (accessed 10 February 2025). Available at: https://www.mlex.com/mlex/articles/2284345/nvidia-goes-to-court-over-eu-regulator-s-move-to-review-run-ai-deal

[5] European Commission, List of Acquisitions (accessed 10 February 2025). Available at: https://digital-markets-act-cases.ec.europa.eu/acquisitions. The reporting obligation for Alphabet, Amazon, Apple, ByteDance, Meta and Microsoft started on 5 September 2023 and for Booking on 13 May 2024.

[6] European Commission, Case M.10646 Microsoft/Activision Blizzard (Accessed 10 February 2025). Available at: https://competition-cases.ec.europa.eu/cases/M.10646

[7] European Commission, Commission Takes Note of the Withdrawal of Referral Requests by Member States Concerning the Acquisition of Certain Assets of Inflection by Microsoft, 18 September 2024 (accessed 10 February 2025). Available at: https://ec.europa.eu/commission/presscorner/detail/en/ip_24_4727

[8] Bundeskartellamt, Taking Over Employees May Be Subject to Merger Control In Germany – Bundeskartellamt Not Competent to Review Microsoft/Inflection Transaction As Inflection Has No Substantial Operations in Germany, 29 November 2024 (accessed 10 February 2025). Available at: https://www.bundeskartellamt.de/SharedDocs/Meldung/EN/Pressemitteilungen/2024/29_11_2024_Microsoft.html

[9] Janith Aranze, Exclusive: German Authority Wants Rule Change to Catch AI Partnerships, Voices Call-In Concerns, GCR, 27 November 2024 (accessed 10 February 2025). Available at: https://globalcompetitionreview.com/article/exclusive-german-authority-wants-rule-change-catch-ai-partnerships-voices-call-in-concerns