When competition law climbed Mont Blanc: The Refuge du Goûter case

The decision made on 30 July 2015 by the French Competition Authority (FCA) in Refuge du Goûter (Gouter Hut) (Decision n. 15-D-12 sur les pratiques mises en œuvre par la Féderiaton française des clubs alpins et de montagne et le Compagnie de guides de Chamonix et de Saint Gervais dans le secteur des guide de haute montagne (accès au Mont Blanc par le refuge du Goûter)  ) is worth reading due to the highly peculiarity of the facts of the case. The Gouter Hut was strategically located at an altitude of 3,385 metres on the less difficulty itinerary towards the peak of Mont Blanc, the so-called 'voie royale'. Excursionists have to spend a night on the hut on their ascent. The owner of the hut, Féderation française des clubs alpins et de montagne or French Aassociation of Alpine Clubs (FFCAM), used to reserve 71 places of the 120 available each night to professional alpine guides.

In 2013 the French local authorities required the owner of the Gouter Hut to adopt a number of safety measures, considering the peculiar characteristics of the hut. FFCAM entrusted two associations of professional alpine guides, the Compagnie de guides de Chamonix Mont Blanc (GC) and the Bureau de guides de Saint Gervais Mont Blanc (SG), with the task to provide the safety services required to meet the conditions imposed by the public authorities. As consideration for the provisions of such services, FFCAM committed to allocate to GC and SG, or more precisely to their commercial branches, Compagnie de guides de Chamonix Voyage (GCV) and the Compgnie de Saint Gervais organisation (SGO), 24 of the 71 places reserved each day at the hut to professional guides.

Fearing that the above conducts might restrain competition, the FCA opened an Article 101 TFEU investigation against FFCAM as well as against GC and GCV, and SG ans SGO. The prelimary findings of the investigation run by the FCA indicated that the practices carried out by the FCA had a negative effect on competition in two distinct markets: the market for the booking of places for professional alpine guides and the market for the provisions of safety measures.

As for the market for the booking of places of professional alpine guides, the FCA noted that Gouter Hutdue, due to its favourable location, cannot be replaced by the nearby facilities. That said, the FCA identified a number of factors on the basis of which it believed that the conducts of the parties breached competition on this market. First, they parties were unable to provide a plausible explanation why SG and GC were paid for the safety service with the allotment of about a third of the places at the hut instead by a financial compensation. Second, the value of the compensation received by SG and GC were out of proportion with the costs for the provision of the safety services. Third, the booking terms and conditions that FFCAM applied to SG and GC were much more favourable than those applicable to their competitors. Taking into considerations these factors, the FCA reached the preliminary finding that the FFCAM concluded with SG and GC an agreement that gave the latter an undue competitive advantage over their rivals. As a result for the competitors of SG and GC the access to the hut to book a place for their guides was made more difficult by the parties.

As far as the market for the provisions of safety measures is concerned, the FCA noted that FFCAM awarded to GC and SG the contract for the provision of the necessary safety services in absence of a competitive tender procedure. Acting in this way, the parties may have prevented the competitors of GC and SG from bidding for such contract. Also in this market the effect of the conducts of the parties was to foreclose competitors.

To resolve such competition problems, the parties offered a set of behavioural commitments to be implemented immediately, and in any event, before the FCA adjudicated on their suitability to resolve those problems. Eventually, the FCA approved and made binding the commitments, closing the investigation with a commitment decision. The set of commitments approved by the FCA included the following obligations. First, the parties committed to terminate the agreement for the provision of the safety measures since March 2015. Second, they removed the quota of places reserved to GC, GCV, SG and SGO for the 2015 season. Third, FFCAM gave the undertaking to apply the same terms and conditions for the booking of all the customers. Fourth, FFCAM committed to select in future the suppliers of safety measures with competitive tender procedures. In Aprile 2015 FFCAM launched a competitive procedure for the provision of the safety measure for the 2015 season. However, the bids submitted in response to the tender notice were considered unsatisfactory. Therefore, FFCAM concluded an agreement with eight operators for the provision of such services, which, importantly, were paid in cash.

In conclusion, Refuge du Goûter well illustrates that competition law can climb up to the summit of Mont Blanc. Or, more down-to-earth, the FCA decision reminds that a vertical agreement, concluded by the owner of a facility and service suppliers, for which access to such facilities is indispensable to provide their services, may restrain competition when it frustrates the access of the competitors of the service suppliers to that facility. This was the case with Refuge du Goûter, where the agreement concluded by the owner of the hut with GC and SG may foreclose the rivals of GC and SG from the downstream market for excursions with professional alpine guides. Indeed, the agreement had the effect to discriminate against the rivals of GC and SG as for the terms and conditions of the access to an indispensable facility for the ascent to Mont Blanc as the Gouter Hut. is.