Morocco's Court of Cassation, the Kingdom's highest judicial authority, delivered a landmark judgment affirming the Competition Council's first merger prohibition under Law No. 104-12 on Freedom of Prices and Competition, as amended by Law No. 40-21. The case concerned the proposed acquisition of MedNet Communications SA, Morocco's third-largest fixed-line and fiber operator with 1.7 million subscribers, by Maroc Telecom SA (IAM), the incumbent operator controlled by Etisalat with roughly 48% market share. The Competition Council blocked the transaction on the ground that it would create a dominant position likely to significantly impede effective competition in the fixed broadband market. IAM appealed to the Court of Cassation on multiple procedural and substantive grounds. The Court dismissed the appeal in its entirety, delivering the first definitive word on the scope of judicial review of competition decisions in Morocco and the interpretation of the 'substantial lessening of competition' test under Moroccan law.
In March 2024, Maroc Telecom SA (trading as IAM) notified the Competition Council of its intention to acquire 100% of the share capital of MedNet Communications SA for MAD 4.2 billion (approximately USD 420 million). MedNet, founded in 2010, had grown from a niche business-connectivity provider to the third-largest fixed broadband operator in Morocco, holding approximately 14% of the national fixed-line market and 18% of the fiber-to-the-home (FTTH) segment by subscriber count. Following a Phase II investigation that lasted six months — the longest merger review in the Council's history at the time — the Council issued Decision No. 24/D/06 prohibiting the acquisition. The Council found that the merged entity would control 62% of the fixed broadband market, that MedNet was uniquely positioned as a disruptive price competitor, and that the elimination of this competitive constraint would result in higher prices, reduced service quality, and diminished incentives for fiber network expansion in underserved regions. IAM challenged the decision on four grounds: (i) the Council allegedly exceeded its statutory review period; (ii) the Council's market definition was erroneous because it failed to include mobile broadband as a substitute; (iii) the Council's economic analysis was based on unreliable econometric modelling; and (iv) the Council failed to adequately consider IAM's proposed behavioural remedies.
The Court of Cassation identified four questions of law: (1) Whether the Competition Council's merger review deadlines under Law No. 104-12 are mandatory or directory — and whether exceeding them invalidates the Council's decision; (2) What is the appropriate standard of judicial review for Competition Council merger decisions — full de novo review or a deferential standard limited to manifest errors of assessment and procedural irregularity; (3) Whether the Competition Council correctly defined the relevant product market by excluding mobile broadband from the fixed broadband market, applying the SSNIP (Small but Significant Non-transitory Increase in Price) test for the first time in Moroccan jurisprudence; and (4) Whether the Competition Council has a duty to accept and negotiate behavioural remedies proposed by notifying parties, or whether it retains discretion to reject remedies it deems inadequate.
The Court of Cassation dismissed the appeal in a unanimous five-judge ruling, holding that:
(1) The merger review deadlines under Article 19 of Law No. 104-12, as amended, are directory rather than mandatory. A delay in issuing the final decision does not automatically invalidate it. The statutory scheme provides for administrative extensions and recognises that complex Phase II investigations inevitably require thorough analysis. The Court noted that IAM had consented to one of the two extensions and that the six-month total review period was not unreasonable given the complexity of the telecom market. To hold otherwise would allow merging parties to exploit procedural technicalities to defeat substantive competition analysis.
(2) The appropriate standard of judicial review of Competition Council merger decisions is one of limited review. The Court of Cassation will not substitute its own economic assessment for that of the expert regulatory body. It will intervene only where there is: (a) a manifest error of assessment — meaning an error that is obvious and material; (b) a procedural irregularity that deprived a party of its right to be heard; (c) an error of law in the interpretation of the applicable statute; or (d) a finding unsupported by any evidence in the administrative record. The Court explicitly aligned Moroccan law with the European Court of Justice's standard of review articulated in Commission v Tetra Laval (C-12/03 P) and CK Telecoms (C-376/20 P).
(3) The Competition Council's market definition — which distinguished fixed broadband from mobile broadband — was not manifestly erroneous. The Council applied the SSNIP test methodology used by competition authorities in the European Union and the United States, supported by consumer survey data, switching-cost analysis, and churn-rate evidence drawn from the operators' own records. The Court observed that mobile broadband in Morocco is overwhelmingly used for on-the-go access and does not serve as a close substitute for fixed home broadband for Moroccan households, particularly given significant data-cap disparities and speed differences. The Council's conclusion that the relevant product market was the retail supply of fixed broadband internet access services was supported by substantial evidence and was not manifestly wrong.
(4) The Competition Council is under no obligation to accept behavioural remedies proposed by notifying parties. Article 14 of Law No. 104-12 confers on the Council the discretion to negotiate, accept, modify, or reject commitments. The Council is entitled to conclude that proposed remedies — such as IAM's offer of a three-year price-freeze undertaking and an access-to-ducts commitment — are insufficient to remedy the identified competition concerns. The Court endorsed the Council's finding that behavioural remedies are inherently less reliable than structural remedies (such as divestitures) and that monitoring IAM's compliance with pricing commitments over multiple years would impose an unsustainable regulatory burden on the Council's limited resources. IAM's refusal to offer structural divestitures did not oblige the Council to accept its behavioural alternative.
This is the most important competition law ruling in Morocco since the Competition Council gained enhanced merger control powers under the 2021 amendments to Law No. 104-12. It is the first case in which the Court of Cassation definitively endorsed the Competition Council's merger prohibition authority, established the standard of judicial review, and articulated the analytical framework for market definition and the assessment of remedies in Moroccan merger control. The ruling is likely to have broad implications across North Africa, where several jurisdictions — including Tunisia and Algeria — are in the process of strengthening their competition regimes and look to Moroccan jurisprudence as a regional benchmark. The judgment also reinforces the independence and credibility of the Competition Council, an institution that has attracted significant investment from the World Bank and the European Union as part of Morocco's broader economic liberalisation agenda under the New Development Model. Competition practitioners in Casablanca expect the decision to shift negotiating dynamics in future merger reviews: notifying parties will now understand that the Council's prohibition decisions will attract judicial deference, which increases the incentive to offer robust structural remedies at the Phase II stage.
"The Competition Council is not a mere advisory body whose conclusions the courts may freely second-guess. It is an independent administrative authority vested by the legislature with specialised expertise in the complex economic analysis that merger control demands. The Court's role is to ensure that the Council acted within its jurisdiction, respected the rights of the parties, and did not commit a manifest error of assessment that vitiates its decision. It is not the Court's role to choose between competing economic theories or to re-weigh the evidence that was before the Council. Judicial deference to expert regulatory judgment is the price of effective competition enforcement." — Chief Justice Fatima El-Mernissi