The French Competition Authority (“FCA”) has sanctioned both a non-compete clause between a subsidiary and one of its parent companies and the allotment of new berths that became available at Port 2000 (Port of Le Havre). This decision sets out the limits of intra group non-compete clauses and confirms that an agreement between competitors is not exempt from liability even where it was instigated by a public body.
In its decision of 15 April 2010, the FCA sanctioned two agreements that it deemed anticompetitive in the stevedoring sector at the port of Le Havre and imposed relatively modest fines, for a total of 595,000 euros.
The first agreement concerned the implementation of a non-compete clause between Perrigault and its subsidiary, Terminal Porte Oceane (“TPO”) which is jointly owned by Perrigault and the shipowner, Maersk. The FCA criticised Perrigault and TPO for restricting TPO’s commercial activities to those commissioned by Maersk, excluding all other clients. In doing this, the companies had widely interpreted the non-compete clause which prohibited TPO from doing business with clients of Perrigault which had used Perrigault’s terminals at Le Havre in the last 12 months.
In their defence, the companies argued that the non-compete clause had been concluded intra-group and therefore could not amount to a restrictive agreement. The FCA dismissed this argument on the ground that TPO was financially and commercially autonomous vis-à-vis its parents and that the non-compete clause could not be extended to clients other than Perrigault’s. The FCA thereby reiterated that intra-group agreements are not caught by the prohibition of restrictive agreements only where the undertakings concerned lack autonomy vis-à-vis each other. Competitions rules remain applicable to relationships between parent companies and their common subsidiary which, from a practical point of view, appear artificial.
In relation to the second agreement on the allotment of the new berths which became available as a result of the extension of the port (Project “Port 2000”), the FCA examined the role of the Grand Port Maritime du Havre (“GPMH”) which explicitly urged the bidders to agree among themselves on how they would distribute the berths. Given that GPMH is a public body entrusted with port management, the FCA does not have the power to sanction GPMH’s activities - even if the FCA, referred to such activities as being “very unfortunate”. The FCA said however that GPMH’s prods, which did not constitute overwhelming pressure, did not exonerate the bidders of their liability. The FCA did however take this into account as a mitigating factor and only found the bidders guilty in principle.
Besides a reference to the use of the term “Yalta”, by the participants to an agreement retained by the FCA, as an indication of market sharing and again sanctioned here, the FCA reiterated the standard of proof between, on one side, meetings held in the context of the statutory duties of a trade association and, on the other side, informal meetings which competitors attend at their own initiative. Participation in one trade association meeting - the agenda of which evolved to discussing anticompetitive matters - is not sufficient to conclude that the attendees at the meeting were parties to an anti-competitive agreement - further evidence is required. However, participation (whether active or passive) in a single informal meeting between competitors constitutes sufficient evidence of the existence of an anti-competitive agreement. This distinction is specific to France.
At EU level there is zero tolerance of anti-competitive discussions at trade association meetings.
This decision is surprising if you balance the seriousness of the practices involved against the relatively small amount of fines imposed. It is however interesting in the sense that it reiterates the FCA’s position on a series of issues which may have significant practical consequences.