The Paris Court of Appeal recently annulled a decision of the French Competition Authority (“FCA”) on the grounds that the procedure took too long. The original decision was issued by the FCA on March 2006, finding that the main manufacturers and brand owners of perfumes and cosmetics in France were guilty of price fixing.

This is the first time that the Paris Court of Appeal (which has exclusive jurisdiction to hear appeals lodged against the FCA) has accepted arguments put forward by a party as to the impact that the duration of the procedure can have on the exercise of its rights of defence.

The Court ruled that the parties' rights of defence had been breached on the following grounds: the secret nature of the investigation; the 6 year duration of the first administrative part of the investigation; the gross disproportion between the time the investigators allowed themselves (6 years) and the time given to parties to respond to the statement of objections (10 months); and the fact that the infringement decision was essentially based on price information collected from retailers shops for statistical purposes, which was deemed to be incomplete and not objectively collected.

The Court considered that the duration of the preliminary administrative investigation, and the fact that it was run in secret, did not allow the companies involved to anticipate the objections against them and prepare their defence accordingly. The Court concluded that in so doing, the FCA had irreparably breached the companies' rights of defence.