Enforcement proceedings in dominance in France

Enforcement proceedings

Which authorities are responsible for enforcement of the dominance rules and what powers of investigation do they have?

The French authority responsible for the public enforcement of the dominance rules is the FCA, which has decision-making power over abuses of dominant cases and also enjoys power of investigations.

In order to assess whether a practice falls within the scope of article L420-2, the officials of the FCA’s investigation services are authorised to carry out two types of inquiries:

• in a ‘simple’ investigation, the officials may access all premises or means of transport for professional use and places of performance of services, require communication and take copies of books, invoices and all other professional documents and also collect any necessary information, proof or justification; and
• in the context of investigations requested by the EU Commission, the Ministry of economy or the FCA’s general rapporteur and authorised by judges, these officials may conduct inspections at any premises, seize documents and any information medium and place any commercial premises, documents and information media under seal for the duration of the inspection of those premises.

It should be noted that the French Ministry of economy has the power to issue injunctions and to offer settlement when the abusive practices only affect a local market and do not concern facts covered by article 102 of the TFEU, on condition that the turnover generated in France by each of the undertakings concerned during the last financial year does not exceed €50 million and that their aggregate turnover does not exceed €200 million.

Moreover, the French commercial, civil and administrative courts are responsible for the private enforcement of the dominance rules (see questions 31 and 32) and the criminal courts also have jurisdiction to impose criminal sanctions to individuals (see question 27).

What sanctions and remedies may the authorities impose? May individuals be fined or sanctioned?

The FCA is notably empowered to:

• order the dominant undertaking to cease its abusive practices within a specified period of time;
• impose special conditions and enjoin the undertakings involved to amend, supplement or cancel, within a specified period, all agreements and all acts by which the concentration of economic power allowing the abuse of dominant position has been carried out or, if the dominant undertaking operates retail outlets, require that it should proceed with divestment of assets;
• accept the dominant undertaking’s behavioural or structural remedies to end the competition concerns; and
• impose a financial penalty (either immediately or in the event of non-compliance with the conditions imposed or the remedies accepted).

The maximum amount of the financial penalty that may be imposed is:

• for a company: 10 per cent of the highest worldwide turnover, net of tax, achieved in one of the financial years ended after the financial year preceding that in which the practices were implemented (if the accounts have been consolidated or combined, the turnover taken into account is that shown in the consolidated or combined accounts); and
• for other entities: €3 million.

The financial penalties shall be proportionate to the seriousness of the abuse, the damage to the economy, the situation of the dominant undertaking and the possible repetition of the practices.

The dominant undertaking has the possibility to propose commitments that will be made binding by the FCA if they are likely to put an end to its competition concerns. Moreover, when the dominant undertaking does not contest the allegations made against it in the statement of objections, the general rapporteur of the FCA may submit a settlement offer fixing the minimum and the maximum amounts of the contemplated financial penalty. If the dominant undertaking agrees to modify its conduct in the future, the general rapporteur may take this commitment into account in its settlement submission.

The highest fine ever imposed for an abuse of dominance was the €350 million fine pronounced by the FCA in 2015 against Orange, a French telecommunications group, in particular for putting into place fidelity rebate schemes in the electronic communications sector (decision No. 15-D-20 of 17 December 2015).

Besides the financial penalty, a natural person who has fraudulently taken a personal and decisive part in the design, organisation or implementation of abusive practices may be punished by a prison sentence of four years and a fine of €75,000 (article L420-6 of the FCC).

Can the competition enforcers impose sanctions directly or must they petition a court or other authority?

The FCA is empowered to impose sanctions directly to the abusive undertakings without petitioning a court or another authority (article L464-2 of the FCC).

What is the recent enforcement record in your jurisdiction?

The FCA issues several decisions each year relating to abusive practices. The processing of a case by the FCA takes on average 18 months after the lodging date of the complaint, but abuse of dominance cases may take longer.

The abuses that have been most commonly prosecuted in recent years are exclusionary practices such as predatory pricing, rebates schemes, refusals to deal and denied access to essential facilities, defamation and discrimination.

Where a clause in a contract involving a dominant company is inconsistent with the legislation, is the clause (or the entire contract) invalidated?

Any agreement or contractual clause referring to a practice prohibited by article L420-2 is invalid (article L420-3 of the FCC). This nullity may be declared by the courts having jurisdiction.

To what extent is private enforcement possible? Does the legislation provide a basis for a court or other authority to order a dominant firm to grant access, supply goods or services, conclude a contract or invalidate a provision or contract?

French law does not provide a basis for a court or other authority (except the FCA, see question 27) to order a dominant firm to grant access, supply goods or services or conclude a contract, but private enforcement is possible before French courts having jurisdiction in order to obtain compensation from the dominant undertaking or the invalidity of an agreement or contractual clause referring to a practice prohibited by article L420-2.

The plaintiff can bring either a follow-on or stand-alone action (depending on whether the alleged abuse has already been the subject of an infringement decision of the FCA or not).

To date, there have only been a few cases of actions for damages brought before French courts for abuses of dominance, but the number of private enforcement actions is expected to increase in the future with the transposition into French law in March 2017 of Directive 2014/104 of 26 November 2014 on antitrust damages actions aiming at removing practical obstacles to compensation for victims of infringements of antitrust law.

For example, in 2012, the Paris Court of Appeal found that the dominant telecommunications group France Telecom had abusively restricted market access possibilities and therefore granted a €7 million compensation to one of its potential alternative competitors for loss of chance (judgment of 11 December 2012 No. 11/03000).

In 2018, the Paris Court of Appeal also confirmed the judgment of the Paris Commercial Court, which had sentenced Orange to pay SFR damages amounting to approximately €50 million for the loss of revenue because of Orange’s abusive price squeeze practice (judgment of 8 June 2018 No. 16/19147).

Moreover, a system of class action has been introduced in French law in 2014, but its scope of application is restricted to consumers (article L623-1 of the FCC).

Do companies harmed by abusive practices have a claim for damages? Who adjudicates claims and how are damages calculated or assessed?

Companies harmed by abusive practices have a claim for damages before the national civil and commercial courts having jurisdiction on the basis of French tort law, which requires the demonstration of a fault, a damage and a causal link between them.

New article L481-2 of the FCC provides that an anticompetitive practice is presumed to be irrebuttably established once its existence and imputation have been established by a decision of the FCA that can no longer be subjected to ordinary review for the part relating to this finding.

According to new article L481-3, the harm suffered by the claimant includes in particular the loss incurred (due notably to the surcharge paid), the loss of profits, the loss of opportunity and the moral damage.

Damages are assessed by the judge on a case-by-case analysis, on the day of the decision, taking into account the evolution of the prejudice (new article L481-8).

To what court may authority decisions finding an abuse be appealed?

The FCA’s decisions finding an abuse may be appealed to the Paris Court of Appeal, which has sole jurisdiction in this matter, in order to obtain either the annulment of the decision or its reformation.

If the Paris Court of Appeal annuls the FCA’s decision without annulling the prior proceedings, the court is required to review both the facts and the law. By contrast, if the court annuls the decision for insufficient investigation, the case may be referred to the FCA for additional investigations.