08 January 2016

French Competition Authority fines Orange €350 million for engaging in anti-competitive practices

In 2010, following complaints by two competitors in the telecommunications market (Bouygues Telecom and SFR), the French Competition Authority (the FCA) launched investigations into France Télécom and Orange France (together, Orange) in the sector of electronic communications services to non-residential customers.

On 7 August 2015, a new settlement procedure was introduced in France whereby the FCA and the recipient of a Statement of Objections (SO) may agree on a minimum and maximum fine amount, if the recipient does not wish to challenge the issues set out in the SO (the Settlement Procedure).

On 6 March 2015, the FCA issued an SO to Orange and on 6 November 2015, Orange decided not to challenge it. Although the Settlement Procedure technically should only be applied to SOs issued after 7 August 2015, the FCA took into account the overall intent of the Settlement Procedure and offered Orange the option of settling for a maximum fine of €350 million.

The FCA found that Orange had a dominant position in the market for the provision of mobile electronic communications services to non-residential customers, which it abused by engaging in the following four anti-competitive practices:

  • On the wholesale segment, accessing information to which its competitors did not have access gave Orange an unfair advantage;
  • On the retail segment, applying loyalty and rebate programmes which were not based on merits crystalised Orange’s market shares;
  • On the retail segment, putting into place an elaborate system of loyalty programmes and rebates tied its clients to Orange through exclusivity conditions, and for longer periods of time; and
  • On the business segment, putting into place a system of exclusivity rebates relating to virtual private networks (VPNs) prevented customers from using competitors' VPNs.

Orange accepted the FCA’s offer and was fined €350 million on 17 December 2015. This is the highest individual fine ever imposed by the FCA. As part of its settlement package, Orange agreed (i) to discontinue its anti-competitive loyalty programs; (ii) refrain from engaging in such practices again; and (iii) not to challenge the FCA's decision.

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