Unlikely to harm competition – regulator approves Michelin’s Allopneus acquisition

French competition regulator the Autorité de la concurrence has approved the Michelin Group’s move to acquire sole control over French tyre e-tailer Allopneus SAS and its subsidiaries. In a statement published on 28 December, the Autorité said it cleared the deal unconditionally in the belief that it is “not likely to harm competition.”

Although the Michelin Group already jointly controlled Allopneus through a 40 per cent shareholding acquired in 2015, the Autorité analysed the potential competitive impact resulting from a 100 per cent acquisition, examining an Allopneus’ commercial policy that would solely take Michelin’s interest into account rather than the combined interest of two shareholders.

Little horizontal overlap

The Autorité identified little horizontal overlap in the parties’ activities within the replacement tyre wholesale and retail distribution market, as well as for the retail distribution of automotive spare parts and accessories. It also pointed out that the two players combined market shares would also be limited, and it sees significant competitive pressure, in particular from competing upstream operators such as Bridgestone and Goodyear or downstream entities such as 1001pneus, 123pneus, Norauto or Pneus Online1.

Furthermore, the Autorité doesn’t consider Allopneus’ role in stimulating market competition to be a unique one and believes no harm would come to the level of competition should Allopneus change its positioning post-acquisition.

No competitive risk through vertical effects

It also rules out competitive risk through vertical effects when combining Michelin and Allopneus’ upstream and downstream activities. The Autorité believes sufficient alternatives to Allopneus exist for other, competing tyre makers.

Consumers who buy tyres online look at multiple sources of information prior to purchasing and are sensitive to price, and in this context, the Autorité believes that Allopneus’ reputation and the uniqueness of its assembly network don’t provide a comparative advantage over competitors. Any attempt by Michelin to preferentially promote its products on the Allopneus site wouldn’t have an anti-competitive effect, it adds.

Nearly 4 million tyres are sold through Allopneus annually (according to 2018 figures), giving it an almost ten per cent share of France’s consumer tyre aftermarket. The company claims leadership within France’s online tyre sales and tyre fitting sector.