Highest ever fine for gun jumping

Earlier this month, the French Competition Authority (FCA) fined French-based Altice group and its telecommunications subsidiary, SFR, 80 million euros for the coordination of their commercial behaviour in the period between the acceptance of Altice's purchase offer for SFR and the FCA's merger clearance decision in respect of the proposed transaction.

Highest ever fine for gun jumping

This is the highest fine ever imposed by a competition authority on companies for gun jumping, namely the early implementation of a merger prior to its clearance in accordance with merger control rules.   

What happened?   

In March 2014, Altice and its cable operator subsidiary Numericable made an offer for the purchase of SFR. The offer was accepted in April 2014 and the share purchase agreement was executed in June 2014. The FCA cleared the transaction, subject to commitments, four months later in October 2014.   

The FCA considered that Altice had interfered in SFR's management and commercial policy, and that an excessive amount of strategic information was shared during the preparation of SFR and Numericable's integration between April and October 2014, at a time when the transaction had yet to be cleared. 

In particular, the FCA focussed on the following interventions by Altice in SFR's management and commercial policy: 

  • Altice's involvement in SFR's pricing and promotional policy; 
  • Altice's prior approval of SFR's participation in a tender offer; 
  • the joint negotiation and preparation of an offer by SFR in respect of Numericable's box, TV channel package and network offerings; and 
  • the approval by Altice's senior management of the renegotiation of certain aspects of the mobile network sharing agreement between SFR and Bouygues Telecom.  

The FCA also considered that Altice and SFR coordinated their behaviour in connection with the purchase of OTL, which supplies mobile phone services. The acquisition of OTL was originally contemplated by SFR but was eventually carried out by Altice in the weeks following the acceptance of Altice's purchase offer for SFR -- following disclosure to Altice's senior management of the amount of SFR's initial bid for OTL. The FCA considered that there had been illegal co-ordination of behaviour despite the fact that the possible acquisition of OTL by SFR could have had a direct impact on SFR's valuation and thus on the final amount and definitive structure of Altice's acquisition of SFR.  

More generally, the FCA considered that Numericable and SFR had shared an excessive amount of strategic information (in particular recent and forecast commercial data) while preparing for the integration of the businesses.   

The FCA also ruled that Altice had implemented the acquisition of OTL prior to clearance and, in particular, OTL's CEO had participated prematurely in SFR-Numericable group's decision-making as well as reporting monthly to Altice on OTL's commercial performance.   

The 80 million euro fine is the result of a settlement between the FCA, Altice and its subsidiary SFR.   


This fine forms part of the increasing trend for competition authorities worldwide to punish companies for gun-jumping. The US antitrust agencies have in the past been the most active enforcers of antitrust law with respect to gun-jumping, but authorities in Europe and elsewhere, as yesterday's fine evidences, are now taking a more aggressive approach. 

In addition to fines, this can also include "dawn raids" of companies between signing and completion to check for gun jumping. The FCA in this case, for example, conducted dawn raids on the premises of Numericable, SFR and OTL to gather evidence of gun jumping. The European Commission in 2007 during its in-depth inquiry of Ineos/Kerling conducted a dawn raid to check whether the merging parties were implementing the transaction early in breach of EU merger control rules (although it did not in the end find any evidence of violation).   

It is widely accepted that early transitional planning and rapid implementation are the key to success for most mergers.  However, this fine shows the importance for parties to rein in the understandable desire to start the process of integration at too early a stage. 

Merging parties need to implement an effective strategy which balances the limitations imposed by antitrust law and the business imperatives of detailed due diligence and early integration planning. This strategy involves obtaining specialised local merger control input to interpret the relevant rules and risks, and the provision of pragmatic guidance for those involved in integration planning. This is of particular importance to private equity buyers adding to their portfolios.

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