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Sanctions and defence against abuse of a dominant position

By Yasmine EDDAM4 April 2025

Abuse of a dominant position exposes companies to considerable financial penalties. Fines can amount to 10% of worldwide turnover. Google, for example, was ordered to pay €2.4 billion for favouring its price comparison site in search results. Faced with these risks, and in order to better understand the bases of unfair competitionCompanies should be aware of possible defences and recent developments in case law.

The competition authority has extensive powers, including investigative measures, injunctions and financial penalties. Its approach is evolving towards a more economic analysis of practices. This trend opens up new defence possibilities for companies in a dominant position.

How can apparently abusive behaviour be justified? How can you defend yourself effectively? This article looks at the legal strategies available and the best practices to adopt.

Penalties for abuse of a dominant position

The central role of the Competition Authority

The Autorité de la concurrence is the main body responsible for controlling abuses of dominant positions in France. It acts either on its own initiative or on a complaint from a victim company, a professional body or the Minister for the Economy.

Article L. 462-6 of the French Commercial Code empowers the Authority to apply the prohibition on abuse of a dominant position. This provision applies in French domestic law. European Regulation 1/2003 also gives it jurisdiction to apply Article 102 of the TFEU in European Union law.

The procedure before the Authority comprises several stages:

Investigation phase conducted by the rapporteurs
Notification of grievances to the parties concerned
Submissions by the parties
Meeting before the AMF College
Reasoned decision

This procedure respects the adversarial principle and the rights of the defence.

Penalties incurred

The Autorité has an arsenal of sanctions at its disposal:

Financial finesfines: up to 10% of worldwide sales. The Authority takes into account the seriousness of the acts, the duration of the practices and any repetition.
InjunctionsThe Authority can order the cessation of abusive practices, modify contracts or grant access to essential infrastructure.
Precautionary measuresIn urgent cases, the Autorité may impose temporary measures to preserve competition pending its final decision.
Settlement procedureThe fine is reduced for companies that do not contest the grievances.
CommitmentsThe company can propose commitments to put an end to the competition concerns. This procedure avoids a formal condemnation.

For example, in its decision 09-D-24, the Autorité fined France Télécom €27.6 million for charging excessive prices on connections between Réunion and mainland France.

Legal recourse

The decisions of the Autorité may be appealed to the Paris Court of Appeal. This appeal does not have suspensive effect, unless the first president of the court decides otherwise.

The Court of Appeal exercises full control over the legal classification of the facts and the amount of the penalties. It may confirm, annul or reverse the decision of the Autorité.

Court of Appeal rulings may be appealed to the Court of Cassation. The Court of Cassation reviews the application of the law but does not re-examine the facts.

Possible exemptions and justifications

Legal exemption under Article L. 420-4 of the French Commercial Code

Unlike European Union law, French law provides a statutory exemption for abuses of a dominant position. Article L. 420-4, I, of the French Commercial Code states that practices are not subject to the prohibition in Article L. 420-2:

Resulting from the application of a legislative or regulatory text
the authors of which can justify that they have the effect of ensuring economic progress and that they allow users a fair share of the resulting benefit, without eliminating competition in respect of a substantial part of the products in question

However, this exemption remains largely theoretical. Neither the Conseil nor the Autorité de la concurrence has ever granted an exemption for an abuse of a dominant position on this basis.

Justification by objective necessity

Under the influence of European case law, the Autorité admits that apparently abusive behaviour may have "objective justifications".

In its decision 93-D-36 of 28 September 1993, the Council considered that restrictions on the marketing of spare parts for cameras "were justified by objective requirements relating to the establishment of a high-quality after-sales service".

This justification is examined at the stage when the abuse is qualified and not at the stage of a subsequent exemption.

Economic justifications (new approach)

The competition authorities' new approach emphasises the economic analysis of behaviour. Companies can justify their practices by demonstrating that they produce efficiency gains that outweigh the anti-competitive effects.

Article L. 420-4, III, of the French Commercial Code, as amended by the Law of 29 December 2016, now states that practices are not subject to Article L. 420-2 "where the perpetrators can justify that they are based on objective reasons derived from economic efficiency and which reserve for consumers a fair share of the resulting benefit".

To benefit from this justification, the company must demonstrate that:

Efficiency gains are real
Practice is essential to achieve these gains
Consumers benefit from some of these gains
Competition is not eliminated

For example, the marketing of "convergence" telephone offers combining mobile services and Internet access services can be justified by the efficiency gains it brings to consumers (Decision 09-D-15).

Defence strategies in the face of accusations of abuse

Challenging the definition of the relevant market

Defining the market is a crucial step. Too narrow a definition can artificially confer a dominant position on a company.

Possible arguments include:

Expand the product market by demonstrating substitutability with other products
Extend the geographical market by proving the absence of barriers to the movement of products
Challenging the method used by the Autorité to define the market

In the Google/Android case, the European Commission defined the market as being limited to operating systems for smartphones. Google challenged this definition, arguing that its system also competed with Apple's iOS.

Contesting the existence of a dominant position

Even in a properly defined market, a company can contest its existence on the basis of a "market test". dominant position:

Putting the importance of market share into perspective
Demonstrate the absence of significant barriers to entry
Proving the existence of countervailing buyer power
Highlighting strong potential competition

Case law recognises that a large market share is not always sufficient to establish a dominant position, particularly in dynamic markets characterised by innovation.

Challenging the abusive nature of the behaviour

The company can demonstrate that its behaviour falls within the scope of normal competition:

Prove the absence of actual or potential anti-competitive effects
Showing that practice is part of a "competition on merit".
Justify practice on the basis of objective considerations (quality, safety)
Demonstrate the efficiency gains resulting from the practice

In its decision 10-D-39, the Autorité considered that an Orange pricing practice was not abusive because it had only been of limited duration and had not been able to produce significant effects on the market.

Present commitments

The commitments procedure offers a way out without admission of guilt. The company proposes measures that address the competition concerns.

This procedure has a number of advantages:

Avoiding formal condemnation
Escaping fines
Help define remedies
Preserving the company's image

Google proposed commitments concerning its practices in the online advertising sector (decision 10-D-30).

Good practice and preventive measures

Regularly assess your competitive position

Companies must:

Periodically analyse their position in the markets in which they operate
Monitor changes in their market share
Assessing the degree of market concentration
Identify existing barriers to entry

This assessment enables the commercial strategy to be adapted to the company's competitive status.

Setting up a compliance programme

A compliance programme includes:

Training sales and marketing teams
Establishing internal procedures for validating sensitive practices
Regular audits of commercial practices
Documenting objective justifications for practices

This programme helps prevent risks and provides evidence in the event of a dispute.

Document economic justification

Faced with the more economic approach of the authorities, companies must:

Document efficiency gains in their practices
Gathering data on consumer benefits
Evaluate less restrictive alternatives
Prepare economic studies to support their arguments

This information will be invaluable in the event of proceedings before the Autorité.

Anticipating changes in competition law

The law on abuse of a dominant position is constantly evolving:

Monitoring recent decisions by the Autorité and the Commission
Anticipating new concerns (digital economy, data)
Adapting commercial practices to changes in case law
Regular consultation with experts in competition law

This legal watch enables us to adjust strategies before they become problematic.

Defending against an accusation of abuse of a dominant position requires a specialised legal expertise. Our firm can help you assess your practices and devise appropriate defence strategies. Contact us at secure your commercial developmentContact us for a personalised assessment of your situation.