The legal basis for challenging cartel behaviour in France is Article L.420-1 of the Commercial Code. French competition law is largely based on EU competition regulation, so Article L.420-1 of the Commercial Code is quite similar to Article 101 of the TFEU and prohibits all agreements, concerted practices and alliances which have as their object, or may have as their effect, the prevention, restriction or distortion of competition in a market. Cartels are the most famous example of practices with an anti-competitive object.
The general antitrust enforcer is the French Competition Authority (FCA or Autorité de la concurrence), which is an administrative authority independent from the government. The FCA is divided between the investigation services placed under the authority of the General Rapporteur (Stanislas MARTIN) and the Panel that adopts the decisions (chaired by Isabelle de Silva), which is made up of 17 members who do not participate in the investigations. The FCA investigates cartel matters and other competition law infringements through the implementation of the Commercial Code, and works to ensure compliance with the competition rules in general.
The FCA will and should also apply Article 101 of the TFEU to cases or cartels affecting trade between the Members States. The Panel's decisions on cartels are subject to appeal before the Paris Court of Appeal and then before the Supreme Court (Cour de cassation).
The DGCCRF (Direction Générale de la Concurrence, de la Consommation et de la Répression des Fraudes), which is part of the French Ministry for the Economy, also has powers to deal with cartels, initiating prosecutions in liaison with the FCA. Pursuant to Article L.464-9 of the Commercial Code, the DGCCRF can investigate anti-competitive practices (for the purpose of informing the FCA), impose injunctions and propose financial settlements if the following conditions are met:
French law also provides for the criminal responsibility of employees or managers if they took a personal and determining part in the conception, organisation or implementation of a cartel. Under Article L.420-6 of the Commercial Code, individuals can be sued and incur criminal penalties (up to four years' imprisonment and a EUR75,000 fine), but sanctions remain very rare, having been enforced in only a few decisions (mostly in cases of public tenders). As far as is known, no decision has been issued in the past 12 months but some files, linked to FCA investigations, are under scrutiny and cases are under process.
Private Right of Action
There is a private right of action for challenging cartel behaviour in France in relation through a public proceeding as claimant at the FCA and private actions for damages claims complementing the public enforcement. Private parties who suffered a personal loss from a cartel can bring a private damage claim before the civil courts. Such actions are currently governed by the ordinary French rules of civil liability and can be brought even if the FCA has not issued a decision regarding the anti-competitive practice in question.
Within a private enforcement case, the plaintiff should prove an infringement of the competition rule, the damage suffered and a causal link between the fault and the damage. French courts apply the principle of full reparation of damages but do not use punitive damages. Some court decisions have been issued in 2019 after FCA sentences (fruit desert, homeproducts, etc) mostly by distributors.
In “standalone” actions, claimants have to prove the existence of the cartel and quantify the level of the damage, which can be very complex and may require the intervention of experts. However, regarding anti-competitive practices and more particularly cartels, the French Commercial Code facilitates and softens the action for the claimant. The Commercial Code implementing the UE directive on damages introduced an irrebuttable presumption of fault within sanction and injunction decisions pronounced by the Competition Authority (Article L.481-2).
Indeed, if the Competition Authority condemns a cartel, the judge of damages will be bound by this finding with an irrebuttable presumption regarding the existence and imputability of the anti-competitive practice, which significantly alleviates the difficulty of proving a causal link between the proven wrong and the alleged harm.
There is no precise definition of cartel conduct within the Commercial Code. The term “cartel” is generally used to describe a group of independent companies that join together to limit production, fix prices or share markets or customers between them. Pursuant to Article L.420-1 of the Commercial Code, cartels are covered by the prohibition of anti-competitive agreements, as detailed under 1.1 Statutory Bases for Challenging Cartel Behaviour/Effects.
In practice, the FCA follows the European Commission Guidance and the ECJ case law, even if the European competition rules are not applicable. Cartels are mostly horizontal agreements between competitors (the four historical issuers of restaurant vouchers in France were fined up to EUR415 million on the grounds that they have breached competition law by engaging in cartel practices 19-D-25 17 December 2019) but could be also mixed with vertical practices (APPLE and two wholesalers have been recently condemned for a cartel on quantity and client sharing FCA Press release 16 March 2020).
Article L.420-4 of the Commercial Code sets out exemptions for cartel prohibitions that are excluded in the application of Article L.420-1 of the same code. One exemption concerns practices resulting from the implementation of a law or regulation (tariffs for the consultation and for certain surgical acts). Another exemption is about practices that ensure economic progress and reserve a fair share in the resultant profit for users (used for certain practices in the agricultural sector).
The limitation period for actions before the FCA and/or for private damage is five years.
Article L.462-7 of the Commercial Code makes it possible to interrupt the public and civil limitation period with "any act tending to the investigation, detection or sanction of anti-competitive practices."
The five-year limitation period for civil actions for damages begins to run only when "the plaintiff knew or ought to have known cumulatively" the acts complained of and the fact that they constitute an anti-competitive practice. In any event, the requirement does not run until the anti-competitive practice has ceased.
Since March 2014, Article L.462-7 of the Commercial Code has provided that the prescription of the civil action of these victims was interrupted by the opening of proceedings before the Competition Authority, the European Commission or a competition authority of a Member State. This interruption has effects until the final decision. The Paris commercial court decided that this new regulation was not a binding for case before 2014.
The FCA is a member of the European Competition Network (ECN), and is entitled to punish any cartel that has a possible effect in the French territory. The same practice affecting trade between Member States may be pending before several National Competition Authorities (NCAs), whether or not they have been seized automatically, and whether they were seized by different or the same complainants.
An interesting decision relating to cross-border issues is decision No 12-D-09 of the FCA dated 13 March 2012, partially confirmed by the Court of Appeal in 2014, in which the FCA fined a cartel in the packaged flour industry in the food retailing sector. An application for leniency was submitted in parallel before the French and German competition authorities by a German miller. Dawn raids were conducted in both France and Germany.
In France, there is no principle according to which authorities should take other countries’ important interests into account while conducting their law enforcement activities, in return for their doing the same.
The FCA appoints one or two “rapporteurs” to investigate the case. They make an initial assessment in line with the General Rapporteur, who decides whether or not to carry out investigations (simple investigations or dawn raids).
Dawn raids require an order of the judge of freedoms and detention (JLD) of the court in the jurisdiction in which the places to be visited are located, or a delegated judge authorising visits and seizures, before they can be carried out.
Dawn raids will be authorised on the request of the General Rapporteur upon the FCA showing presumptions of a cartel. If the JLD authorises the dawn raid, the rapporteurs are accompanied by a police officer.
The authority of the court authorising the search must be notified, and the company has the right to be assisted by a lawyer.
The decision authorising the dawn raid fixes the extent of the collection of documents allowed. There is no limitation on the search measures for these visits – investigators can search the office's cabinets, vehicles, computers and mobile phones.
Investigators work in groups and prohibit employees of the company being investigated from making phone calls, in order to avoid the spoliation of potentially relevant information. They also seal the premises, if necessary, during the operation process.
The subject companies and their employees must co-operate with enforcers and respect the provisions relating to the dawn raid. The breach of a seal or any damage to the integrity of an e-mail system constitutes an obstruction within the meaning of Article L.464-4-2 of the French Commercial Code. On 22 May 2019, the FCA fined a company EUR900,000 for such practices (FCA decision 19-D-09 Groupe AKKA).
The role of lawyers in dawn raids has been the subject of much discussion. Investigators previously refused to allow lawyers to take an active part in the operations, for the verification of seized documents, reservations, the posing question, oral explanations, etc. However, several judgments of the Court of Cassation have censured this practice, restating that the right to counsel cannot be limited to a role of mere observer, although the lawyer should require the police officer judiciary to revert to the judge if there is an issue during the investigation.
After the dawn raid the lawyer can directly file a claim for unfair and/or excessive dawn raid.
Individuals are generally not required to have separate counsel, unless they are personally charged for obstruction and/or was a leader of the cartel and/or they left the company and were involved in the infringement.
As soon as the dawn raid starts, the counsel must analyse the request for investigation with in-house counsels and set up a team (lawyers and/or company workers) to follow the investigators, to make sure that the company's rights are preserved (ie, the protection of privileged documents, etc).
Companies may spontaneously give information regarding the conduct of competitors. They can either make a formal complaint or provide informal information for the FCA to pursue investigations. The FCA can then launch a simple or heavy inquiry.
The simple inquiry is provided for in Article L. 450-3 of the French Commercial Code. Investigators or rapporteurs can access all business premises, request the communication of professional documents, obtain or take copies of professional documents by any means and in any medium, and collect on the spot any documents and information necessary to maintain control of the proceedings. Unlike the heavy investigation, there are no forcible searches, seizures, or access to authorised private premises. Investigators come without a warrant or judicial authorisation.
Various circumstances may give rise to this type of investigation, including requests for information, interviews, simple inspection visits, preliminary investigations, complementary investigations after heavy inspection, etc.
A thorough, in-depth investigation is provided for by Article L. 450-4 of the French Commercial Code. Investigators can have access to business premises and private premises. Investigators authorised by the JLD can organise visits/searches in premises, grounds and non-professional means of transport, including the homes of employees or representatives of the company when there may be documents there relating to the offences. They have the same powers as in the business premises, but they can seal commercial premises only.
If there is any obstruction, the investigators can ask the judicial police officer to make use of the public constraint. They have the right to search premises and digital devices, and can seize or copy any document or information medium, whether private or professional, original or copy. Investigators can still interview the occupant of the premises and record his or her answers, but cannot search their personal belongings (sucha as their bag or purse), nor proceed to a search of the body, without authorisation.
The FCA can use any media relating to a cartel (Paris palaces cartel was find after a TV report, bread cartel was commented in a popular newspaper). The FCA can also send questionnaire to anyone and can request testimony for oral declaration.
As far as is known, no decision has been issued regarding the seizure of documents located in the cloud. Companies/individuals are compelled to produce documents or evidence that are available to them, even if electronic data are saved on servers located outside the French territory.
During dawn raids and/or for any FCA inquiry, a company may refuse access to any document covered by the legal privilege within the meaning of French law. Written communications (including emails) between the company and an independent lawyer outside the company that are intended to provide legal advice or are related to pending or potential legal proceedings are protected by this statute.
Written communications involving in-house lawyers but no outside lawyer are not protected by the French legal privilege, and can therefore be copied or captured by investigators. If the protected status of a document is in dispute, the company cannot prevent the copying or seizure of this document by investigators, and will have to verify that the challenge under the legal privilege is included in a report. However, in such case, the FCA has recently put a special procedure in place.
Within (generally) two weeks after the dawn raid, it allows the company to identify the protected documents among the documents seized and if it considers that the request is well-founded, the protected documents or data are given back or deleted. At the end of the visit/search, in any case, the company may challenge the copy or seizure before the First President of the Court of Appeal of the same jurisdiction as the JLD.
Regarding the privilege against self-incrimination, companies cannot be forced to admit that they have committed an offence, but they are in any case obliged to answer questions with factual information and to produce requested documents, even if such information can be used to establish the existence of an infringement by them or another undertaking.
Investigators are bound by professional secrecy. The existence of strategic documents among the documents seized is worth mentioning, as non-confidential version can then be added to the file. If there is a disagreement regarding the status of a document, a record of disagreement is drawn up, and a copy of the disputed document is placed in a sealed envelope pending the decision of the Tribunal.
Initial requests for information are not commonly resisted, and doing so is severely sanctioned. In the absence of co-operation, the company may incur liability, which may result in a fine of up to 1% of worldwide turnover, and a penalty of up to 5% of the average daily turnover. In any case, blocking, destroying parts or breaking seals exposes firms to an aggravating circumstance for calculating the fine. For instance, on 22 May 2019 the FCA applied a sanction of up to EUR900,000 for obstructing the conduct of visits and seizures carried out by the Authority (breakage of seals and alteration of the operation of a mailbox).
In the absence of co-operation, there is also a French offence of obstruction, which can possibly lead to criminal responsibility for the individual (a fine of EUR7,500 and/or imprisonment of six months).
Business secrecy can be opposed but only to third parties and not to the investigators – see 2.13 Other Relevant Privileges.
Defence counsels may raise arguments after the target of a cartel investigation receives notification of the statement of objections.
When the company receives the formal notification, the company under investigation may choose to prepare a defence memorandum, addressing all or part of the grievances stated by the FCA, or may file for a transaction process.
On 2 March 2009, the FCA adopted a new procedural notice relating to the French Leniency Programme. According to the leniency programme, the FCA may grant an undertaking that is liable to be fined for taking part in an anti-competitive agreement or concerted practice full or partial immunity if the undertaking helps to establish the existence of the agreement or practice. In principle, the agreements concerned are cartels between undertakings consisting of the fixing of prices, the allocation of production or sales quotas or the sharing of markets, including bid-rigging, or any other similar anti-competitive behaviour between competitors (such as "hub and spoke").
Thirteen decisions have been published based on the leniency programme since 2009.
In 2015, the FCA adopted a revised text of its procedural notice on the leniency programme, which notably took into account the results of the 15 April 2014 leniency study and the changes made to the European model programme in November 2012.
The FCA can summon employees to an interview. Employees must co-operate and answer the investigators’ questions.
The FCA can ask for information by sending questionnaires through the means of Foreign Enforcement Agencies, especially the ECN (see 3.5 Co-operation with Foreign Enforcement Agencies).
The FCA can ask for information by sending questionnaires.
There is significant co-operation between the FCA and the DGCCRF for the investigation and sanction of anti-competitive practices, provided for by Article L.464-9 of the French Commercial Code.
The Minister in Charge of the Economy may order companies to put an end to the practices referred to in Articles L.420-1 to L.420-2-2 and L.420-5, or contrary to measures taken pursuant to Article L.410-3, when these practices affect a local market and do not concern facts falling under Articles 101 and 102 of the TFEU, provided that the turnover of each company in France during the last financial year does not exceed EUR50 million, and their cumulative turnover does not exceed EUR200 million.
The Minister in Charge of the Economy can also, under the same conditions, propose a settlement. The amount of the transaction may not exceed EUR150,000 or 5% of the last known turnover in France if this value is lower. The terms of the transaction are set by decree. The timely performance of the obligations resulting from the injunction and the acceptance of the transaction extinguish any action before the FCA for the same facts. The Minister in Charge of the Economy informs the FCA of the concluded transactions.
The Minister cannot propose a transaction or impose an injunction when the same facts have previously been submitted to the FCA by a company, unless the FCA has rejected the referral.
If there is a refusal to compromise, the Minister in Charge of the Economy send the file to the FCA. He also applies to the FCA in the case of non-execution of injunctions or the obligations resulting from the acceptance of the transaction.
On a broader level, on 31 January 2019, the DGCCRF and the French data protection authority (CNIL) signed a new co-operation protocol. The two authorities decided to strengthen their collaboration and adapt it to the new digital challenges. This new agreement is related to consumers’ rights for data protection but may ease competition investigations in the future.
The European Competition Network (ECN) brings together the National Competition Authorities (NCAs) of the Member States of the European Union around the European Commission. In France, since the entry into force of the Law on the Modernisation of the Economy of 4 August 2008, and the ordinance for the modernisation of competition regulation of 13 November 2008, the FCA has been designated by the government as the sole NCA as defined by European law, replacing the former system under which this function was shared between the Conseil de la concurrence and the Ministry of Economy (DGCCRF). In this capacity, it takes part in all proceedings of the European Commission’s Directorate General for Competition (DG COMP) concerning individual merger or anti-competitive practices cases, and in drawing up legislation.
A representative of the government, generally from the Ministry of Economy (DGCCRF), may also be called upon to take part in works on subjects other than individual cases.
Different NCAs in the ECN may co-operate in order to analyse practices in various sectors. For instance, the FCA and the German Bunderskartellamt published an opinion on competition and data in 2016 and recently on November 2019, an opinion on algorithms and competition. On June 2019 the G7 competition authorities issued an common understanding on competition and digital economy.
Criminal proceedings are independent from the administrative procedure before the Competition Authority. Therefore, the prosecutor, like the victim, can implement a public action where no procedure was launched before the Competition Authority.
The annulment of the transmission of the Competition Authority's file to the public prosecutor's office does not call into question the continuation of the proceedings before the criminal court. In fact, the public prosecutor is entitled under Articles 40 and 41 of the Code of Criminal Procedure to order a preliminary inquiry in light of all the information addressed to him.
Referral to the criminal court does not relieve the Competition Authority of the case, and the pronouncement of a sanction may possibly be added to the sanction pronounced by the criminal court.
There is no specific procedure – only the French civil proceeding rules.
Enforcement actions before the civil courts are autonomous proceedings brought against each party to a cartel. Victims cannot sue in multiple parties within one trial.
The victim has to sue each participant in the anti-competitive practice, and has to prove the damage directly suffered because of the participant’s actions.
As described previously, the victim has to prove the damage suffered and the causal link between the defendant’s acts and the damage suffered when the qualification of the anti-competitive practice was previously made by the FCA.
As far as follow-on actions are concerned, the facts have previously been found by the FCA.
If there was no FCA decision prior to the proceeding, the party claiming to be a victim of anti-competitive practices must provide proof. The judge shall then apply the law to those facts.
Evidence obtained in one proceeding may, under control, be used in other proceedings.
Pursuant to the directive on rules governing actions for damages under national law for infringements of the competition law provisions of the Member States and of the European Union for the purpose of actions for damages, national courts cannot at any time order a party or a third party to disclose any of the following categories of evidence:
Apart from the irrebuttable presumption previously described, the general rules of evidence apply.
Economists have a determining role in evaluating the damage to the market economy as a result of anti-competitive behaviour.
The FCA has its own economist service. Parties are generally accompanied by their own economist before the FCA and before the courts when arguing the alleged damage caused to the economy.
Please see 2.13 Other Relevant Privileges.
The principle of non bis in idem prevents the same facts from being judged twice.
Actions may be brought before commercial courts when there is no FCA decision, or after such a decision (follow on), for the victims to obtain compensation for the loss suffered.
Pursuant to Article L.464-2 of the French Commercial Code, the FCA may impose fines on bodies or companies that have breached Article L.420-1 or L.420-2 of the French Commercial Code. The amount of the individual fines is set according to the seriousness of the facts, the extent of the harm done to the economy, the situation of the body or company that is being sanctioned or of the group to which it belongs, and whether it is a repetition of previous infringements of competition rules.
In accordance with the same article, the maximum amount of the fine is 10% of the tax-exclusive global turnover of the group to which the fined company belongs.
For private damages, the parties must file a case before the commercial court.
A settlement is a kind of plea bargaining, which succeeds the Non Contestation of Grounds and was introduced into the French Commercial Code in Article L.464-2 III by the law for growth, activity and equal economic opportunity, known as the "Macron Law" of 6 August 2015. This procedure allows companies that waive the right to challenge the grounds notified by the investigation services of the FCA to have the General Rapporteur of the Authority propose a transaction setting the maximum and minimum amount of penalty. After acceptance of the transaction by the companies, the General Rapporteur proposes that the panel pronounces the pecuniary sanction within the limits fixed by the transaction.
Companies can also commit to changing their behaviour in the future, and the General Rapporteur can take this into account in their transaction proposal.
See 1.3 Private Challenges of Cartel Behaviour/Effects regarding the existence of an irrebuttable presumption of the existence of anti-competitive behaviour after a decision of the FCA. The presumption does not exist where the company agrees with FCA validated commitments.
The FCA is responsible for the protection of the economic order, but it is not a criminal court and does not pronounce criminal judgments.
During the investigation at the request of the plaintiff and/or the Ministry of Economy and/or on its own initiative, interim measures can be imposed on parties if the FCA believes there is a serious and immediate threat to an economic sector or company. Such measures may take the form of an injunction, such as the removal of anti-competitive clauses in a contract or the modification of statutory provisions.
At the end of the investigation phase, the FCA may adopt the following decisions:
The Acceptance of Commitments
Article L.464-2, I of the French Commercial Code (modified by Article 2 of Ordinance No 2008-1161 of 13 November 2008 for the modernisation of competition regulation) grants the FCA the power “to accept commitments proposed by undertakings or associations of undertakings and to put an end to anti-competitive practices, in compliance with Articles L.420-1, L.420-2 and L.420-5.”
Pursuant to Article L.464-2 of the French Commercial Code, the FCA may impose a penalty of up to 10% of the global turnover of the company. In each case the penalty is proportional to the seriousness of the practice, the damage dealt to the economy of the sector, the business situation, and the possible repetition of facts.
If the company agrees not to contest the allegations and to change its behaviour in the future, it can achieve a reduction of the penalty incurred.
Article L.464-2 of the French Commercial Code also states that the FCA may require the company to stop the anti-competitive practice complained of, or to positively modify its behaviour in order to comply with competition law (commitment procedure).
In addition, pursuant to the provisions of Article L.462-6 of the French Commercial Code, the FCA may refer the case to prosecutors "when the facts seem to him to justify the application of Article L.420-6 of the Commercial Code", noting that Article L.420-6 of the French Commercial Code imposes a punishment of four years’ imprisonment and a fine of EUR75,000 on any individuals who "fraudulently take [a] personal and decisive [part] in the design, organisation and implementation practices referred to in Articles L.420-1 and L.420-2".
The sanctions are fixed by the court after a hearing. The parties communicate economic studies on the amount of the damage suffered. If the court is not convinced the claim can be dismissed and if the court cannot decide between opposite economic studies an expertise can be imposed to the parties.
The FCA changed its position in October 2017 and decided that compliance programmes are not intended, in a general way, to justify mitigation of penalties for competition law infringements, especially in the case of particularly serious offences such as cartels and the exchange of information on future prices and commercial policy (see decision 17-D-20 of the FCA dated 18 October 2017).
There is no direct extension of sanctions to consumer redress. Consumers should file a case before the court to obtain damages, but the FCA could ask for remedies that could prevent from new consumer damage.
Appeals against decisions of the FCA are heard by the Paris Court of Appeal, which may annul or revise the decision of the FCA and order the suspension of the execution of the decision.
Cancellations are extremely rare; reformations are a little bit more frequent but are limited most often to reductions of sanctions or a stricter analysis of the qualification of agreement (see the cases regarding endives or flour, for example).
The French courts handle claims for damages suffered by victims of anti-competitive practices ("private enforcement").
Specialised civil and criminal courts (under the control of courts of appeal and the French Supreme Court) may be used by the victims of cartels for the compensation, cancellation or termination of anti-competitive practices prohibited by Article L.420-1 of the French Commercial Code (note that, pursuant to Article L.462-3 of the French Commercial Code, the FCA may be consulted by the courts regarding anti-competitive practices; such a consultation suspends the statute of limitation, but the courts are under no obligation to follow the opinion of the FCA).
In March 2014, the French Commercial Code introduced the possibility of a class action, which is limited to consumers – ie, "any physical person who is acting for purposes that are not part of his commercial, industrial, artisanal, liberal or agricultural activity" (introductory article of the French Consumer Code) – and focuses exclusively on compensation for pecuniary loss. The collective action is based on an opt-in principle (which implies the voluntary adhesion of the consumer to the group). The right to bring action is reserved to duly authorised French consumer associations.
It follows from the new Article L.481-5 of the French Commercial Code that the indirect buyer "is deemed to have brought the proof of (the) repercussion when it justifies that:
It remains open to the defendant to prove that the repercussion did not take place or was only partial, cases based on facts previous to this law are not subject to these new rules.
Evidence from governmental investigations or proceedings is admissible.
Most claims lead to a settlement. For claims that continue in court, there are more sentencing decisions than dismissals.
There is no such system in French practice. Success fees are fixed privately with the client.
Unsuccessful claimants must pay the defence costs, fixed by the court and not directly related to the real costs and attorney fees (Article 700 of French civil procedure code).
The appeal is filed before the Paris Court of Appeal, on French civil proceeding rules and some specific standards (eg, delay for appeal one month and motivation one month, etc).
There is recently an increase of competition investigations conducted on the basis of the French Code of Criminal Procedure and not on the basis of the French Commercial Code.
See 3.6 Procedure for Issuing Complaints/Indictments in Criminal Cases.
The FCA published the Guide for Companies on Antitrust Compliance and Compliance Programmes to help companies see how complying with the competition rules can be a winning investment for them. It presents some of the “good practices” to be followed, and provides practical suggestions for action that can be implemented regardless of the company’s size or other characteristics.
Regarding competition law enforcement:
Because of the COVID-19 crisis, the selling prices of hydroalcoholic gels were regulated as of March 5th to avoid any speculation and cartels. These provisions were included in Decree No 2020-293 of 23 March 2020 prescribing the general measures necessary to deal with the COVID-19 epidemic in the context of the state of health emergency. For the same reason, Decree No 2020-506 of 2 May 2020 regulates the maximum selling price of single-use surgical masks that meet the definition of medical devices.
These are rare occasions where the freedom of prices and competition has been set aside, by the government.
Although the FCA's premises have been closed since 17 March 2020 due to the containment ordered by the French government, its services and namely investigation services continue to work remotely.
On its website, the FCA announced that it will attach importance to ensure that products considered essential remain available at competitive prices.
Remedying Behaviour via an Internal Network
The FCA's investigation services are described as mobilised. An internal network has been set up, in particular to pool market surveillance work during the crisis, analyse the various types of behaviour observed and, where necessary, take action to remedy the behaviour detected as effectively as possible.
In this respect, the FCA has communicated an email address in order to allow any individual or company to communicate to the investigation services any action taken by one or more companies which would be likely to be anti-competitive.
The FCA thus announced on 6 April 2020 that it had closed an investigation into the conditions for importing respiratory assistance equipment into French Guiana and the French West Indies. The investigation – on exclusive import practices - was launched on March 30th following a report made to the FCA by a Guyanese company. During the investigation, the undertaking under scrutiny has modified its distribution conditions in order to allow all undertakings established in these territories to import respiratory assistance equipment.
Following this, the FCA has closed the investigations considering this initiative is favourable to competition on the markets concerned.
The internal network set up by the FCA is also intended to enable the FCA to respond quickly and as pragmatically as possible to requests aimed at securing virtuous cooperation initiatives between companies, in particular to guarantee the production and fair distribution of essential products to all consumers. In this context, the FCA will provide informal advice on the compatibility with competition law of any co-operation project or implementation arrangements.
A New Trend: The Conduct of Competition Investigations on the Basis of the French Code of Criminal Procedure
After the transposition of the Directive on remedies for anti-competitive practices, a large number of actions have been brought before the courts, but the most recent developments are as follows, we observe recently triggering of competition investigations not only on the basis of the French Commercial Code but on also the basis of the French Code of Criminal Procedure.
French law provides indeed for the criminal responsibility of employees or managers if they took a personal and determining part in the conception, organisation or implementation of a cartel. Under Article L.420-6 of the French Commercial Code, individuals can be sued and incur criminal penalties (up to four years imprisonment and a EUR75,000 fine), but sanctions remain very rare, having been enforced in only a few decisions (mostly in cases of public tenders).
Moreover, the public prosecutor is entitled under Articles 40 (“The public prosecutor receives complaints and denunciations and assesses the action to be taken on them”) and 41 of the French Code of Criminal Procedure (“The public prosecutor shall carry out or cause to be carried out all acts necessary for the investigation and prosecution of offences under criminal law”) to order a preliminary inquiry in light of all the information addressed to them.
In theory, criminal proceedings are independent from the administrative procedure before the French Competition Authority (hereinafter referred to as the “FCA” or the “Authority”).
Nonetheless, Article L.462-6 of the French Commercial Code foresees that where the facts appear to the FCA to justify the application of Article L. 420-6, it shall send the file to the public prosecutor.
Until now, the FCA has made a very discreet use of this possibility. Only eight cases referred to the public prosecutor by the FCA have been officially counted since 1987. Moreover, the FCA officially recognises that it shall not communicate to the public prosecutor its files related to cases based on leniency applications filed by one or more undertakings.
Nevertheless, we observe a deeper co-operation between the investigation services of the FCA and the public prosecutor's office and Article L.450-1 of the Commercial Code was amended in 2014 in order to allow the FCA agents to receive rogatory commission from investigating judges. In practice, investigations services of the FCA use the facilities offered to investigators in criminal investigations to compile the FCA's investigation file.
Providing information to public prosecutors
According to Article 40 of the French Code of Criminal Procedure, “any constituted authority, public official or civil servant who, in the exercise of his or her functions, acquires knowledge of a crime or offence shall be required to notify the public prosecutor thereof without delay and to transmit to that public prosecutor all information, reports and acts relating thereto”.
Thus, investigation services of the FCA may communicate to the public prosecutor facts and elements that may constitute an offence condemned by Article L.420-6 of the French Commercial Code described above. Provided a criminal instruction is opened and conducted, an investigating judge may issue a rogatory commission to investigators of the FCA to participate to the criminal investigations. Following this, investigation services of the FCA may request communication of the criminal case on the basis of Article L.463-5 of the French Commercial Code (“The investigating and trial courts may communicate to the Competition Authority, at its request, the minutes of the investigation reports or other documents of the criminal investigation having a direct link with the facts before the Authority”).
In this way, investigation services of the FCA are in possession of the evidence they have previously gathered during the criminal investigations on behalf of the investigating judge.
Advantages of criminal investigations
Criminal investigations present several significant advantages for the FCA as publicly recognised by the General Rapporteur – the head of the investigation services of the FCA. The main advantage certainly lies in the additional means granted to criminal investigators such as telephone tapping, video surveillance or custody. These additional means are particularly prejudicial to individual freedoms.
Moreover, the criminal investigation procedure also presents fundamental differences with the administrative investigation in terms of protection of the rights of the defence during the conduct of dawn raids. Dawn raids conducted under criminal investigations do not foresee the presence of a counsel, nor the submission of a report at the end of the operations, nor the possibility of appealing the conduct of the dawn raids.
Consistent with these limits to the rights of defence, the General Rapporteur reaffirmed that criminal investigations are conducted by an independent and impartial judge and offers strong guaranties to ensure the rights of the defence.
This trend raises many questions from practitioners facing both the lack of established doctrine and case law on this new way of conducting competition investigations.
In particular, critics concentrate on the use of the means not to ensure application of Article L.420-6 of the French Commercial Code to any individual who took a personal and determining part in the conception, organisation or implementation of a cartel and finally obtaining a criminal decision, but rather to ensure the effectiveness of the proceedings before the FCA.
Finally, it should be stressed out that this trend is also reopening the debate on the application of the criminal offence foreseen by Article L.420-6 of the French Commercial Code to legal persons, whilst this provision requires a "personal" implication in the practice and the possibility of cumulating the criminal penalty and the administrative penalty to a sole undertaking in contradiction with the principle non bis idem.
Some investigations are currently ongoing, in particular a major case of potential vertical and horizontal anticompetitive agreement involving many major companies. It is, however, unlikely that the case will be judged in 2020.
Anti-competitive Practices and Competition Investigations During the COVID-19 Crisis
Although the FCA's premises have been closed since 17 March 2020 due to the containment order from the French government, its services, importantly its investigation services, continue to work remotely.
The FCA has published a press release on its website on the application of competition law and the conduct of investigations within the context of the COVID-19 crisis.
The following information could be further updated in the light of changes in the health situation in France and should therefore be taken with caution.
First of all, the FCA recalls that its work is part of the message communicated jointly by the European Commission and the European Competition Network (which brings together all the national competition authorities of the EU member states - hereinafter referred to as “ECN”) on 23 March 2020.
The message from the ECN included the following.
The different EU competition instruments have mechanisms to take into account, where appropriate and necessary, market and economic developments.
The extraordinary situation caused by the COVID-19 crisis may trigger the need for companies to co-operate in order to ensure the supply and fair distribution of scarce products to all consumers.
Such measures would in any case appear unlikely to be problematic, since they would either not amount to a restriction of competition or generate efficiencies that would most likely outweigh any such restriction.
It is of utmost importance to ensure that products considered essential to protect the health of consumers in the current situation (eg, face masks and sanitising gel) remain available at competitive prices. Legal actions will be engaged against companies taking advantage of the current situation by cartelising or abusing their dominant position.
Existing rules allow manufacturers to set maximum prices for its products. The latter could prove useful to limit unjustified price increase at the distribution level.
Implementing the ECN message
On this specific point, it should be noted that Article L.410-2 of the French Commercial Code authorises the French Government to adopt interim measures to regulate prices in a determinate sector. The French Government has already used this legal basis to regulate the prices of sanitising gels by decrees.
FCA investigation services
The FCA's investigation services are described as "mobilised". An internal network has been set up, in particular to pool market surveillance work during the crisis, analyse the various types of behaviour observed and, where necessary, take action to remedy the behaviour detected as effectively as possible.
In this respect, the FCA has communicated an email address in order to allow any individual or company to communicate to the investigation services any action taken by one or more companies which would be likely to be anti-competitive..
On its website, the FCA announced that it will implement measures to ensure that products considered essential remain available at competitive prices.
The FCA thus announced, on 6 April 2020, that it had closed an investigation into the conditions for importing respiratory assistance equipment into French Guiana and the French West Indies. The investigation – on exclusive import practices - was launched on March 30th following a report made to the FCA by a Guyanese company. During the investigation, the undertaking under scrutiny has modified its distribution conditions in order to allow all undertakings established in these territories to import respiratory assistance equipment. Following this, the FCA has closed the investigations considering this initiative is favourable to competition on the markets concerned.
The internal network set up by the FCA is also intended to enable the FCA to respond quickly and as pragmatically as possible to requests aimed at securing virtuous cooperation initiatives between companies, in particular to guarantee the production and fair distribution of essential products to all consumers. In this context, the FCA will provide informal advice on the compatibility with competition law of any co-operation project or implementation arrangements. The FCA thus announces, on 22 April 2020, that is has clarified the options of a professional association for dealing with its members' rent duding the COVID-19 pandemic.
FCA deadlines and procedures
Deadlines and procedures in front of the FCA have been adapted from 27 March 2020, due to the state of public health emergency.
Three important aspects to note are the following.
First, the two-month period available to companies to submit their observations in response to a statement of objections or a report addressed by the FCA was suspended with effect from 17 March 2020 and resumed from 12 May 2020 (Decree No 2020-423 of 14 April 2020, supplementing Decree No 2020-293 of 23 March 2020 setting out general measures to deal with the COVID-19 epidemic in the context of the state of health emergency, established that the travel restrictions would be lifted on 11 May 2020).
Second, until the end of the travel restrictions instituted by the French Government on 16 March 2020 leniency applications had to be filed electronically by sending the form available on the website of the FCA duly completed to the following address: email@example.com to the exclusion of any other means of transmission.
And finally, until the end of the travel restrictions instituted by the French Government on 16 March 2020, all questions related to the proceedings in front of the FCA, had to be sent by electronic means to the FCA, which acknowledged receipt, to the following address: firstname.lastname@example.org.