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.
Regarding the limitation period, the French courts ruled that the decision of the competition authority that finds anti-competitive practices 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). Conversely, the hearing of the victim by the services of the French Competition Authority (FCA), the knowledge of a cartel gained through a press article or the imprecise knowledge of a cartel held by a manager of the victim company are not sufficient to start the limitation period (Paris Court of Appeal, 14 April 2021, No 19/19448; French Supreme Court, 27 January 2021, No S 18-16.279; Paris Court of Appeal, 5 January 2022, No 19/22293).
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).
Procedure and Stay of Proceedings
The Paris Commercial Court ruled in both cases that the judgment of the General Court of the EU (GCEU) confirming the European Commission's decision did not constitute a “definitive decision” under European law in consideration of the pending appeal before the ECJ (Paris Commercial Court, 4 July 2022, No 2017015670; Paris Commercial Court, 18 July 2022, No 2020004977).
However, in the Twenga case, the Paris Commercial Court refused to stay the proceedings considering such a stay would be “prejudicial to the claimant by being contrary to one of the fundamental principles of law set forth in Article 6 of the European Convention on Human Rights, and in particular the right to be judged within a reasonable time, even though more than 15 years have passed since the facts in dispute”. The Paris Commercial Court then ordered the parties to submit their briefs on the merits.
Regarding damages, the Paris Court of Appeal has accepted compensation of the loss of opportunity (Paris Court of Appeal, 8 February 2019, No 16/06164) and also increasingly accepts compensation for moral damages suffered as a result of “negotiating for years with suppliers who pretend to negotiate” (Paris Court of Appeal, 23 June 2021, No 17/0410) or, for example, where the eviction of a daily newspaper had “damaged the confidence and the dynamics created around the launch of this new daily newspaper” (Paris Court of Appeal, 23 February 2022, No 19/19239).
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 proceedings. The Paris Court of Appeal 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 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. Additionally, guidance on damage classification is currently being discussed in working groups involving practitioners, professors and experts, further to the nomenclature “of damages caused by anti-competitive practices” proposed in January 2022 by Professor Rafael Amaro, which distinguishes and specifies five categories of damage:
This nomenclature is not intended to be binding but could be a useful tool to guide interested parties and the courts in the assessment of damages.
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:
Article L420-6 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 of competition law may incur a maximum prison term of four years and a fine of EUR75,000.
Article L463-5 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 nature of the facts appears to justify the application of Article L420-6 of the FCC. However, the prosecutors decide at their discretion 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 L420-6 of the Commercial Code. The attribution to a specialised national prosecutor's office of concurrent jurisdiction in this area could lead to the strengthening of criminal law enforcement with 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 recently, the Paris Court of Appeal ruled against the provisions of the Ordinance being applicable to private enforcement claims brought on grounds of infringements pre-dating the Ordinance (Paris Court of Appeal, 23 June 2021, RG No 17/0410; Paris Court of Appeal 24 November 2021, No 20/04265, Paris Court of Appeal, 5 January 2022, No 19/22293).
The Ordinance is deemed to provide “special rules”. Therefore, standard civil law 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 European Commission (Article L481-2 of the FCC). Claimants also benefit from a rebuttable presumption that cartels cause harm (Article L481-7 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 judicial courts pursuant to Article L420-7 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 writ of summons will be sanctioned by a rejection.
Among the judicial courts, eight Commercial Courts and eight High Civil Courts of First Instance have jurisdiction to deal with competition law litigation.
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 to hear 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 L481-2 paragraph 1 of the FCC).
The Ministry of Justice provided guidance in a circulaire (soft legal instrument), dated 23 March 2017, to assist the courts and the parties in private enforcement litigation. The circulaire indicates that Article L481-2 of the FCC is applicable to infringement decisions (including settlement decisions and injunction decisions) before the FCA and/or the European 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 L481-2 paragraph 2 of the FCC).
Article L481-2 paragraph 3 states that national courts may not decide cases in a way that runs counter to a decision adopted by the European Commission.
Before the FCA, the European 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 European 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 2006-08, the European 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 L481-2 of the FCC). Claimants also benefit from a rebuttable presumption that cartels cause harm (Article L481-7 of the FCC).
In the same way, again regarding the infringements that occurred after the entry into force of the Ordinance, Article L481-4 of the FCC provides that the direct or indirect purchaser of the products or services concerned by the anti-competitive practices is deemed not to have passed on the additional cost to its direct contractors, unless the defendant proves otherwise. Hence, for infringements occurring after 11 March 2017, the burden of proof for the pass-on defence rests on the defendant. In this regard, the Paris Court of Appeal ruled that the Ordinance was not applicable to a case where the events giving rise to the liability occurred prior to 11 March 2017 and therefore the claimants were required to prove that they had not passed the loss of profit due to the reduced margins resulting from the sanctioned cartel on to consumers (Paris Court of Appeal, 5 January 2022, No 19/22293).
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 L481-7 of the FCC, according to which it is presumed until proved otherwise that a cartel between competitors causes harm, is not applicable to a cartel that took place between September 1993 to 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, is deemed to have provided proof that it incurred overcharges where it can prove that:
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 direct 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 stay 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 effect 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.
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 L623-24 and L623-25 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 damages suffered need not be identical. Consumers must have expressed their unequivocal willingness to participate in the collective action (ie, an 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.
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 compensation of the “collective interest” of a given profession or business sector, which is distinct from the cumulative individual interests of their members.
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 European 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 L2132-3 of the French Labour Code and Article L490-10 of the FCC.
Article L623-1 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:
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 L623-22 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.
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 of the Brussels I Recast Regulation). It may only be sued in the courts of another member state under certain conditions.
In matters relating to tort (delict or quasi-delict), the general rule is that the courts of the place where the harmful event occurred have jurisdiction (Article 7 Section 2 of the Brussels I Recast Regulation). This covers both the place where the event giving rise to the damage occurred, and the place where the damage was suffered.
Regarding, the concept of “harmful event”, the French courts have applied the principle of the FlyLal and Tibor-Trans judgments (ECJ, 5 July 2018, FlyLal, C-27/17; ECJ, Tibor-Trans, 29 July 2019, C-451/18: 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). Indeed, in a 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 Paris Commercial Court considered that it had jurisdiction since:
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-delict), 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).
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 of the 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 of the Rome II Regulation), or unless the tort is manifestly more closely connected with another country (Article 4 Section 3 of the Rome II Regulation). This set of rules also applies in the specific case of an act of unfair competition exclusively affecting the interests of a specific competitor (Article 6 Section 2 of the Rome II Regulation).
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 of the Rome II Regulation). 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) of the Rome II Regulation). 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) of the Rome II Regulation).
The limitation period applicable to actions for compensation in connection with anti-competitive practices is five years (Article L482-1 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 L482-1 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 L482-1 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 European 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 L462-7 of the FCC).
Determining the starting point of the limitation period for actions for damages caused by anti-competitive practices gives rise to extensive litigation. When Article L482-1 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 limitation periods on the basis of Article 2224 of the French Civil Code has been close to that provided for by Article L482-1 of the Commercial Code, even if it is not applicable ratione temporis.
So, in most cases, the decision of the competition authority that finds anti-competitive practices is the starting point of 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 instead 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 (eg, 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). The Paris Court of Appeal also ruled, on the basis of Article 2224 of the French Civil Code, that although the companies in the case may have suspected that they had been victims of an anti-competitive cartel through press articles and, more specifically, during their hearing by the Competition Authority, the materiality of the facts and the identification of the companies that had taken part in the cartel were not specified at the time, so the injured companies were not in a position to take legal action (Paris Court of Appeal, 5 January 2022, No 19/22293).
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 (eg, High First Instance Civil Court of Paris, 23 September 2019, Carrefour v Johnson & Johnson, No 2017013944).
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 (Articles 132–142 and Article 145) to disclosure requests, the production of documents filed for or in connection with private enforcement litigation (Article L483-1 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 L483-1 paragraph 2 of the FCC). This means:
Several categories of documents are distinguished (Articles L483-2 to L483-11 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 R483-14 of the FCC).
Article 145 of the FCPC allows for in futurum disclosure measures. This provision allows a party to seek an ex parte judicial order to force the opposing party to produce documents and information which are considered useful for its lawsuit. The judge may order a set of measures such as a bailiff’s inspection, the 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 European Commission had addressed to Renault Trucks in connection with the trucks 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). The Court of Appeal, to which the case was subsequently referred, ultimately rejected the disclosure of the requested documents (Paris Court of Appeal, 18 May 2022, No 20/13878).
More recently, still in the “trucks cartel case” and in proceedings based on Article 145 of the FCPC, the Paris Court of Appeal refused to order the disclosure of extracts from the confidential version of the European Commission's cartel decision, as the claimants did not justify the usefulness of obtaining these documents for their assessment of their alleged damage. The Court also refused to order the disclosure of the index of the Commission's file because such disclosure would undermine the leniency procedure. However, the Court ordered the disclosure of the average sales prices of heavy trucks applied by the manufacturer in question in France and in each of the countries of the European Union, as these average prices would facilitate the assessment of the damage that the companies believe they have suffered as a result of the anti-competitive practices (Paris Court of Appeal, 20 April 2022, No 21/06313).
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 an outside counsel) to, or intended for, their client; correspondence exchanged between the client and their lawyer; or between the lawyer and its colleagues (unless expressly identified as “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 L483-5 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 its statement (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 damages suffered by the claimant or caused to the market. Very recently, in the context of an interim payment procedure, 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 an interim payment granted in first instance (Administrative Court of Appeal of Nantes, 22 January 2021, No 19NT05057).
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 explanations, 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 L481-3 of the FCC provides a non-exhaustive list of the types of damage for which victims of competition infringements may seek compensation:
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, 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 pretended to negotiate” (Paris Court of Appeal, 23 June 2021, No 17/0410). The Court of Appeal also recently ruled that the eviction of a daily newspaper due to abuse of a dominant position could cause moral damage. Indeed, the Court ruled that the eviction of the daily newspaper “tarnished the image and reputation” of the publishing company and “damaged the confidence and dynamics created around the launch of this new daily newspaper, undermining its ability to attract and retain new talent” (Paris Court of Appeal, 23 February 2022, No 19/19239).
In order to determine the damage, the courts have various procedural and non-procedural tools at their disposal:
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 (ie, 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 rate (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 identify the conditions under which a victim can request that their loss be evaluated using a WACC interest rate. The Paris Court of Appeal rejected the application of the WACC method on the grounds that the claimant “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). Even more recently, the Paris Court of Appeal ruled that unless it can be presumed that the victim company was deprived of the opportunity to invest the sums due to it, the application of the WACC to a failed project requires prior proof that the project could not be carried out because of the unavailability of capital. The WACC includes a component remunerating the risk so that it does not apply to known and determined past flows when no alternative investment is proved to have been lost. Therefore, the “hazardous” listing of projects that have not been proved to have been thoroughly studied is not sufficient for the application of the WACC (Paris Court of Appeal, 23 February 2022, No 19/19239).
It is also possible that the cartel caused “umbrella effects”. This raises the question of whether “indirect” buyers, who are collateral victims of the price increase, are entitled to claim compensation. The Council of State has acknowledged compensation for damage caused by an umbrella effect. In that case, the decision of the European 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 L481-4 of the FCC, 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. It should be noted that, recently, the Paris Court of Appeal found that the extra costs could only have been partially passed on to final prices in the case at hand (Paris Court of Appeal, 24 November 2021, No 20/04265).
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 cannot exceed the damage actually suffered. Under this general principle, claimants can only recover the amounts actually lost and not the amounts passed on.
Finally, the Council of State ruled that the burden of proof relating to the passing on of 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 (Council of State, 12 October 2020, SNCF Mobilités No 432981).
According to Article L481-8 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 statutory interest rate, 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.
The Paris Court of Appeal notably awarded over 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, as Digiciel had not succeeded in showing that the unavailability of the sums of which it was deprived had led it either:
However, it noted that the financial loss could 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 may 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 L481-11 of the FCC).
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 summary proceedings, any measure that does not encounter any serious challenge or that 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 summary proceedings 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 perform (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 proceeding orders are provisionally enforceable. The judge may, however, make provisional enforcement subject to the granting of a guarantee in the form of security of real or personal property, sufficient to cover all restitutions and damages (Articles 489 and 517-522 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 that is party to the settlement (Article L481-13 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 L483-14 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 EU except 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, 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 entirety or part of them on another party (Articles 695-696 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 R420-3 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.
Making Antitrust Litigation More Accessible and More Attractive
As underlined by the French Competition Authority in its 2021 annual report published in July 2022, "[s]ince th[e] transposition [of the Antitrust Damages Directive], actions for damages before national courts have significantly increased, with damages which can be very substantial”.
The growing antitrust litigation, albeit far from what can be observed across the Atlantic, is partially attributable to the Directive which dealt with some of the hurdles that were considered daunting for victims and therefore a hindrance to initiating actions for damages. Information asymmetry, the difficulties faced by claimants to prove a breach in such cases without the Competition Authority’s powers and resources are some of the issues the Directive sought to remedy.
Rendering private enforcement of antitrust law more accessible, more attractive, and therefore more threatening to potential cartelists has also been possible thanks to the European Court of Justice’s commitment to constantly refine the contours of the principle of effectiveness. The preliminary ruling of 6 October 2021 in the Sumal case (C-882/19) is a good example of how to expand the number of potential victims who will be able to act, even if it means potentially challenging well-established principles of civil liability. In this judgment, the ECJ established that the victim of an infringement of EU competition law committed by a parent company, whose liability is established by the Commission, may claim compensation from a subsidiary, even when the liability of such subsidiary has not been established. The only requirement will be that the two companies form part of the same economic unit at the time of the infringement, the claimants having to prove (i) the economic, organisational and legal links and (ii) the special link between the economic activity of the subsidiary and the subject matter of the parent company's infringement.
This finding raises several questions that have been discussed at length by scholars and lawyers. In the near future, it will be interesting to see whether it will lead to more antitrust litigation, with a potential increase of forum shopping.
Tackling the Issue of Loss Evaluation
Succeeding in a civil liability claim brought before French courts requires that a claimant proves a breach, a loss and a causal link between said breach and loss. The loss part of the triptych involves the tricky exercise of identifying – or challenging – the various items which make up such loss and quantifying them.
In its 2008 White Paper, the European Commission noted that: "Once the scope of damages is clear, the quantum of these damages must be calculated. This calculation, implying a comparison with the economic situation of the victim in the hypothetical scenario of a competitive market, is often a very cumbersome exercise. It can become excessively difficult or even practically impossible, if the idea that the exact amount of the harm suffered must always be precisely calculated is strictly applied."
In many competition cases, assessing damages requires highly technical expert knowledge. In its Communication on quantifying harm, the Commission acknowledges that: "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).)
The Commission has drawn up a practical guide detailing methods to quantify the harm. As noted by the Commission: "Such guidance may help the claimant make factual submissions to the court concerning the amount of damages claimed and may assist the defendant in pleading his position vis-à-vis these submissions by the claimant. The guidance may also help parties in finding a consensual resolution of their disputes, be it within or outside the context of judicial proceedings or alternative dispute resolution mechanisms." (Commission's Practical Guide Quantifying Harm in Actions for Damages Based on Breaches of Article 101 or 102 of the Treaty on the Functioning of the European Union.)
The Paris Court of Appeal has also drafted practical guides to help identify losses and quantify them.
Yet, despite these instruments of soft law, it remains difficult for parties to quantify their damages and for courts to arbitrate between opposing private expert opinions filed by the parties.
There are two means to help with this task: (i) reaching out to the Competition Authority, or (ii) relying on a court-appointed expert. While the first is specific to this field, the second is commonly used in civil proceedings in Continental Europe.
A court may reach out to the Competition Authority to assess the quantum of the loss sustained by the victim. In this respect, Article 17 of the Directive introduces the possibility for a national court, in the context of proceedings relating to an action for damages, to be assisted by the national competition authority (Article 17, paragraph 3 of the Damages Directive; Article R. 481-1 of the French Commercial Code; and Article R. 755-3 of the French Code of Administrative Justice).
Seeking the expert opinion of the Competition Authority is not completely new. French courts have been able to seek an advisory opinion on anti-competitive practices for over 30 years. Article L. 462-3 of the French Commercial Code empowers all courts (civil, criminal or administrative) to request an advisory opinion on competition matters that may arise in cases before them. Should the court decide to do so, proceedings in the presence of all the parties will take place before the Competition Authority, who will then provide the court with an opinion. In some ways, the use of advisory opinions resembles court-appointed expert proceedings. Most of the decisions in which there has been an advisory opinion relate to complex areas in which detailed analysis is required, such as distribution rights to football matches (Advisory Opinion No 15-A-19 of 25 October 2013) or natural gas distribution before deregulation (Advisory Opinion No 07-1-08 of 27 July 2007).
However, obtaining the Competition Authority's opinion on issues related to damages is new. As underlined by the French Competition Authority in its 2021 annual report, "[t]he new provisions on co-operation between the courts and the Authority should further encourage the development of such actions in the future. The specialised judicial courts and the administrative courts may seek the opinion of the Authority on the assessment of the requested damages." For instance, the Strasbourg Administrative Tribunal has relied on such an opinion to assess damages in a decision rendered on 20 October 2021 which condemned several companies involved in the school bus transport cartel to pay the European Collectivity of Alsace (Collectivité européenne d’Alsace) EUR2 million in damages.
When it comes to loss assessment an additional difficulty for parties and judges is the potential existence of heterogeneous decisions, which not only creates an impression of inequality between litigants but also creates a form a judicial uncertainty. While reaching out to the Competition Authority or court-appointed experts are relevant tools to assess damages during litigation, it is preferable for a claimant, its private experts and counsel to be able to quantify the loss beforehand in order to make a rational assessment of the opportunity to start a litigation. Interestingly, Professor Rafael Amaro has presented and discussed with judges, scholars and lawyers, a classification of damages triggered by anti-competitive practices. The purpose of such classification is to "ensure legal certainty and equality of treatment for litigants by standardising the practice of courts but also of counsel" (Rafael Amaro, 26 January 2022, Classification of Damages Caused by Anti-competitive Practices). The classification identifies four main types of damages corresponding to the four main economic effects for which compensation has already been accepted:
These four main types of damage are then broken down into items of compensable damage to cover the variety of damaging situations resulting from competition law violations.
Such classification will most certainly be further discussed and developed but it is an initiative to be followed closely and which can constitute a very helpful tool for parties and their counsel to build or defend a case.
The Need to Prevent Anti-competitive Practices to Avoid Antitrust Litigation
When discussing the trends and developments of antitrust litigation, one observation stands out: such litigation is becoming more and more strategic, with a significant increase in the reputational and financial risk exposure arising from an infringement of competition rules.
Considering the risk of heavy fines resulting from public enforcement and damages resulting from private enforcement claims as well as reputational damage, it is of paramount importance that companies have an effective compliance programme to prevent the risk of infringements and provide the appropriate procedures to detect and deal with cases of infringement that could not be prevented. In light of this, the French Competition Authority has published a new framework document on competition compliance dated 24 May 2022, which provides some guidelines for a well-built compliance programme. The Authority underlines the importance of monitoring the market in which the company operates in order to have a clear view of where the company stands, noting in particular that a shift to a dominant position would require an increase in the company’s vigilance. It sets out the five pillars a compliance programme should be based on on: