The French Competition Authority has penalized a business merger that fell below mandatory notification thresholds, marking the first time it has sanctioned an unnotified transaction under anti-competitive agreement rules.

The case centers on Réunion Island, where healthcare waste management company Drapkoc acquired sole control of its competitor, Point Net. The two entity’s operations subsequently merged into a new company named Ecostrill. Prior to the transaction, Point Net held roughly 80 percent of the island’s infectious healthcare waste treatment market, while Drapkoc’s subsidiary controlled the remaining 20 percent. Consequently, the merger effectively eliminated all local competition, granting Ecostrill an absolute monopoly over medical waste treatment and an 80 percent share in collection and transport.

Although the deal did not meet the revenue thresholds required for mandatory ex ante merger review, the regulator evaluated the transaction under Article L. 420-1 of the Commercial Code, which prohibits anti-competitive agreements. This legal pathway relies on the European Court of Justice’s 2023 Towercast precedent, which affirmed that competition authorities may apply general antitrust prohibitions to unnotifiable concentrations if they create severe market distortions.

In its analysis, the Authority concluded that the acquisition caused significant anti-competitive harm. The creation of a monopoly over infectious waste processing left hospitals, clinics, and independent collectors with no alternative providers. This vulnerability was compounded by high regulatory barriers to entry and Réunion’s isolated geographic position, which prevents waste from being easily exported or processed elsewhere. Competing collectors were forced to rely on Ecostrill to treat their waste, creating extreme market dependency.

Despite the severity of the market distortion, the Authority imposed a symbolic fine of just 1 euro each on the buyer and seller. The regulatory body noted that while symbolic penalties were appropriate for this initial application of the legal principle, companies must recognize that falling below merger control thresholds no longer offers immunity from antitrust scrutiny.

Benoît Cœuré, Chairman of the Competition Authority, emphasized that businesses must account for antitrust rules prior to finalizing transactions. The decision serves as an explicit warning across European jurisdictions: unnotified mergers that significantly harm market competition remain fully subject to enforcement and legal sanctions.