Antitrust Litigation 2021

Last Updated September 16, 2021

France

Law and Practice

Authors



Gide Loyrette Nouel was founded in Paris in 1920 and is a leading international law firm with 12 offices worldwide. With 550 lawyers, including over 100 partners, the firm offers legal advice and assistance across many disciplines to public and private sector institutions. Gide boasts a wealth of experience in antitrust procedures (cartels and abuse of dominant position) before the French Competition Authority, the EU Commission and other national competition authorities. The firm also has extensive expertise in private enforcement cases before commercial and civil courts, both in standalone and follow-on actions, and has gained extensive expertise in managing selective distribution networks for brand owners (analysing their agreements in the light of antitrust rules), as well as in the fight against grey-market players. Gide is also active in merger control before the EU Commission and the French Competition Authority, as well as before national competition authorities outside the EU.

Following the implementation of Directive 2014/104/EU of 26 November 2014 into French law by Ordinance No 2017-303 and a Decree on 9 March 2017, the antitrust activity of French courts has intensified. Several issues are recurrent, such as those related to the limitation period (and in particular its starting point), the jurisdiction of the courts in cases of international disputes and compensation for damages. Some key recent cases/decisions are summarised below.

Limitation Periods

Regarding the limitation period, the French courts ruled that it is the decision of the competition authority that finds anti-competitive practices that is the starting point for the limitation period (Council of State, 22 November 2019, SNCF Mobilités; French Supreme Court, 27 January 2021, No S 18-16.279). On the contrary, the hearing of the victim by the services of the French Competition Authority (FCA), the knowledge of a cartel through a press article or the imprecise knowledge of a cartel by a manager of the victim company are not sufficient to start the limitation period (High First Instance Civil Court of Paris, 23 September 2019, Carrefour v Johnson & Johnson, No 2017013944; Paris Court of Appeal, 14 April 2021, No 19/19448; French Supreme Court, 27 January 2021, No S 18-16.279).

Jurisdiction

Regarding the jurisdiction of the courts in the case of an international dispute, the French courts have applied the case law of the Court of Justice of the European Union (ECJ, 5 July 2018, FlyLal, C-27/17; ECJ, Tibor-Trans, 29 July 2019, C-451/18), where it ruled that the damage materialises at the place where the market is affected by the anti-competitive practices which, the victim claims, led to their damage (Paris Commercial Court, 9 April 2021, No 2020004977; Paris Court of Appeal, 7 January 2020, No 19/12553).

Damages Calculation

Regarding damages, the Paris Court of Appeal recently accepted the compensation of the loss of opportunity (Paris Court of Appeal, 8 February 2019, No 16/06164) and the suffering of moral damage as a result of "negotiating for years with suppliers who pretend to negotiate" (Paris Court of Appeal, 23 June 2021, No 17/0410).

Furthermore, in addition to the guidance provided on 23 March 2017 by the Ministry of Justice, new soft legal instruments are emerging to assist courts and parties in their private enforcement proceeding. In particular, the Paris Court of Appeal has published, on 1 March 2021, methodological sheets (guidance) on the evaluation of economic loss, including regarding private enforcement claims. These sheets provide useful guidelines on the applicable law, the limitation period, the damages that can be compensated and the elements of proof in the context of a claim stemming from an anti-competitive practice.

Another interesting point is the development of the use of criminal procedural law when launching investigations in relation to competition law issues, which was not particularly common until recently. Several cases initiated in recent years are currently in the hands of investigating judges under criminal law, which raises various questions, such as a potential overlap between the activities of the criminal courts and those of the FCA, the extent of their co-operation, the question of access to the relevant file for the parties, and the effect on leniency policy both in France and within the EU.

Article L 420-6 of the French Commercial Code (FCC) provides that any natural person who fraudulently takes a personal and decisive part in the conception, organisation or implementation of an infringement to competition law may incur a maximum prison term of four years and a fine of EUR75,000.

Article L 463-5 of the FCC authorises investigating judges and criminal courts to communicate to the FCA, at its request, documents contained in the criminal case file which are directly related to the facts being investigated by the FCA.

The FCA may also, pursuant to Article L462-6 of the FCC, refer a case to the public prosecutor when it considers that the facts appear to be of a nature justifying the application of Article L 420-6 of that code. However, the prosecutor decides what further action they intend to initiate further to this referral.

In addition, a law of 24 December 2020 gives the financial public prosecutor, the investigating judge and the criminal court of Paris concurrent jurisdiction throughout France for the prosecution, investigation and judgment of the offences provided for in Article L. 420-6 of the Commercial Code. The attribution to a specialised national prosecutor's office of concurrent jurisdiction in this area could lead to a strengthening of criminal law enforcement in regard to anti-competitive practices.

Ordinance No 2017-303 was adopted on 9 March 2017. Its substantive provisions relating to liability, burden of proof, presumptions and various questions on the admissibility of evidence are applicable to claims in which the infringement occurred after the Ordinance came into force (ie, 11 March 2017). As an exception, its procedural rules on disclosure and access to evidence are applicable to private enforcement claims brought before the competent courts from 26 December 2014 onwards.

In this context, some claimants try to use the provisions of the Ordinance before the courts even though there are not applicable ratione temporis. Nevertheless, and still very recently, the Paris Court of Appeal ruled that the provisions of the Ordinance were not applicable to private enforcement claims brought before the competent courts from 26 December 2014 (Paris Court of Appeal, 23 June 2021, RG No 17/0410).

The Ordinance is deemed to provide "special rules". Therefore, standard rules on liability and procedure remain in force for all issues not within its scope.

The standard provision applicable to private enforcement actions, whether follow-on or standalone, is Article 1240 of the French Civil Code on tortious liability, where the claimant must establish a "fault" (ie, an infringement of competition law), damage and a direct causal link between the fault and the damage suffered.

Compared to the standard regime where the claimant must establish these three fundamental elements, the Ordinance alleviates the claimant’s burden of proof. It creates a non-rebuttable presumption of the existence of a fault for all claims based on final infringement decisions adopted by the FCA or the EU Commission (Article L 481-2 of the FCC). Claimants also benefit from a rebuttable presumption that cartels cause harm (Article L 481-7 of the FCC).

Both follow-on and standalone proceedings are available under French law.

Although standalone actions are rarer, the Paris Commercial Court recently ruled that a company had implemented several practices of abuse of its dominant position (without prior sanction by the FCA) and, as such, awarded damages to the victim of the anti-competitive practice. In qualifying the abuse of dominant position, the Paris Commercial Court relied on a previous FCA decision concerning the same defendant (Paris Commercial Court, 10 February 2021, Oxone Technologies e.a c/ Google Ireland Ltd RG 2020035242).

Claims for damages resulting from anti-competitive practices fall within the exclusive jurisdiction of specialised courts of the judiciary pursuant to Article L 420-7 of the FCC, or administrative courts where the author (French Supreme Court 29 September 2004, EDF v SNIET) or the victim (Council of State, 19 December 2007, CAMPENON-BERNARD, Council of State, 10 July 2020, Lacroix Signalisation No 420045) of an anti-competitive practice is a public person. If this exclusive jurisdiction is violated, the document initiating the proceedings will be sanctioned by a rejection.

Eight Commercial Courts and eight High Civil Courts of First Instance have jurisdiction to deal with competition law litigation.

  • Commercial Courts: Marseille, Bordeaux, Lille, Fort-de-France, Lyon, Nancy, Paris and Rennes.
  • High First Instance Civil Courts: Marseille, Bordeaux, Lille, Fort-de-France, Lyon, Nancy, Paris and Rennes.

On appeal, the Paris Court of Appeal has exclusive jurisdiction.

In addition, specific chambers have been appointed at the Paris Commercial Court and at the Paris Court of Appeal to deal with competition law litigation.

The Courts have also set up international chambers competent for disputes affecting international trade. Before these chambers, pleadings may be conducted in English.

For proceedings that fall within the scope of Ordinance No 2017-303, final decisions of the FCA (ie, those that can no longer be overruled through ordinary appeal procedures) are binding and irrefutably establish the existence of a fault (Article L 481-2 paragraph 1 of the FCC).

The Ministry of Justice provided guidance in a  (soft legal instrument), dated 23 March 2017, to assist the courts and the parties in private enforcement litigation. The circulaire indicates that Article L 481-2 of the FCC is applicable to infringement decisions (including settlement decisions and injunction decisions) before the FCA and/or the EU Commission. Decisions that identify competition concerns, such as interim measures proceedings, or commitment decisions may serve as prima facie evidence.

Final decisions issued by another national competition authority (NCA) constitute evidence in support of the existence of a fault but are not binding (Article L 481-2 paragraph 2 of the FCC).

Article L 481-2 paragraph 3 states that national courts may not decide cases in a way that runs counter to a decision adopted by the EU Commission.

Before the FCA, the EU Commission (or another NCA) can be involved in damages actions using the amicus curiae instrument. Article 15 of Regulation No 1/2003 allows any NCA and the EU Commission, at the request of a national judge or on their own initiative, to submit their observations in cases where the application of competition law is involved. Such observations are, however, not binding on French courts.

Between 2006 and 2008, the EU Commission, through the amicus curiae instrument, intervened before national judges in competition disputes at least 18 times. More than half of these interventions took place before appeals courts. The instrument of amicus curiae, which is rarely used in practice, seems to have been implemented in the context of actions for damages before administrative courts where the public rapporteur (le rapporteur public) referred to the FCA observations (Council of State, 10 July 2020, Lacroix Signalisation No 420045).

According to the general principle of tortious liability under French law, the burden of proof rests on the claimant.

The standard provision applicable to private enforcement actions, whether follow-on or standalone, is Article 1240 of the FCC on tortious liability, where the claimant must establish a "fault" (ie, an infringement of competition law), damage and a direct causal link between the fault and the damage suffered.

However, for claims relating to infringements occurring after 11 March 2017, as discussed in 2.1 Legal Basis for a Claim, Ordinance No 2017-303 alleviates the claimant’s burden of proof. It creates a non-rebuttable presumption of fault for all claims based on final infringement decisions by the FCA (Article L 481-2 of the FCC). Claimants also benefit from a rebuttable presumption that cartels cause harm (Article L 481-7 of the FCC).

In the same way, and again as regards the infringements that occurred after the entry into force of the Ordinance, Article L 481-4 of the FCC provides that the direct or indirect purchaser of the products or services concerned by the anticompetitive practices is deemed not to have passed on the additional cost to its direct contractors, unless proof to the contrary is provided by the defendant, the author of the anticompetitive practice. Hence, for infringements that occur after 11 March 2017, the burden of proof for the pass-on defence rests on the defendant.

In a recent case, the Paris Court of Appeal rejected the claimant's argument challenging the expert's conclusions that there was no damage. The Court ruled that the provisions of Article L. 481-7 of the FCC, according to which it is presumed until proven otherwise that a cartel between competitors causes damage, is not applicable to a cartel that took place from September 1993 and February 2004. The Paris Court of Appeal then applied the transitional rules of French law strictly (Paris Court of Appeal, 23 June 2021, RG No 17/0410).

Claims can be brought by direct and indirect purchasers, pursuant to Article L481-5 of the FCC which refers to both types of purchasers.

The indirect purchaser, whether of goods or services, shall be deemed to have provided proof it incurred overcharges where it can prove that:

  • the defendant has committed an anti-competitive practice mentioned in Article L 481-1 of the FCC;
  • this practice has resulted in additional costs for the direct contractor of the defendant; and
  • it has purchased goods or used services affected by the anti-competitive practice, or purchased goods or used services derived from or containing them.

The defendant may, however, demonstrate that such additional cost was not passed on to the indirect buyer or that it was only partially passed on by its previous contractor.

The duration of proceedings will vary depending on the complexity of the case (procedural issues, stays of proceedings, communication of documents, expert opinions on the amount of damages, etc).

A stay of proceedings is often requested by defendants in private enforcement litigation pending the outcome of a parallel investigation by a competition authority and/or an appeals court.

On the basis of Articles 377 et seq of the French Civil Procedure Code (FCPC), a judge may, depending on the circumstances of the case, decide to recess the progress of the proceeding for a given period or until the occurrence of an event that they specify.

The grounds for a stay are the incidence a public enforcement decision can have on the judgment to come in the compensation claim and the need to guarantee the proper administration of justice.

On such grounds, French judges often grant stays of proceedings until the competent competition authority issues a final decision. The stay can be extended at the request of any party pending the decision of appeal courts as long as the judge is satisfied that the conditions set out above are fulfilled.

Hamon Law

Law No 2014-344 of 17 March 2014, the so-called Hamon Law, introduced a new form of collective action under French law in the event of damage resulting from various infringements (notably including anti-competitive practices) under a regulated regime open only to individual consumers.

This collective action may only be initiated after a final decision has been issued by the "competent national or European Union authorities or courts" establishing the infringement, and within a limitation period of five years from the final decision (Articles L 623-24 and L 623-25 of the French Consumer Code).

The action allows consumers who consider themselves to be victims of similar kinds of damage caused by one or more professionals, for which they would not bring an action before the courts because of the low amount of potential compensation or because they are unaware of existing actions and procedures, to have their rights collectively recognised.

Consumers must be in a similar legal situation with regard to the identified breach. However, the damage suffered need not be identical. Consumers must have expressed their unequivocal willingness to participate in the collective action (opt-in system).

Only consumers, defined as natural persons acting for non-professional purposes, can seek compensation for their loss through collective action.

A collective action can be brought on behalf of both direct and indirect purchasers.

So far, this new set of rules has more often been used in consumer law proceedings (eg, wrongful information provided to consumers especially in the e-commerce, life-insurance, car or housing businesses) than in competition law matters.

Syndicate Actions

Aside from this specific form of collective action, associations and syndicates gathering economic operators together (such as farmers, manufacturers, distributors, hotel managers, etc) can claim for the compensation of the "collective interest" of a given profession or business sector, which is not the same as the cumulative individual interests of their members.

Recently, the High First Instance Civil Court of Rennes ruled in a case initiated by a professional syndicate seeking compensation for the damage caused by the phosphates cartel, condemned in 2010 by the EU Commission. It held that the syndicate had both the interest and the standing to sue for compensation for the harm caused to the collective interest by the actions of a cartel affecting the community of its members (High First Instance Civil Court of Rennes, 7 October 2019, FRSEA v Roullier).

This is known under French law as an action syndicale based on Article L 2132-3 of the French Labour Code and Article L 490-10 of the FCC.

Article L 623-1 of the French Consumer Code provides that only nationally representative consumer associations authorised by public authorities may bring a collective action against one or more professionals. In this respect, consumers are not parties to the proceedings in the procedural sense.

In France, the associations which are legally authorised to bring collective actions are the following:

  • the Conseil National des Associations Familiales Laïques (Cnafal), the Confédération des Associations Familiales Catholiques (CNAFC), the Confédération Syndicale des Familles (CSF), Familles de France and Familles Rurales, grouped together within the Union Nationale des Associations Familiales (Unaf) for family matters;
  • the Association de Défense, d'Éducation et d'Information du Consommateur (Adeic), Association Force Ouvrière de Consommateurs (AFOC), Indecosa-CGT and the Association Léo Lagrange pour la Défense des Consommateurs (ALLDC) for trade unions;
  • the UFC-Que Choisir and the Consommation Logement Cadre de vie (CLCV) for consumer issues;
  • the Confédération Générale du Logement (CGL) and the Confédération Nationale du Logement (CNL) for housing; and
  • the Fédération Nationale des Associations d'Usagers des Transports (Fnaut) for transport.

Article L623-22 of the FCC provides that only the applicant association may take part in a mediation in order to obtain compensation for the individual losses suffered by the consumers that it represents.

The agreement resulting from the mediation must be submitted to the judge for approval (Article L 623-22 of the French Consumer Code). This certification will ensure that the agreement is in accordance with the interests of the parties and will make it enforceable.

Before French High First Instance Civil Courts and Commercial Courts, a pre-trial judge is designated to guarantee the fairness of the proceedings, specifically regarding the timely exchange of pleadings and the production of documents, when applicable.

Pre-trial judges are also competent to rule on various procedural issues but they cannot issue summary judgments on the merits of a case. All claims are answered by the court within the final ruling on the merits.

Jurisdiction

In international disputes, the relevant jurisdiction is determined pursuant to EU international private law or French international private law, depending on the foreign state or states involved.

The relevant rules of EU international private law can be found in Regulation No 1215/2012 of 12 December 2012 (Brussels I Recast Regulation). A defendant domiciled in an EU member state may be sued in the courts of that state (Article 4). It may only be sued in the courts of another member state under certain conditions.

In matters relating to tort (delict or quasi-délit), the general rule is that the courts of the place where the harmful event occurred have jurisdiction (Article 7 Section 2). This covers both the place where the event giving rise to the damage occurred, and the place where the damage was suffered.

The ECJ has laid down an initial interpretation of the concept of "harmful event" in the context of an action for compensation following a cartel. It has ruled that the place of the causal event and the place where the damage resulting from the harmful event materialises are, respectively, the place where the collusive meetings were held and the place where the victim has their registered office (ECJ, Cartel Damage Claims (CDC) Hydrogen Peroxide SA v Akzo Nobel NV, 21 May 2015, C-352/13).

More recently, in two judgments concerning, respectively, an action for damages following an abuse of a dominant position and a vertical cartel, and one following a horizontal cartel, the ECJ ruled that the damage materialises at the place where the market is affected by the anti-competitive practices within which the victim claims to have suffered their damage (ECJ, 5 July 2018, FlyLal, C-27/17; ECJ, Tibor-Trans, 29 July 2019, C-451/18).

The French courts have also applied the principle of the FlyLal and Tibor-Trans judgments. Indeed, in a very recent case concerning an action for damages by the price comparison service Twenga as a result of anti-competitive practices implemented by Google and sanctioned by the European Commission (the Google Shopping decision of 2017), the Paris Commercial Court considered that it had jurisdiction since (i) Twenga provided evidence that it carried out all of its price comparison activity from its head office in Paris (and not from its foreign subsidiaries); and (ii) Twenga's French entity was solely responsible for the design, publication and management of all websites, whether they were intended for a French or foreign audience (Paris Commercial Court, 9 April 2021, No 2020004977; see also: Paris Court of Appeal, 7 January 2020, No 19/12553).

Where the defendant is not domiciled in a member state, French courts will apply French international private law. Under French law, in matters relating to tort (delict or quasi-délit), the alleged victim shall bring their claim before the courts of the country where the defendant is domiciled or before the courts of the places where the harmful event occurred or where the loss was suffered (Article 46 of the FCPC).

Applicable Law

Under French law, the law applicable to contractual obligations is determined in accordance with the provisions of Regulation No 593/2008 of 17 June 2008 (Rome I Regulation), and the law applicable to non-contractual obligations is determined pursuant to the provisions of Regulation No 864/2007 of 11 July 2007 (Rome II Regulation). Whether an obligation is contractual or non-contractual (ie, tortious) must be assessed from an EU law perspective, in light of the rulings of the European Court of Justice.

From a general perspective, the law applicable to a non-contractual obligation arising out of a tort is the law of the country in which the damage occurred (Article 4 Section 1 Rome II Regulation), unless the alleged liable person and the alleged victim both have their habitual residence in the same country at the time when the damage occurs (in which case the law of that country shall apply, Article 4 Section 2) or unless the tort is manifestly more closely connected with another country (Article 4 Section 3). This set of rules also applies in the specific case of an act of unfair competition affecting exclusively the interests of a specific competitor (Article 6 Section 2).

Specific rules apply to other unfair competition acts and acts restricting free competition. Under Article 6 of the Rome II Regulation, the law applicable to a non-contractual obligation arising out of an act of unfair competition is the law of the country where competitive relations or the interests of consumers are, or are likely to be, affected (Article 6 Section 1). The law applicable to a non-contractual obligation arising out of a restriction of competition is the law of the country in which the market is, or is likely to be, affected (Article 6 Section 3(a)). Where several markets may be affected, the law of the court of the defendant may also apply, under certain conditions (Article 6 Section 3(b)).

In a recent case, the CJEU clarified the rules on jurisdiction resulting from Article 7(2) of the Brussels I Regulation. The defendant contested the jurisdiction of the German court, relying on the jurisdiction clause in the contract giving jurisdiction to the Dutch courts. However, the CJEU held that an action based on the legal obligation to refrain from abusing a dominant position falls under the regime of tort, delict or quasi-délit. Thus, the rule of special jurisdiction relating to tort, delict or quasi-délit, provided for in the Brussels I bis Regulation, applies, despite the contract binding the parties, and the German court was the relevant jurisdiction (CJEU, 24 November 2020 case C-59/19).

The limitation period applicable to actions for compensation in connection with anti-competitive practices is five years (Article L 482-1 of the FCC), which is identical to ordinary civil law actions (Article 2224 of the French Civil Code).

The period begins to run from the day on which the victim knows or ought to have known (Article L 482-1 of the FCC) of the existence of an infringement, the fact that such infringement caused them harm; and the identity of at least one infringing party.

In the event the contemplated action concerns a continuous infringement, the limitation period does not run until the practice has ceased (Article L 482-1 of the FCC).

All the standard provisions of the French Civil Code relating to the postponement, suspension and interruption of the limitation period are applicable to these actions unless other special rules should be taken into account.

Furthermore, acts of competition authorities (the FCA, other NCAs or the EU Commission) aimed at investigating, detecting or punishing anti-competitive practices also interrupt the limitation period of private litigation until the issuance of a final decision from the relevant competition authority (Article L 462-7 of the FCC).

Limitation Litigation

Determining the starting point of the limitation period for actions for damages caused by anti-competitive practices gives rise to extensive litigation. When Article L 482-1 of the Commercial Code is not applicable ratione temporis to the case, it is the general law of Article 2224 of the French Civil Code that applies, and which makes the limitation period begin to run from the date on which the victim becomes aware of the damage they have suffered.

Recently, the method used by the courts to determine the starting point of prescription on the basis of Article 2224 of the French Civil Code has been close to that provided for by Article L 482-1 of the Commercial Code, even if it is not applicable ratione temporis.

So, in most cases, it is the decision of the competition authority that finds anti-competitive practices that is the starting point for the limitation period. For example, the Council of State ruled that launching a civil action within criminal proceedings cannot be taken as the starting point of the limitation period; it is the decision of the FCA which establishes the anti-competitive practices (Council of State, 22 November 2019, SNCF Mobilités; see also French Supreme Court, 27 January 2021, No S 18-16.279).

Otherwise, a reading of recent case law suggests that, in the presence of a decision on provisional measures, decisions on the merits are most often taken as the starting point for the limitation period. Decisions on provisional measures are less likely to be taken into account, although, in view of the in concreto approach to be adopted by judges, this possibility cannot be ruled out (for example: Paris Court of Appeal, 6 March 2019, SARL Arkeos v SA EDF, 17/21261).

The Paris Court of Appeal also held that the hearing of the victim by the services of the FCA or knowledge of a cartel gained through a press article is not sufficient to start the limitation period of the action (Paris Court of Appeal, 14 April 2021, No 19/19448).

As regards horizontal practices, hearings of alleged victims as witnesses during the investigation before the FCA are unlikely to be the starting point of the limitation period (for example: High First Instance Civil Court of Paris, 23 September 2019, Carrefour v Johnson & Johnson, No 2017013944).

Very recently, the French Supreme Court confirmed that the knowledge of pre-existing and distinct cartels, or the imprecise knowledge of the cartel in question by a manager of the victim company does not constitute the starting point of the limitation period (French Supreme Court, 27 January 2021, No S 18-16.279).

As regards abuse of dominant position, certain replies by alleged victims to requests for information from the investigation services may be taken as the starting point for the limitation period; again, this will depend on the information provided to the FCA’s investigation services in the context of those replies.

Courts apply the provisions of the FCPC (Article 145 and Articles 132–142) to disclosure requests, the production of documents filed for or in connection with private enforcement litigation (Article L 483-1 of the FCC).

For each request for disclosure, a judge must balance the legitimate interest of the claimant and the need to guarantee the protection of confidential information (Article L 483-1 paragraph 2 of the FCC). This means:

  • checking the usefulness of evidence;
  • protecting the confidentiality of documents, particularly with regard to business confidentiality; and
  • preserving the effectiveness of competition law (implementing Decree No 2017-305 of 9 March 2017).

Several categories of documents are distinguished (Articles L 483-2 to L 483-11 of the FCC), such as business secrets, privileged documents and certain categories of evidence submitted or held by the FCA.

Fines of up to EUR10,000 may be imposed in the case of a failure or refusal to comply with the court’s order of disclosure or if the evidence is destroyed (Article R 483-14 of the FCC).

Article 145 of the FCPC allows for in futurum disclosure measures. This provision authorises a party to seek an ex parte judicial order to force the opposing party to produce documents and information which are considered as useful for its lawsuit. The judge may order a set of measures such as a bailiff’s inspection, hearing of individuals or the disclosure of evidence by third parties.

Recently, in an interlocutory proceeding based on Article 145 of the FCPC, the Paris Court of Appeal ordered, inter alia, the production of the statement of objections which the EU Commission had addressed to Renault Trucks in connection with the truck cartel, and the list of documents supporting that statement. However, it refused to order the production of documents such as the list of gross prices and Renault Trucks' costs and margins as these requests were not proportionate to the damage they would cause to the defendant in its future negotiations with the applicant (Paris Court of Appeal, 25 October 2019, X Y v Renault Trucks, No 19/05356). Nevertheless, this decision was partially overturned by the French Supreme Court, which criticised the Paris Court of Appeal for not having examined whether the statement of objections was proportionate with regard to the confidential nature of the proof and the preservation of the effectiveness of competition law implemented in the public sphere (French Supreme Court, 8 July 2020, No 19-25.065).

Readers should also note a new "soft-law" instrument: the European Commission Communication on the protection of confidential information by national courts in proceedings for the private enforcement of EU competition law. The Commission recalls that states must have at their disposal an arsenal of measures to protect confidential information, without, however, hindering the parties' effective access to justice or the exercise of the right to full redress. The new Communication therefore sets out the measures that national courts may consider taking in relation to the production of confidential information in enforcement actions on the initiative of actors from the private sphere.

According to the Law of 31 December 1971, in all matters, whether in the field of counsel or defence, written advice addressed by a lawyer (subject to that lawyer being outside counsel) to, or intended for, their client; correspondence exchanged between the client and their lawyer; or between the lawyer and their colleagues, with the exception for the latter of those marked "official", are covered by professional secrecy.

A judge cannot order the disclosure of the “written statement or the transcription of oral statements” by leniency applicants and undertakings involved in a settlement procedure before a competition authority (Article L 483-5 of the FCC). The text extends this protection to “parts of a document drawn up in the course of the investigations and which would include a transcription or literal citation of these statements.”

Third-party statements may be requested by a judge or the parties and provided in writing or orally (Articles 199 et seq of the FCPC). Judges can ask questions after the witness has submitted their report (Article 213 of the FCPC).

Cross-examination is not usually performed in French courts, except in the International Chamber of the Paris Court of Appeal, where the parties may be allowed to rely on various common law procedural rules under the control of the judge.

Summons to appear in front of a judge are mandatory. Defaulting witnesses who, without legitimate reason, refuse to testify or to take the oath may be fined a maximum of EUR10,000 (Article 207 of the FCPC).

It is common practice for economic experts to be consulted to determine the existence and extent of possible damage suffered by the claimant or caused to the market. Very recently, in the context of a summary procedure for provision, the Administrative Court of Appeal of Nantes relied on the observations of the FCA to demonstrate the existence of a fault (a horizontal price cartel) and on the conclusions of the expert to increase the amount of a provision granted in first instance (Administrative Court of Appeal of Nantes, 22 January 2021, No19NT05057).

The parties can, of their own volition, submit expert reports. Furthermore, an expert report can be ordered by the court when the judge is not supplied with sufficient material to determine the matter (Articles 263 of the FCPC).

When a judge orders an expert report, they must determine the scope of the issue assigned to the expert and specify the period during which the expert will work on it (Article 265 of the FCPC).

Usually, only one person will be appointed as an expert, unless the judge deems it appropriate to appoint more than one (Article 264 of the FCPC).

If the expert opinion does not require written explanation, the judge may allow the expert to present it orally at the hearing; it will be recorded in the minutes. The drafting of the minutes may, however, be replaced by a reference in the judgment if the matter is judged in a court of final resort (Article 282 of the FCPC).

The judge may, at any time, on their own initiative or at the request of the parties, increase or restrict the scope of the investigative measures they have organised and amend the terms of the assignment given to the expert (Article 236 of the FCPC).

The expert must take into consideration the findings or claims of the parties, and, where they are written, will attach them to their opinion if the parties so request. The expert must state in their opinion the decision they have taken in regard to these findings or claims (Article 276 of the FCPC).

Article L 481-3 of the FCC provides a non-exhaustive list of the types of damage for which victims of competition infringements may seek compensation as follows:

  • the loss resulting from an overcharge or from excessively low prices;
  • the loss resulting from the decrease in sales volume;
  • loss of opportunity; and
  • non-pecuniary harm.

In a recent standalone action concerning an abuse of dominant position, the Paris Court of Appeal accepted the necessity of compensation for the loss of opportunity (Paris Court of Appeal, 8 February 2019, No 16/06164).

Again, very recently, a judge recognised that the victim of a cartel who brought a private enforcement claim suffered moral damage as a result of "negotiating for years with suppliers who pretend to negotiate" (Paris Court of Appeal, 23 June 2021, No 17/0410).

In order to determine the damage, the courts have various procedural and non-procedural tools at their disposal:

  • an expert opinion in the event that the victim encounters difficulties in assessing the economic loss suffered;
  • the opinion of the competition authority (R.481-1 of the FCC);
  • the collection of methodological sheets on the evaluation of damages of the Paris Court of Appeal, updated in 2021 (see 1.1 Recent Developments in Antitrust Litigation for further detail).

Damages awarded by French courts are compensatory in nature: they correspond to the full damage suffered by the victim but are limited to this amount (eg, the amount necessary to place the victim in the position in which it would have been in the absence of the infringement). French law does not provide for any additional damages, such as punitive damages.

In that regard, compensation for damages is paid as a nominal amount, increased by the payment of either the statutory (legal) interest rate, or a compensatory one (eg, the weighted average cost of capital (WACC)).

Recently, the Paris Court of Appeal was able to deal with the issue of cash flow losses and to detail the conditions under which a victim can request that their loss be evaluated using a weighted average cost of capital (WACC) interest rate. The Paris Court of Appeal rejected the application of the WACC method on the grounds that the victim company "failed to demonstrate that the non-availability of the sums it was deprived of had led it either to restrict its activity without being able to find alternative financing through loans or equity, or to abandon duly identified investment projects that were likely to yield the equivalent of the average cost of capital" (Paris Court of Appeal, 17 June 2020, No 17/23041).

It is also possible that the cartel caused "umbrella effects". This raises the question of whether "indirect" buyers, who are victims of the price increase by extension, are entitled to claim compensation. The Council of State has admitted compensation for damage caused by an umbrella effect. In that case, the decision of the EU Commission had established that the practices of the cartelists had a general effect on market prices, including those of companies, such as the plaintiff's main supplier during the period, which were not members of the cartel (Council of State, 12 October 2020, SNCF Mobilités, No 432981).

According to Article L 481-4 of the FCC, recently introduced into French law by Ordinance No 2017-303, the direct or indirect buyer is deemed not to have passed on the overcharge to its direct clients. In other words, the new regime applicable to private enforcement litigation provides for rebuttable presumptions regarding passing on, with the burden of rebutting the presumption resting on defendants.

It should be noted that this presumption counts amongst the substantive provisions of the Ordinance, which are not applicable retroactively.

For all claims falling outside the scope of the Ordinance, one should refer to previous case law on this specific question.

In this regard, the French Supreme Court ruled in 2010 that no compensation is due if the claimant has passed on its loss to its clients and that the burden of proof of the absence of passing on lies on the claimant (French Supreme Court, 15 June 2010, No 09-15.816).

In other words, the claimant requesting the reparation of harm must prove that it actually suffered such harm, and thus must provide evidence that it did not pass on the overcharge allegedly causing such harm.

Indeed, under French law, and as discussed in 7.1 Assessment of Damages, damages awarded are compensatory in nature, which means that they must correspond to the full damage suffered by the victim but only the damage actually suffered. Under this general principle, claimants can only recover the amounts actually lost and not the amounts passed on.

Finally, very recently, the Council of State was able to rule that the burden of proof relating to the passing on the extra costs to customers was not exclusively on the claimant, the solution thus adopted seems to comply with Directive 2014/104/TFUE and Ordinance No 2017-303 du 9 mars 2017 (Council of State, 12 October 2020, SNCF Mobilités No 432981).

According to Article L 481-8 of the FCC, damages awarded shall be assessed on the day of the decision, taking into account the passage of time. This is consistent with the general principle applicable under French law according to which damages are assessed at the time of the judgment.

Claimants are automatically entitled to statutory interests, but only as from the ruling (Article 1231-7 of the French Civil Code). The applicable interest rates are published on the website of the Banque de France.

A French court has discretion to award interest from an earlier date in order to fully compensate for the damage suffered. Such interest is known as "compensating interest" related to the unavailability of capital during the period of the infringement (ie, the amount of damages). Unlike statutory interest, which is granted by law, compensating interest is granted subject to the claimant evidencing a specific loss due to the unavailability of capital. Compensating interest may be based either on the rate of statutory interest, possibly increased by a co-efficient decided by the courts, or on the WACC.

Additionally, although interest granted does not automatically produce compound interest, the claimant can make such a request.

Recently, the Paris Court of Appeal awarded more than EUR180 million to an electronic communications operator (Digiciel Antilles) as compensation for damages caused by the anti-competitive practices of Orange Caraïbes.

In particular, it agreed to compensate for the damage resulting from the loss suffered as a result of the additional costs incurred by the company as a result of the disputed practices (for distribution exclusivities and under the exclusive rights of repair). As compensation for its financial loss, the Paris Court of Appeal rejected the application of the WACC method, insofar as Digiciel had not succeeded in showing that the unavailability of the sums of which it was deprived had led it either (i) to restrict its activity because of an inability to find alternative financing, or (ii) to abandon duly identified investment projects which were likely to yield the equivalent of the average cost of capital.

However, it noted that the financial loss can be assessed until 31 December 2005 on the basis of the average interest rate paid at the time by the victim of the practices, and then on the basis of the legal interest rate (Paris Court of Appeal, 17 June 2020, Orange Caraïbes v Digicel Antilles Françaises Guyane, No 17/23041).

Ordinance No 2017-303 created, by law, a principle of joint and several liability between undertakings found to have breached competition law.

For all claims falling outside the scope of the Ordinance, the general standards of French tort law, and in particular of Article 1240 of the French Civil Code are applicable. On these grounds, French courts are likely to find that the co-authors of a breach of competition law are liable in solidum towards victims of anti-competitive practices. French law distinguishes joint and several liability (responsabilité solidaire), which can only be based on legal or conventional provisions (Article 1310 of the French Civil Code), from in solidum liability which may only be ordered by courts in the absence of a legal textual basis.

Under the new regime of joint and several liability introduced by Ordinance No 2017-303, leniency applicants benefiting from a total exemption from fines are only required to compensate the harm caused to their direct or indirect contracting parties. They may still be liable to other victims if such victims are unable to obtain full compensation from the other infringers (Article L 481-11 of the French Commercial Code).

Under French law, contribution proceedings against a third party may be brought by means of a writ of summons, an intervention forcée, (Article 331 of the FCPC).

The right to initiate requests for bringing contribution proceedings is not reserved to the parties; the judge may invite them to question all the interested parties whose presence seems necessary to resolve the dispute (Article 332 of the FCPC).

Depending on the case, a judge may order a wide range of interim or final measures, such as resuming business relations or granting access to essential facilities. Injunctions are often backed up by a daily penalty (astreinte). Such measures are available when the case is decided on the merits or through summary proceedings (référé).

In all cases of urgency, the president of the court may order, in a summary procedure, all measures that do not encounter any serious challenge or which the existence of the dispute justifies (Articles 808 and 872 of the FCPC).

In certain circumstances, the president may, even where confronted with a serious challenge, order in a summary procedure such protective measures as are required to restore the parties to their previous state. This is done either to avoid imminent damages or to abate a manifestly illegal nuisance. In cases where the existence of the obligation is not seriously challenged, the president may award an interim payment to the creditor or order the mandatory performance of the obligation even where it is an obligation to do a specific thing (Articles 809 and 873 of the FCPC).

These are "regular" summary proceedings, enabling a preliminary decision to be issued within a few weeks or months. However, the judge will not rule on the merits of the case but will only order interim measures.

In cases of extreme emergency an expedited proceeding can be requested, whereby the judge sets a binding hearing date within a few days of receipt of the claimant’s request (Article 485 of the FCPC). In this situation, a preliminary decision may be issued within a few days.

In all cases, both parties are heard at a final hearing, during which they must develop their arguments.

The summary procedure orders are provisionally enforceable. The judge may, however, make that provisional enforcement subject to the granting of a guarantee in the form of real or personal property, sufficient to cover all restitutions and damages (Articles 489 and 517 to 522 of the FCPC).

The parties may, on their own initiative or upon a judge's request, use methods of alternative dispute resolution, such as conciliation (Article 128 of the FCPC) or mediation (Article 131-1 of the FCPC). This is a voluntary process, which cannot be imposed by a judge. Also, the initiation of a mediation or conciliation procedure will suspend the limitation period (Article 2238 of the FCC).

Ordinance No 2017-303 anticipated the recourse to alternative modes of resolution and their effect on compensation from joint and several co-debtors.

Victims who have settled a dispute with one co-debtor may only claim compensation from the other co-debtors not party to that settlement, and such compensation should not include the amount attributable to the co-debtor party to the settlement (Article L 481-13 of the FCC).

In addition, while ruling on contribution claims between co-debtors, courts must take into account the amounts already paid to victims following previous settlements (Article L 483-14 of the FCC).

In France, although third-party funding is not prohibited, it is not governed by any specific regulation. Ruling on a funding contract in the context of an international arbitration case, the Court of Appeal of Versailles indicated that "a contract for the funding of trials is 'sui generis' and unknown in most Member States of the Union save countries with a Germanic legal culture" (CA Versailles, 1 June 2006, No 05/01038). On 21 February 2017, the Paris Bar Council issued a resolution on the practice of third-party funding in international arbitration, setting out basic principles applicable to such cases.

Costs pertaining to proceedings, processes and enforcement procedures include, inter alia: fees, taxes, government royalties, cost of translation, allowances for witnesses and expert fees. These legal costs are usually borne by the losing party, unless the judge, by a reasoned decision, imposes the whole or part of them on another party (Articles 695 and 696 of the FCPC).

Attorneys' fees are not included in the legal costs. A judge may, however, order the losing party to pay additional sums which are not part of the legal costs, taking into consideration the rules of equity and the financial condition of this party (Article 700 of the FCPC).

Orders to deposit funds as security to cover costs are rarely granted. They usually only concern experts' fees.

According to Article R 420-3 of the FCC, the Paris Court of Appeal has exclusive jurisdiction to rule on appeals against decisions rendered on private enforcement competition cases.

In September 2016, Chamber 5-4 of the Paris Court of Appeal specialised in hearing appeals against first instance judgments on private enforcement antitrust cases. In addition, in 2018, an international chamber was created within the Court of Appeal allowing the parties to plead in English.

The decisions of the Paris Court of Appeal are themselves subject to appeal to the Supreme Court (Cour de Cassation), which is not a third level of jurisdiction as it does not rule on the merits of a case, but instead is only required to decide whether the rules of law have been correctly applied.

Gide Loyrette Nouel

15 rue de Laborde
75008 Paris
France

+33 1 40 75 60 00

info@gide.com www.gide.com
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Signature Litigation was founded in London in 2012 as a firm dedicated to dispute resolution and has been present in Paris since January 2019. Its lawyers in Paris (four partners, three senior associates and nine associates) all practised at major international law firms before joining Signature Litigation and are recognised for their expertise. The team mainly represents clients in commercial, antitrust, banking, corporate and post-M&A disputes, complex and international litigation, arbitration, product liability and insurance/reinsurance. The firm advises companies on the scope of their compliance and vigilance duties. Thomas Rouhette and Claire Massiera have developed the firm’s antitrust litigation practice in Paris and are currently representing a French corporation in a follow-on case pending before the French Administrative Courts.

The obvious “underdevelopment” of private enforcement in Europe 15 years ago (2004 Ashurst report) has given way to the emergence of substantive antitrust litigation. In a comprehensive pre-Brexit analysis covering the then 28 member states, 239 cartel damages actions (including 43 cases from France) were recorded in 2019, against 52 cases for which a first decision was rendered in 2018 and 24 in 2017 (Jean-François Laborde, Cartel damages actions in Europe: How Courts have assessed cartel overcharges (2019 ed.), Concurrences No 4-2019). There is no indication that this trend will be reversed, especially considering the pro-plaintiff developments resulting from recent case law supporting the emergence of follow-on litigation, ie, litigation initiated during or after public enforcement.

2020, besides its peculiar context, has been a record-breaking year in terms of public enforcement in France with a record fine of EUR1.1 billion (subject to pending appeal) and an extraordinary year in terms of total amount of fines (EUR1.7857 billion) (vide the French Competition Authority’s 2020 Annual Report, published on 8 July 2021). Private enforcement has also led to significant awards, with the highest one (around EUR250 million) given against Orange in a decision rendered by the Paris Court of Appeal on 17 June 2020 (Case reference: No 17/23041). Hence, antitrust litigation is most certainly adding to the deterrent effect of public enforcement in such a way that competition law is increasingly seen as a strategic challenge for companies and must be fully integrated in a sound compliance policy to prevent and manage competitive risks.

Directive 2014/104/EU (the so-called Antitrust Damages Directive), the European Court of Justice’s case law and EU guidelines and practical guides have allowed the emergence and implementation of rules that undeniably encourage antitrust litigation resulting either in a court decision or a settlement. The Directive was implemented in the French legal framework through Order No 2017-303 and Decree No 2017-305 which passed on 9 March 2017 and entered into force on 11 March 2017 (although the provisions regarding the communication and production of documents applied to legal actions initiated as of 26 December 2014). These rules are not applicable to many pending cases brought before 11 March 2017. Therefore, as per the European Commission's position, expressed in its 14 December 2020 Staff Working Document on the implementation of the Antitrust Damages Directive: “sufficient evidence to carry out a meaningful evaluation of the Damages Directive is not yet available”.

Yet, trends and developments can be identified.

Guidance from the Paris Court of Appeal

The Commission has published several documents providing guidance to national judges, experts, parties and anyone interested in interpreting EU competition law. The Communication and Practical Guide on quantifying antitrust harm in damages actions, the 2019 Guidelines on the passing-on of overcharges, and the 22 July 2020 Communication on the protection of confidential information form a set of soft law greatly useful when applying the rules deriving notably from the Damages Directive.

The Paris Court of Appeal has embarked on a similar process, although not specific to competition law, by proposing practical guides which are considered as soft law. There were 12 in 2017. The 2021 edition has 27. These guides were drafted by a working group composed of judges, in-house counsel, economists, accountants and lawyers and is chaired by Professor Chagny. It was created under the instruction of the first presiding judge of the Paris Court of Appeal.

These guides are divided into three categories: (i) general principles, (ii) specific examples and (iii) expert proceedings and include the following sheets:

  • How to compensate for economic loss resulting from a loss of opportunity (Sheet No 4);
  • How to compensate for loss linked to the passage of time (Sheet No 7); and
  • How to manage confidentiality and respect business secrecy (Sheet No 9).

Two guides specifically target antitrust litigation:

  • How to bring action for damages caused by an anti-competitive practice (Sheet No 10a.); and
  • How to compensate for damages caused by an anti-competitive practice? (Sheet No 10b.).

While these guides serve an educational purpose, they will most likely be a reference in upcoming litigation and should be a go-to source of information for any plaintiff or defendant in antitrust litigation.

Building a Strong Case: Access to Documents

The most obvious trend in the field of antitrust litigation is to ensure the attractiveness of private enforcement for potential victims of anti-competitive practices. Hence, current and future litigation will most likely look at the balance between this goal and the core foundations of civil liability: the need to provide evidence of a loss and of a causal link.

Information asymmetry has been targeted as one of the main barriers preventing victims of anti-competitive practices from bringing standalone or follow-on claims. This was underlined in the Commission's 2005 Green Paper (COM (2005) 672 final, 19 December 2005) and in its 2008 White Paper (COM (2008) 165 final, 2 April 2008). It was also addressed by the Commission in the Antitrust Damages Directive, which provides for an EU-type disclosure. While the Commission called for a "minimum level of disclosure inter partes", it emphasised the need "to avoid the negative effects of overly broad and burdensome disclosure obligations, including the risk of abuses" (2008 White Paper).

Rather than fundamental changes, the French legal framework needed a few adjustments to comply with the Directives' provisions in this respect, leading to the incorporation into Article L. 483-1 of the French Commercial Code of a two-step assessment. First the existence of "plausible harm caused by an anti-competitive practice", then the application of the proportionality filter, comprising two tests (Conference, Implementation of the EU Damages Directive into member state law, Laurence Idot "Disclosure of documents that lie in the control of the parties", Section 16, Concurrence No 3-2017):

  • "the effective implementation of the right to compensation" versus "the effectiveness of the application of competition law by the competent authorities";
  • "(...) usefulness of the evidence of which the communication or production is requested" versus "the protection of the confidential nature of such evidence".

The Paris Court of Appeal had embarked on such an assessment in a decision handed down on 25 October 2019, on the grounds of Article 145 of the French Code of Civil Procedure but also of new Articles L. 483-1 and R. 483-1 of the French Commercial Code.

The Court of Appeal notably granted the plaintiffs the communication of the statement of objections of the European Commission, the list of exhibits supporting the Commission's statement of objections and the confidential versions of several exhibits referred to in the European Commission's decision.

However, this decision was partially overturned by the French Supreme Court in a decision rendered on 8 July 2020 (Case reference: No 19-25065). The French Supreme Court considered that: "By ruling as it did, by merely referring to the usefulness of the exhibits and their confidential nature regarding only Renault Trucks, without seeking, as per its duty, whether their communication was adequate regarding, on the one hand, the protection of the confidential nature of the elements of proof retained concerning the third parties to the proceedings considered by Eiffage Infrastructures, and on the other hand, the preservation of the effectiveness of competition law implemented in the public sphere, the Court of Appeal deprived its decision of a legal basis".

The French Supreme Court therefore referred the case back to the Court of Appeal which will have to apply the proportionality test in its forthcoming judgment.

While the Directive has clearly alleviated the burden of proof in follow-on cases, through an irrebuttable presumption of fault, plaintiffs should not overlook the necessity of building a strong case and elaborating a sound strategy to obtain evidence, either prior to a trial and by way of petition or summary proceedings (the so-called measures in futurum of Article 145 of the French Code of Civil Procedure) or during a trial (Article 143 of the French Code of Civil Procedure). Such a request will have to be carefully drafted as the French Supreme Court has made clear that the proportionality test will have to be addressed thoroughly.

Assessing Damages: Expert Proceedings

Expert proceedings are an important part of antitrust litigation. So much so that several guides issued by the Paris Court of Appeal (see above) specifically relate to expert proceedings.

  • Sheet No 20: What place for expert operations in an amicable process?
  • Sheet No 21: What are the ethical rules applicable to the judicial expert?
  • Sheet No 22: Which private expert operations in the evaluation of economic damages?
  • Sheet No 23: Which judicial expert operations in the evaluation of economic damages?

Antitrust litigation is highly technical. While the Commission has provided a general Communication on quantifying harm, applying the available methods to quantify the overcharges, such as comparison over time and econometrics, requires substantial expertise.

As expressed by the Commission, "A major difficulty encountered by Courts, tribunals and parties in damages actions is how to quantify the harm suffered. Quantification is based on comparing the actual position of claimants with the position they would find themselves in had the infringement not occurred. In any hypothetical assessment of how market conditions and the interactions of market participants would have evolved without the infringement, complex and specific economic and competition law issues often arise. Courts and parties are increasingly confronted with these matters and with considering the methods and techniques available to address them" (Communication from the Commission on quantifying harm in actions for damages based on breaches of Article 101 or 102 of the Treaty on the Functioning of the European Union (2013/C 167/07)).

Therefore, parties to an antitrust litigation will most likely appoint private experts who will draft several reports and courts will tend to appoint judicial experts who will assess the robustness of said reports and quantify the overcharges.

Integrating the need for expert proceedings (either private – ie,appointed by the party and/or judicial – ie, appointed by the Court) is an essential part of a plaintiff's or a defendant’s strategy in managing a case. Any request for a court-appointed expert will have to be carefully drafted. If French courts rely significantly on judicial experts to assess damages, they are reluctant to order expert proceedings if the causal link between the fault and the alleged loss is not established beforehand.

In a decision handed down on 6 March 2019 (Case reference: Paris Court of Appeal, Section 6, Chamber 4, 6 March 2019, No 17/21261), the Paris Court of Appeal ruled that "As regards EDF's predatory abuse practices, which were sanctioned by the Authority for the period from 2007 to April 2009, it cannot be ruled out that they may have had medium-term structuring effects on the complainant operators, even after they ceased and that, consequently, they may seek compensation for them, because of the benefits they would have been deprived of after the practices ceased, owing to the still appreciable effects of the infringement which was terminated. But it is up to the victims to establish a causal link. This causal link between the anti-competitive practices and the alleged damage suffered by competitors after the cessation of the practices is a more complex level of evidence to establish than the damage contemporaneous with the practices". Considering the absence of any prima facie evidence of a causal link, the Paris Court of Appeal rejected the appellants’ request as well as their request for judicial expert operations.

As noted by Professor Amaro, "once the fault has been established, the plaintiff will have to convince the Judge of the existence of his/her loss and of the causal link with the fault. If he/she fails to do, he/she will be disqualified. If he/she succeeds, however, regardless of whether he/she fails to establish the exact amount of his/her loss, he/she may rely on the appointment of a Court-appointed Expert" (Rafael Amaro, Le Contentieux de la réparation des pratiques anticoncurrentelles (Sept 2018 – June 2019), Concurrences No 3-2019, pp. 230-246).

Other Trending Topics in Recent Case Law

The statute of limitations or the detrimental effect of time have been recurring important issues discussed before courts.

Statute of limitations

The statute of limitations for private litigation in antitrust cases is governed by ordinary law, ie, Article 2224 of the French Civil Code, which provides that personal or movable actions are time-barred after five years from the day when the holder of a right knew or should have known the facts enabling them to exercise it.

In a ruling dated 27 January 2021 (Case reference: No 18-16.279), the French Supreme Court confirmed that the starting point of the five-year limitation period is the Competition Authority’s decision. Although the director of the plaintiff had, prior to creating his own company, exercised functions within two companies "pivotal to the cartel", the Supreme Court considered that "knowledge of pre-existing and separate agreements [sanctioned by the Competition Council on February 4, 2003] or imprecise knowledge of the cartel in question did not allow Mr. U. and EMC2 to determine whether any damage had been caused to them, and by which operators".

In a ruling dated 17 June 2020 in the Digicel/Orange case (Case reference: No 17.23041), the Paris Court of Appeal considered that the starting point of the limitation period was the date when the Competition Authority’s decision was published, although Digicel had denounced Orange’s practices to the Competition Authority as soon as 2004.

These decisions are in line with the majority trend: courts will assess on a case-by-case basis whether or not knowledge of the facts enabling a right-holder to initiate proceedings can be dated prior to the publication of the Competition Authority’s decision. However, we should expect such cases to be quite rare as courts tend to consider that such a decision is necessary to obtain full knowledge of the extent of the fault at stake.

Detrimental effect of time

The above-mentioned decision rendered by the Paris Court of Appeal on 17 June 2020 in the Digicel/Orange case (Case reference: No 17.23041) is also interesting regarding the appreciation of the detrimental effect of time. It ought to be noted that one of the guides published by the Paris Court of Appeal specifically addresses this issue (Sheet No 7).

This decision confirms the following.

Full compensation for the damage suffered must include compensation for the detrimental effects of time through two clearly distinct losses: monetary erosion and the loss of opportunity suffered by the injured party as a result of the unavailability of capital.

The loss of opportunity must be carefully evidenced. In the Digicel / Orange case, the Court awarded damages for this loss but did not follow Digicel's arguments regarding calculation. According to the Court of Appeal, Digicel did not provide evidence that such unavailability had impacted its activity or forced it to abandon investment projects that could have brought in the equivalent of the Weighted Average Cost of Capital (WACC) rate. However, the Court did grant damages for such unavailability of capital referring to the rate of borrowing borne by Digicel, noting that if it had had the sums in question, it would not have had to take out a loan but would have self-financed its development from its own funds. For the subsequent period, the Court of Appeal retained the legal interest rate.

All the above-mentioned trends aim at ensuring application of the principle of effectiveness established by European case law. They, allegedly, enhance the attractiveness of the French legal system.

Collective Redress

While this article aims at focusing on trends and developments in French antitrust litigation, it is worth underlining the ineffectiveness of collective redress in France (action de groupe) in this field. On 11 June 2013, the Commission issued a recommendation (2013/396/UE) and a communication (COM (2013) 401 final) on collective redress, putting “forward a set of principles relating both to judicial and out-of-court collective redress that should be common across the Union” (Commission Recommendation of 11 June 2013 on common principles for injunctive and compensatory collective redress mechanisms in the member states concerning violations of rights granted under Union Law (2013/396/EU), recital 11).

Such a group action was introduced in France by the Loi Hamon of 17 March 2014 (Law No 2014-344 of 17 March 2014). We will not detail the specifics of this opt-in action open only to approved consumer associations but wish to underline its ineffectiveness. As stated by French MPs in a June 2020 report published by the Law Commission of the French National Assembly regarding the assessment and prospects of the group action, since 2014, besides three actions introduced before the French administrative courts, 21 group actions were brought to civil courts, of which 14 were in the field of consumer law, three in the field of health, two in the field of discrimination and two in the field of personal data protection. In other words, none in the field of antitrust litigation.

Alternative procedures (notably joint collective action), which do not fall under the monopoly of approved associations and are not particularly complex, have largely contributed to the failure of the group action. Furthermore, the adequacy of the group action in antitrust litigation is questionable. As highlighted above, antitrust litigation is quite technical. While proof of a fault is not necessary (in follow-on cases, which are the type of cases open to group actions), it is still required to provide an assessment of the loss and evidence the existence of a causal link between the said loss and the fault, two tasks that prove to be quite challenging. This often requires the help of private experts, implying costs. Lastly, as a final decision from a competition authority is required prior to initiating such a group action, the time between the fault and the initiation of the action would be long. Consumers are not likely to wait five or even ten years before requesting compensation for a loss that, at an individual level, is usually quite low. Hence, the ineffectiveness of the group action in antitrust cases is likely to last.

Signature Litigation AARPI

49 Avenue George V
75008 Paris
France

+33 1 70 75 58 00

thomas.rouhette@signaturelitigation.com; www.signaturelitigation.com
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Gide Loyrette Nouel was founded in Paris in 1920 and is a leading international law firm with 12 offices worldwide. With 550 lawyers, including over 100 partners, the firm offers legal advice and assistance across many disciplines to public and private sector institutions. Gide boasts a wealth of experience in antitrust procedures (cartels and abuse of dominant position) before the French Competition Authority, the EU Commission and other national competition authorities. The firm also has extensive expertise in private enforcement cases before commercial and civil courts, both in standalone and follow-on actions, and has gained extensive expertise in managing selective distribution networks for brand owners (analysing their agreements in the light of antitrust rules), as well as in the fight against grey-market players. Gide is also active in merger control before the EU Commission and the French Competition Authority, as well as before national competition authorities outside the EU.

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Authors



Signature Litigation was founded in London in 2012 as a firm dedicated to dispute resolution and has been present in Paris since January 2019. Its lawyers in Paris (four partners, three senior associates and nine associates) all practised at major international law firms before joining Signature Litigation and are recognised for their expertise. The team mainly represents clients in commercial, antitrust, banking, corporate and post-M&A disputes, complex and international litigation, arbitration, product liability and insurance/reinsurance. The firm advises companies on the scope of their compliance and vigilance duties. Thomas Rouhette and Claire Massiera have developed the firm’s antitrust litigation practice in Paris and are currently representing a French corporation in a follow-on case pending before the French Administrative Courts.

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