Complaints procedure for private parties

Is there a procedure whereby private parties can complain to the authority responsible for antitrust enforcement about alleged unlawful vertical restraints?

Private parties such as companies or consumer associations can lodge a complaint with the Competition Authority. A consumer alone cannot bring such a complaint.

The complaint must mention the French law and, if applicable, EU law provisions that are allegedly violated, the description of the infringement and the complete identification of the complainant. The complaint must also indicate, if possible, the identity and address of the entity responsible for the alleged infringement. It is not necessary for a complainant to bring all evidence, but concrete elements establishing the likelihood of such infringement must be brought.

The Competition Authority may adopt injunction measures and sanctions, accept commitments by the parties and agree to a settlement. It can also declare the complaint inadmissible for lack of standing or reject it for insufficient evidence.

It may take several years to obtain a decision of sanction from the Competition Authority.

If the complainant demonstrates a serious and immediate threat to competition, urgent interim measures may be ordered by the Competition Authority. The Competition Authority ordered as an interim measure the suspension of the agreement granting Canal Plus the exclusive broadcasting rights for the French rugby first division championship for five years (Decision No. 14-MC-01).

Regulatory enforcement

How frequently is antitrust law applied to vertical restraints by the authority responsible for antitrust enforcement? What are the main enforcement priorities regarding vertical restraints?

In the past two years, the Competition Authority has ruled on 70 decisions on anticompetitive practices, seven of which relate to vertical agreements.

What are the consequences of an infringement of antitrust law for the validity or enforceability of a contract containing prohibited vertical restraints?

Under article L420-3 of the French Commercial Code, any clause or agreement that relates to an anticompetitive practice is null and void. The judge may pronounce a partial invalidity of an agreement and only the restrictive contractual provisions are null and void and the rest of the contract or agreement remains valid, unless the clause containing illegal restriction is a determining and critical condition of the contract.

May the authority responsible for antitrust enforcement directly impose penalties or must it petition another entity? What sanctions and remedies can the authorities impose? What notable sanctions or remedies have been imposed? Can any trends be identified in this regard?

Under article L464-2 of the French Commercial Code, according to the Guidelines issued on 16 May 2011, the Competition Authority may impose fines either immediately or to sanction a violation of an injunction or a commitment. The fines cannot exceed 10 per cent of the company’s or the group’s worldwide turnover.

The authority may impose a daily fine of up to 5 per cent of the company’s average daily turnover to compel it to implement an injunction or interim measures.

In its annual report for 2018, the Competition Authority announced a total annual amount of fines of €237.5 million (while the average yearly amount between 2009 and 2017 was €526 million, with a record amount of €1.25 billion in 2015). Significant fines were imposed in 2015 in the milk sector (€192.7 million, Decision No. 15-D-03) and in the parcel delivery services industry (€672.3 million, Decision No. 15-D-19), and in 2017 in the floor coverings sector (€302.3 million, Decision No. 17-D-20).

The Competition Authority has issued several decisions concerning interim measures requests, including three cases in connection with vertical restraints.

Investigative powers of the authority

What investigative powers does the authority responsible for antitrust enforcement have when enforcing the prohibition of vertical restraints?

Article L450-3 of the French Commercial Code provides for ordinary investigations that do not require any judicial authorisation. This article enables administrative agents to enter business premises and professional means of transport, to request the notification or make a copy of professional documents, to interview company’s employees and to collect oral or written statements.

The ‘judicial investigation’ set out in article L450-4 of the French Commercial Code is subject to a judge’s authorisation. Administrative agents can carry out dawn raids in any premises, request information, seize or copy any kind of document (eg, emails), place seals and take oral or written statements.

The Directorate-General for Competition, Consumer Protection And Repression Of Fraud may also investigate specific sectors on the basis of evidence or suspicion of restrictions to identify competition concerns after having alerted the Competition Authority, which can decide to take over investigations (article L450-5 of the French Commercial Code). At the end of the investigation, the Competition Authority decides whether to open a case.

As per newly introduced article L450-3-3, as a partial transposition of the ECN+ Directive (EU Directive No. 2019/1 of 11 December 2018), the Competition Authority has also an extended power to request the communication of detailed phone invoice.     

Private enforcement

To what extent is private enforcement possible? Can non-parties to agreements containing vertical restraints obtain declaratory judgments or injunctions and bring damages claims? Can the parties to agreements themselves bring damages claims? What remedies are available? How long should a company expect a private enforcement action to take?

Private enforcement actions are possible under French law, on the basis of article 1240 (formerly 1382) of the French Civil Code, before one of the specialised jurisdictions: article L420-7 of the French Commercial Code provides that specialised courts of first instance (eight commercial courts and eight civil courts) and the Paris Court of Appeal, under article R420-5, have exclusive jurisdiction in disputes relating to the application of antitrust laws (private enforcement).

The person seeking compensation must bring evidence of a fault and of the harm personally suffered. New rules on damages claims relating to infringements of competition law set forth in article L481-1 et seq of the Code of Commerce, implementing EU Directive 2014/104, entered into force on 11 March 2017 and are applicable to proceedings initiated after 26 December 2014. The new provisions provide, in particular, for an irrefragable presumption of an infringement based on decisions of the Competition Authority or the European Commission and establish a principle of joint and several liability of all the parties to the agreement.

A party to an agreement containing vertical restraints can bring an action for compensation, provided that the claimant proves it was not responsible for the infringement and was forced to take part in the agreement (Paris Court of Appeal, No. 07/05460).

Since the introduction of the Law of 17 March 2014, certified consumer protection associations are allowed to bring follow-on collective actions in front of a court of first instance in order to obtain compensation for harm caused by antitrust practices. Collective actions are only open to consumer associations as opposed to business and professional associations.

Private enforcement action can take several years and may be suspended until a final decision is reached in the competition infringement case.