The Paris Court of Appeal has just overturned all the provisions of the French Competition Authority’s decision in the matter of endive producers, an event which is sufficiently rare to be eye-catching.
As a reminder, in 2012 the Authority sanctioned a series of practices implemented by some 10 endive producer organizations and seven representative organizations. At the time, to conclude at the existence of an anti-competitive agreement involving those producers and organizations, and more specifically a single, complex and continuous infringement, the Authority had identified an elaborate organized system whose sole objective was to control the prices of the endives sold by the producers to wholesalers and distributors. According to the Authority, these practices consisted of the regular circulation of minimum price instructions for each type of endive, issuing guidelines about promotional offers, managing the volumes of endives put on sale and exchanging information about the prices practiced by the producers.
However, the Court of Appeal noted that it had not been conclusively demonstrated that the implicated organizations had overstepped the boundaries of their legal missions in the general framework of the Common Agricultural Policy.
The Court of Appeal also recalled that, to be able to characterize a complex and continuous infringement, it was necessary to verify that the various practices concerned were sufficiently complementary: they had to contribute to achieving all the anti-competitive effects in the framework of a general plan which had a single objective.
However, in this case, one of the essential objectives of the specific rules applying to the agricultural sector is to protect producers’ income. In addition, regular contacts between endive producers and their professional organizations and exchanges of information cannot constitute a common modus operandias these exchanges were necessarily implied by the professional organizations’ missions.Consequently, according to the Court, the pursuit of a single anti-competitive objective throughout the duration of the reported practices had not been demonstrated.
Moreover, the Court found that the criterion of the continuity of the practices was not met, due particularly to the existence of “empty periods”. In addition, continuity cannot be illustrated exclusively by the circulation of minutes of meetings held at regular intervals insofar as most of the petitioners’ activities did not pursue an anti-competitive objective. The Authority could not then rule that there was a common intent to implement a continuous general plan.
In the end the Court of Appeal decided that no single, complex and continuous infringement had been established and therefore annulled the €3.9 million fines inflicted on the endive producer organizations and their professional organizations. This is revealing of the Court of Appeal’s pragmatism as it recognized the problems and rules specific to the agricultural sector but also the pressure on prices prevalent in the sector, particularly from the supermarket retailer customers.
