On 3 April 2015, the French Competition Authority (“FCA”) issued a revised procedural statement (communiqué de procédure) specifying the procedural rules to be applied to the FCA leniency program.
The FCA can gather evidence from companies that offered information under the FCA’s leniency program, set out in the French Commercial Code, pursuant to which partial or total immunity may be granted to a company which comes forward to report an anti-competitive practice in which it took part. The information given voluntarily by these whistleblowing companies is exchanged for reduced fines (please see the February 2015 and April 2015 editions of this Bulletin for illustrations).
It is widely considered that leniency programs encourage companies active in competition law violations to disclose their anti-competitive behaviour and that, as a result, consumers obtain a benefit from exempting whistleblowers rather than having them as heavily fined as the rest of the companies under scrutiny.
The revised procedural statement, which aims to increase the transparency and predictability of the FCA leniency program and to further align the FCA’s procedure with that of the EU Commission, can be summarized as follows:
1. Enhancements regarding “Type 2” leniency program applications
The FCA leniency program distinguishes between “Type 1” and “Type 2” leniency program applications. “Type 1” applications are eligible for total immunity and correspond to instances whereby a company contacts first the FCA to either provide valuable information on an anti- competitive practice the FCA was not aware of (so-called “Type 1A” applications) or brings evidence enabling the FCA to start proceedings against companies it suspected of competition law violations (so-called “Type 1B” applications). Those applications not qualifying for these requirements can only apply for partial immunity (“Type 2” applications).
The revised procedural statement clarifies the levels of reduction of the fines for “Type 2” leniency program applications, which are now as follows: 25 to 50 % for the first applicant to provide an information of significant added-value, 15 to 40 % for the second company, and 25 % for all other companies.
Interestingly, it follows from the above ranges of fine reductions that a subsequent “Type 2” leniency program applicant can benefit from an equal or even higher discount than the first applicant. This is because, in evaluating discounts, the FCA takes into account not only the ranking of the leniency program application but also the added-value of the information provided and the timing of the application.
2. Increased transparency of the leniency program
The revised procedural statement indicates that the FCA will issue press releases upon completion of each search and seizure operation. Equally informed, companies will be able to decide on the opportunity of filing a leniency program application with the FCA. This way, the FCA aligns its procedure with that of the European Commission, except to the extent that the identity of the targeted companies will not be disclosed, so as to preserve their presumption of innocence.
If the FCA eventually decides not to prosecute the targeted companies following inspection, the FCA will issue an updated press release.
Clarification of the combination of the leniency program and the non-challenge procedure
The revised procedural statement specifies that the companies’ cooperation must be total, which includes the prohibition for an applicant company to challenge, at any stage of the procedure, the evidence it provided.
This appears to exclude the possibility for a company applying for the benefit of the leniency program to add the benefit of the so-called non-challenge procedure, whereby companies do not challenge the anti-competitive claims made against them by the FCA while also undertaking commitments to modify their actions in the future, in exchange for substantial reductions in fines.
Until now, the combination of the leniency and non-challenge programs was allowed. The FCA first admitted this possibility (without actually applying it) in its laundry detergent decision 11-D-17 dated 8 December 2011, Secteur des lessives. However, the procedural gains resulting from the combination of both programs must be deemed sufficient, which may be the case when the claims notified by the FCA to the company are different from the revelations made by the company in relation to the leniency program. Such differences may concern either the material, temporal, or personal scope of the companies’ involvements. The combination of both programs was granted only once by the FCA (decision 13-D-12 of 28 May 2013, Secteur de la commercialisation de produits chimiques).
This revised procedural statement overrides the procedural statement of 2 March 2009 and is effective as of 3 April 2015 for any new leniency program application.