After gun jumping, failure to meet commitments: another sanction for Altice/SFR Group

The operation was subject to conditions since the FCA considered that, after the operation, SFR would have little incentive to pursue the deployment of the optical fibre infrastructure, to the detriment of Bouygues Telecom. Indeed, some optical fibre infrastructures which SFR planned to implement in cooperation with Bouygues (Faber agreement) were already implemented through the Numericâble (Altice) network.

The new entity had therefore committed to effectively pursue the implementation of the Faber agreement with Bouygues in (i) connecting buildings to the horizontal optical fibre network co-financed by Bouygues under the Faber agreement, and (ii) ensuring transparent, non-discriminatory network maintenance.

The FCA however identified that SFR did not proceed to the connections in due time and that the maintenance was abnormally long or inexistent.

Therefore, on 08 March 2017, the FCA issued a decision by which it sanctioned Altice/SFR Group for failure to honour its commitments.

The FCA considered that these failures were particularly serious, since the agreed commitments had been almost completely devoid of substance.

In such case, the FCA could have decided to withdraw the merger clearance. However, the FCA considered that less coercive measures could also preserve competition. The FCA therefore decided that, due to the nature of the commitments and the failures and to the necessity to guarantee the development of the optical fibre through the Faber agreement, Altice/SFR Group would be subject to (i) a fine and (ii) injunctions with financial penalties.

For such infringement, the fine can amount up to 5% of the French turnover of the purchasing entity achieved during the last financial year, increased, as the case may be, by the turnover achieved by the acquired entity during the same period.

Altice/SFR Group was fined €40m (the maximum potential fine amounted to €551.95m).

As for the injunctions, the FCA imposed a new calendar to Altice/SFR Group for the setting of connection points to the optical infrastructure. An independent representative will control and monitor the respect of this new calendar and of an effective maintenance.

Interestingly, the FCA pronounced injunctions with daily financial penalties in case of delay of performance. This is the first time that the FCA uses this possibility, which was made possible by the Law of 06 August 2015 (Law Macron).