Legislation and jurisdiction
Development of antitrust litigation
How would you summarise the development of private antitrust litigation in your jurisdiction?
Private antitrust litigation is primarily based on civil liability provisions of the French Civil Code (see article 1240 for tortious liability and articles 1231 and seq for contractual liability). Since the enactment of competition law rules, victims of competition law infringements have therefore been able to claim compensation for the harm suffered on that basis. However, it is only recently that private enforcement actions have really started to multiply, with a greater number of cases being presented before both commercial and administrative courts. A growing interest and awareness of victims of competition law infringements has indeed been observed since the European Commission took the initiative to define a global statutory framework on the basis of the principles previously set by the European Court of Justice (see landmark cases Courage, Manfredi and Pfleiderer), which ultimately led to the adoption of Directive 2014/104/EU (Damages Directive). This Directive was implemented last year with the adoption of Ordinance Law No. 2017-303 of 9 March 2017 (Ordinance) and its implementing Decree (Decree) modifying the French Commercial Code (FCC).
The Ordinance introduced important presumptions that all aim to facilitate private antitrust litigation by reducing the victims’ burden of proof. The most significant ones concern the establishment of the wrongdoing, the causal link between such wrongdoing and the existence of a damage, and the passing-on defence. Access to evidence is also facilitated.
Additional guidance was provided by the Ministry of Justice, which adopted a soft law instrument to assist victims and the courts (‘Circulaire’ of 23 March 2017). The Paris Court of Appeal also issued a set of guidelines focusing on the assessment of economic damages (‘Fiches méthodologiques’, 19 October 2017).
Follow-on actions are therefore likely to increase in the near future. Victims of competition law infringements also have the possibility to bring stand-alone actions (ie, actions that are not based on a previous finding of infringement by a competition authority). In such a case, it is for the victim to prove the alleged infringement of competition law as well as the harm suffered and the causal link between the two. That being said, although the provisions of the Damages Directive and the implementing legislation in France seem to be construed for follow-on actions, they apply to all types of private antitrust litigation, including individual actions (either follow-on or stand-alone) and collective actions.
Finally, in respect of collective actions, the Hamon Law of 17 March 2014 introduced a French style ‘class action’ that now coexists with the unsuccessful representative collective action (articles L 622-1 et seq of the Frence Consumer Code). The French style class action is an opt-in regime that enables a group of consumers represented by duly authorised associations to claim damages for the harm resulting from infringements of various legal rules by professionals, including competition law. To date, however, among the very few collective actions lodged (about 11), none of them have yet concerned competition law infringements.
Are private antitrust actions mandated by statute? If not, on what basis are they possible? Is standing to bring a claim limited to those directly affected or may indirect purchasers bring claims?
Private antitrust actions are based on general tort or contractual law provisions (article 1240 or articles 1231 and seq of the French Civil Code respectively). Under the general tort law regime, infringements of competition law constitute a wrongdoing that entitles any victim (direct or indirect) to claim damages for the harm suffered. In addition to civil provisions, private antitrust actions are now dealt with in articles L 481-1 and seq of the FCC, which set the general framework for the conduct of private antitrust proceedings before French courts.
To bring a claim, standing must be shown, by demonstrating a personal, real and legitimate harm.
If based on statute, what is the relevant legislation and which are the relevant courts and tribunals?
Other than general civil liability rules, the legislative framework for private antitrust enforcement has been recently modified with the adoption of the Ordinance and its implementing Decree which came into force on 11 March 2017. Relevant provisions on actions for damages are now codified in section VIII of Book IV of the FCC (articles L 481-1 et seq).
Neither the Ordinance nor the Decree modify the applicable provisions relating to courts’ jurisdiction in private antitrust actions.
There are in total 16 specialised courts (eight civil lower courts and eight commercial courts (articles R 420-3 and R 420-4 of the FCC)) competent to deal with private antitrust actions. Civil courts have jurisdiction in matters between private litigants, whereas commercial courts have jurisdiction in matters between commercial parties. In practice, private antitrust actions are mostly (if not exclusively) brought before commercial courts because the parties are generally companies. All rulings from the lower courts may be appealed to the Paris Court of Appeal (article L 420-7 of the FCC and R 420-5 of the FCC) and subsequently to the Supreme Court (see question 18).
In addition, if a public entity or person is either the author or the victim of the anticompetitive practice, administrative courts have jurisdiction.
In what types of antitrust matters are private actions available? Is a finding of infringement by a competition authority required to initiate a private antitrust action in your jurisdiction? What is the effect of a finding of infringement by a competition authority on national courts?
Private actions are not limited to cartel cases and can be based on any violation of competition law provisions (article L 481-1 of the FCC). This includes notably violations of articles L 420-1 and L 420-2 of the FCC as well as articles 101 and 102 of the Treaty on the Functioning of the European Union, which prohibit, in similar terms, anticompetitive agreements and abuses of a dominant position. Private actions are also available in respect of specific infringements of competition law under French law, such as abuses of economic dependence or the practice consisting in selling goods at loss. A damages claim can also be brought as a result of contractual provisions infringing competition law.
A finding of infringement by a competition authority is not required to bring a claim for damages; stand-alone actions are possible. However, a previous finding of infringement by a competition authority facilitates the victims’ burden of proof. In particular, an infringement of competition law established by a decision of the French Competition Authority (FCA) or the European Commission is deemed to be irrefutably established for the purposes of a damages claim. Article L 481-2 of the FCC further specifies that a decision of the FCA is considered final when the facts constituting the infringement can no longer be appealed through ordinary means (which notably excludes appeals before the Supreme Court). In practice, this means that fining decisions of the FCA become final for leniency applicants and settling parties, since the facts cannot be challenged anymore by these parties. However, for the other parties that did not benefit from leniency and decided to challenge the FCA’s objections, it will generally only become final after the Paris Court of Appeal has issued its judgment.
Other types of decisions, including notably decisions of other EU member states’ competition authorities, finding an infringement will only constitute prima facie evidence. The Paris Court of First Instance also recently ruled in a case concerning an abuse of dominance by the incumbent operator in horserace betting (PMU) that a commitment decision of the FCA also constitutes prima facie evidence of an infringement (judgment of 22 February 2018).
What nexus with the jurisdiction is required to found a private action? To what extent can the parties influence in which jurisdiction a claim will be heard?
French courts have jurisdiction over any private antitrust action, either because it is directed against a defendant whose residence or place of business is in France, or because the anticompetitive practice took place in France or the damage was suffered in France.
If the victim or author of the infringement is a public entity or person, the court that has jurisdiction will be a court pertaining to the administrative order; otherwise, the antitrust damages claim may be brought before one of the 16 specialised civil or commercial jurisdictions (see question 3). If there are many defendants, the plaintiff will have a choice of jurisdiction.
Last, in contractual relationships, parties may insert a jurisdiction clause. Subject to the wording of such a clause, this may cover, in addition to disputes directly related to the contract, cases of tortious liability such as in the case of a competition law infringement.
Can private actions be brought against both corporations and individuals, including those from other jurisdictions?
Private actions can be brought against both corporations and individuals (including those from other jurisdictions). However, actions against individuals are pretty rare, if not non-existent, because:
- liability of individuals for competition law infringements (L 420-6 of the FCC) has been rarely recognised (mostly as a result of their active participation in bid-rigging practices); and
- even if so, the victim’s interest is generally to seek compensation from the company directly rather than from the individual, for obvious solvability reasons.
Private action procedure
May litigation be funded by third parties? Are contingency fees available?
Third-party funding is possible under French law and is currently developing. By way of example, Alter Litigation is an organisation notable for offering funding solutions for cartel victims. However, there is no specific legal framework in place. Moreover, although more attractive, third-party funding, however, remains rather uncommon because litigants generally use their own resources (legal expenses insurance or legal aid can also be available).
Contingency fees are prohibited in principle. However, these can be admitted subject to being determined in advance and in writing between the client and his or her lawyer and provided that the lawyer’s fees are only partially contingent upon the outcome of the case.
Are jury trials available?
Not applicable for private antitrust actions.
What pretrial discovery procedures are available?
Each party is required to bring the necessary evidence to the success of its claim (article 9 of the French Code of Civil Procedure (FCCP)). Therefore, parties are required to disclose the documents they rely on and no general discovery procedure (eg, similar to that in the United States) is available. However, in the course of proceedings, a party may ask the court to order other parties or a third party to disclose any document necessary to prove the alleged facts (article 11 of the FCCP). Additionally, the judge may order any measures of inquiry deemed necessary if they consider it lacks sufficient elements to rule on a case (eg, auditions or appointment of an expert) (article 10 of the FCCP).
The Ordinance introduced new rules granting the victim of a competition law infringement the possibility to request disclosure of relevant categories of evidence (article L 483-1 of the FCC), provided the plaintiff establishes a plausible harm resulting from an anticompetitive practice (which will generally be the case in follow-on actions). These categories must be identified as precisely and narrowly as possible. However, certain safeguards exist in order to avoid ‘fishing expeditions’. Therefore, courts will conduct a proportionality assessment to determine whether the evidence requested is indeed necessary for the victim to prove the damage suffered and ought to be disclosed.
The main exception to disclosure concerns business secrets, privileged documents and certain categories of evidence submitted or held by the FCA (most notably, self-incriminating statements submitted in support of leniency or settlement applications which are excluded from disclosure).
Fines of up to €10,000 may be imposed in case of failure or refusal to comply with the court’s order of disclosure or if the evidence is destroyed (article R 483-14 of the FCC).
Finally, concerning documents held by third parties (other than the competition authority), there are no principles of pretrial discovery procedure. However, article 145 of the FCCP allows the court to order investigatory measures to establish the existence of such evidence or preserve evidence that is the basis of the claim. The plaintiff must substantiate a legitimate reason to request such investigative measures.
What evidence is admissible?
Any type of evidence is admissible to prove a fact, unless the law provides otherwise (article 1358 of the French Civil Code). Before the commercial courts, where most private antitrust actions are lodged, any evidence is admissible under the principle of freedom of evidence (article L 110-3 of the FCC). The court has the discretion to weigh the importance of the evidence submitted.
Legal privilege protection
What evidence is protected by legal privilege?
Attorney-client privilege is provided by Law No. 71-1130 of 31 December 1971. Legal privilege covers any attorney-client communication (eg, consultations, work products related to the client’s defence, etc). However, in-house counsel does not benefit from legal privilege. Any legally privileged communication is excluded from disclosure.
Self-incriminating statements submitted in support of leniency or settlement applications are also protected from disclosure (article L 483-5 of the FCC) (see question 9).
Business secrets may be exempt from disclosure insofar as they can constitute confidential information (articles L 483-2 et seq of the FCC). However, it is for the judge to assess whether a request for confidentiality is legitimate. At his or her own discretion, the judge may either refuse or accept the confidentiality claim. In the latter case, the judge also has the possibility to strike a balance of interests between both parties by allowing the production of a redacted version or allowing full disclosure to a limited group of persons such as economic experts or lawyers.
Are private actions available where there has been a criminal conviction in respect of the same matter?
Private actions are available when there has been a criminal conviction. Criminal courts may rule on civil claims arising in criminal proceedings. However, criminal convictions for competition law infringements, although possible in theory if certain conditions are met, are rare in practice.
Utilising of criminal evidence
Can the evidence or findings in criminal proceedings be relied on by plaintiffs in parallel private actions? Are leniency applicants protected from follow-on litigation? Do the competition authorities routinely disclose documents obtained in their investigations to private claimants?
Evidence in criminal proceedings is confidential and may not be relied upon by plaintiffs until the criminal procedure is closed. However, in practice, criminal liability is rare for competition law infringements (see question 12).
Leniency applicants are not protected against private actions. However, in order to strike a balance between the victims’ interests in access to evidence and the need to safeguard leniency procedures as a tool for public enforcement, leniency statements cannot be disclosed (the same applies for settlement submissions) (article L 483-5 of the FCC).
Other documents contained in the FCA’s file may be accessible at the plaintiff’s request provided the FCA proceedings have ended (article L 483-8 of the FCC). Such documents may include reports prepared during the investigation or documents prepared by the parties involved in the proceedings before the FCA.
Stay of proceedings
In which circumstances can a defendant petition the court for a stay of proceedings in a private antitrust action?
Parties may submit a request to the court for a stay of proceedings (articles 108 and 378 et seq of the FCCP). Generally, the court will only grant a stay of proceedings in the interest of the proper administration of justice.
In follow-on actions, the courts may be inclined to grant a stay of proceedings when the FCA’s decision is being challenged before the Paris Court of Appeal, up until a ‘final decision’ has been adopted within the meaning of article L 481-2 of the FCC (see question 4).
In stand-alone actions, the courts may be inclined to grant a stay of proceedings when an investigation by a competition authority is pending. A court may also stay proceedings in the particular case in which it has requested the FCA’s opinion in respect of an anticompetitive practice (article L 462-3 of the FCC). The court is, however, not bound by such opinion.
Standard of proof
What is the applicable standard of proof for claimants? Is passing on a matter for the claimant or defendant to prove? What is the applicable standard of proof?
A party who claims damages in a civil action has the burden of proving that the following cumulative conditions are fulfilled: the existence of a harm (an infringement of competition law), a damage and the causal link between the two (articles 1240 et seq of the French Civil Code and article 9 of the FCCP). However, under the provisions of the Ordinance, several legal presumptions now apply to facilitate the victim’s burden of proof and, overall, its compensation.
As to the existence of a ‘fault’ or wrongdoing giving rise to liability, the Ordinance specifies the evidentiary value of competition authorities’ decisions (eg, FCA’s final infringement decisions have a binding effect on the courts) (see question 4).
Regarding the existence of a damage, the Ordinance has also introduced presumptions facilitating the victim’s burden of proving the harm suffered. Victims notably benefit from a rebuttable presumption that cartel infringements cause harm (article L 481-7 of the FCC).
Moreover, victims benefit from presumptions in respect of the passing on of overcharge. Although the passing on defence has always been available to defendants under French law, the new provisions shift the burden of proof from the plaintiff to the defendant (article L 481-4 of the FCC). Concerning direct purchasers, the defendant must now demonstrate the passing-on of the overcharge, whereas in the case of indirect purchasers, it has to demonstrate the absence of passing on by the direct purchaser. The passing-on issue is discussed in detail in question 35.
Pursuant to the Ordinance, these presumptions are, however, only applicable to actions for damages as a result of infringements of competition rules arising after the entry into force of the Ordinance, that is, from 11 March 2017 onwards. As a consequence, for the time being, given the length of antitrust proceedings before competition authorities, most private antitrust actions shall remain subject to the previous regime. That being said, French courts already applied certain presumptions, such as the one on the evidentiary value of a decision of the FCA. More questions arise in respect of presumptions which change the current state of law, such as the presumption on passing on (see question 35 and Update and trends).
What is the typical timetable for collective and single party proceedings? Is it possible to accelerate proceedings?
Overall, it is difficult to provide a typical timetable for private antitrust proceedings as the duration of proceedings largely depend on the complexity of cases, the number of parties involved, the involvement of experts, the workload of courts and issues relating to access to evidence.
Regarding private actions, recent case law shows that first instance decisions are generally issued between one to two years after the initiation of proceedings, depending notably on the number of parties involved. Appeal proceedings can take roughly the same time.
Regarding collective actions, in some recent cases, the issuance of a judgment establishing liability took more than one year. For example, in the collective action filed in September 2016 by the association UFC Que Choisir against BNP Paribas for misleading commercial practices in respect of the sale of an investment product, the first instance judgment was issued a little over a year later, in December 2017. An appeal is pending.
The proceedings may not be accelerated but the parties can request interim measures (see question 28).
What are the relevant limitation periods?
The limitation period is five years for both stand-alone and follow-on actions in private antitrust litigation (article 2224 of the French Civil Code and article L 482-1 of the FCC).
The limitation period starts to run on the date the plaintiff becomes aware or should have become aware of, cumulatively:
- the existence of an infringement;
- the fact that such infringement caused him or her harm; and
- the identity of at least one infringing party.
Moreover, the limitation period does not start to run as long as the anticompetitive practice has not ceased.
The opening of proceedings before a competition authority interrupts the limitation period until the issuance of a final decision from the relevant competition authority (or, in the event of an appeal, from the relevant jurisdiction) (article L 462-7 of the FCC) (see question 4).
What appeals are available? Is appeal available on the facts or on the law?
With respect to individual actions, appeals before the Paris Court of Appeal are available against first instance judgments issued by either the competent commercial or civil courts within one month following the date on which the judgment was notified to the parties. If the first instance judgment was issued by an administrative court, an appeal must be brought before the administrative court of appeal which has territorial jurisdiction, within two months following the date on which the decision was notified to the parties. On appeal, first instance judgments can be challenged both on grounds of facts or law.
Decisions issued by the Paris Court of Appeal or, as the case may be, an administrative court of appeal, may be challenged on grounds of errors of law before the highest appellate courts, either the French Supreme Court (Cour de Cassation) in civil law matters or the French Administrative Supreme Court (Conseil d’Etat) in administrative law matters, within two months following the date on which the appeal decision was notified to the parties.
Are collective proceedings available in respect of antitrust claims?
The Hamon Law introduced in 2014 a specific collective action relating to competition and consumer law infringements (articles L 623-1 et seq of the French Consumer Code) allowing approved consumers’ associations (15 in total) to initiate proceedings to compensate the individual harm caused to consumers by infringements of competition law. All collective actions are follow-on claims (article L 623-24 of the French Consumer Code).
The procedure is twofold:
- the judge will first establish the professional(s)’ liability, define the group of the consumers concerned and determine the type of harm that may be compensated as well as either the amount of damages to be awarded (in case of a simplified procedure) or the elements on the basis of which the amount to be awarded to each consumer should be determined (articles L 623-4 et seq of the French Consumer Code); and
- once a declaratory ruling on liability has been issued, any consumer in an identical or similar situation may join the group, on an opt-in basis, within a two- to six-month period in order to obtain compensation.
A simplified procedure has also been established when the identity and the number of consumers is accurately known, and when victims have each suffered damages of the same amount. The court may order the defendant to directly compensate these victims within a specified timeframe and on specific terms determined by the court. Prior to the execution of the judicial order, victims are informed individually and must accept the terms defined by the court in order to be compensated.
The limitation period to bring collective actions is the same as for individual private claims, that is, five years (see question 17). The period starts to run from the date of issuance of a final decision by a national or European competition authority or a court establishing an infringement of competition rules (article L 623-25 of the French Consumer Code).
Aside from this type of collective action, there is the joint representative action (articles L 622-1 et seq of the French Consumer Code), which has, however, only rarely been used and is now of lesser interest since a more effective collective redress mechanism has been introduced.
Are collective proceedings mandated by legislation?
Collective actions as instituted by the Hamon Law are governed by L 623-1 et seq of the French Consumer Code. Similar to other damages actions, collective actions follow general rules on civil liability, therefore the relevant provisions governing competition law infringements can also be invoked (see ‘Circulaire’ of 2017).
If collective proceedings are allowed, is there a certification process? What is the test?
There is no certification test, only approved consumer associations can initiate collective actions (15 in total). There is a diverse range of consumer associations that can be categorised according to the main interest pursued:
- defending workers’ interests;
- family interests; and
- specific consumer interests.
One of the most important associations representing consumers’ interests is UFC Que Choisir.
Have courts certified collective proceedings in antitrust matters?
Not applicable (see question 21).
Opting in/ out
Can plaintiffs opt out or opt in?
The French Consumer Code provides for an ‘opt-in’ system. In its judgment establishing the professional’s liability, the court also defines the group entitled to compensation and the criteria for joining the group (see question 19).
Do collective settlements require judicial authorisation?
Only approved associations under the Hamon Law can negotiate and settle the dispute with the defendant(s). Such a settlement requires the court’s prior approval. The court will determine whether the agreement reached is in accordance with the victims’ interests and will make the agreement enforceable (articles L 623-22 and L 623-23 of the French Consumer Code).
National collective proceedings
If the country is divided into multiple jurisdictions, is a national collective proceeding possible? Can private actions be brought simultaneously in respect of the same matter in more than one jurisdiction?
France is not divided into multiple jurisdictions. Collective actions proceedings are brought before competent civil courts depending on the defendant’s place of residence (article R 623-2 of the French Consumer Code). If the defendant has no residence in France, the Paris Court of First Instance shall have jurisdiction.
Has a plaintiffs’ collective-proceeding bar developed?
Contrary to other jurisdictions (in particular the United States) collective actions are not yet widely spread (see question 7). In addition, lawyers cannot bring a collective action on behalf of a group of consumers. As a consequence, and in light of the limited success of collective action so far, it is unlikely, for the time being, that a plaintiff’s collective-proceeding bar will develop.
What forms of compensation are available and on what basis are they allowed?
According to general principles of civil liability, plaintiffs are entitled to seek full compensation for the damage suffered (article L 1240 of the French Civil Code).
Any victim that has suffered harm as a result of a competition law infringement is entitled to claim compensation for both its actual loss and the loss of profit, plus interest. In antitrust matters, under article L 481-3 of the FCC, compensation notably includes:
- the loss resulting from the overcharge (unless this one was passed-on to any downstream purchaser) or from a lower price paid by the infringer;
- the loss resulting notably from the decrease in sales volume linked to a partial or total passing-on of the overcharge;
- the loss of opportunity; and
- non-pecuniary harm.
In the case of collective actions, plaintiffs are only entitled to claim damages for material loss suffered as a result of the anticompetitive practice, to the exclusion of non-pecuniary loss (article L 623-2 of the French Consumer Code).
What other forms of remedy are available? What must a claimant prove to obtain an interim remedy?
The presidents of both civil and commercial courts can grant interim measures under certain circumstances. Such measures are notably available in any case of urgency provided that they cannot be seriously challenged or that they are justified by the dispute (article 808 of the FCCP). Interim measures can also be granted in order to avoid imminent harm to be caused or to stop a manifestly illicit nuisance (articles 809 et seq of the FCCP).
Are punitive or exemplary damages available?
On the basis of the principle that victims have a right to full compensation, damages are exclusively compensatory. No punitive nor exemplary damages are available.
Is there provision for interest on damages awards and from when does it accrue?
The payment of interest is an essential component of compensation.
First, compensatory interests are due to the victim as compensation for monetary erosion during the time it suffered a financial loss. The victim must prove that, had it not suffered a financial loss, the funds could have been used for another purpose. These interests accrue from the moment the damage arose until the judgment is adopted. However, in the Orange Caraïbes judgment of 10 May 2017, the Paris Court of Appeal considered that interests accrue until full payment of the amount corresponding to the interests due, that is after the judgment is issued. Depending on the circumstances, a legal interest rate may be applicable or a rate based on the weight average cost of capital.
Second, default interest is due to compensate the delay of any payment due.
These interests are automatically granted when damages are awarded in a judgment and are due from that day. Unless otherwise provided, such interests are due until the other party pays the ordered amount (articles 1231-6 and 1231-7 of the French Civil Code). These interests are calculated according to a legal rate, set by a decree each semester.
Consideration of fines
Are the fines imposed by competition authorities taken into account when setting damages?
Courts do not take into account the fines imposed by competition authorities when awarding damages to victims of competition law infringements because the goals pursued by public and private enforcement are radically different. Competition authorities punish the infringer for the overall damage to the economy whereas the courts’ objective is to compensate victims for the individual harm suffered.
Who bears the legal costs? Can legal costs be recovered, and if so, on what basis?
The losing party normally bears the costs of the proceedings which usually cover translation fees, witnesses, experts, etc (article 695 and 696 of the FCCP).
These costs, however, do not include lawyers’ fees but courts may order the losing party to bear all or part of these fees (article 700 of the FCCP). This amount, which is claimed by each party against the other, is determined by the judge taking into account the financial situation of the parties. In practice, the payment of costs by the opposing party under article 700 of the FCCP is almost always granted but is generally not substantial and considerably below the actual lawyers’ fees incurred.
Joint and several liability
Is liability imposed on a joint and several basis?
Joint and several liability is expressly provided for by the Ordinance. Accordingly, a victim can seek full compensation from any of the infringers, even if such an infringer only partially contributed to the harm suffered (article L 481-9 of the FCC).
Two exceptions are, however, provided, which concern respectively:
- leniency applicants (article L 481-11 of the FCC); and
- small and medium-sized enterprises (SMEs) (article L 481-10 of the FCC).
Leniency applicants will only be liable for the harm caused to their direct or indirect contracting parties. That being said, leniency applicants may still be liable to other victims if they are unable to obtain full compensation from the other infringers.
In the case of SMEs (as defined by article 51 of Law No. 2008-776 of 4 August 2008), they are jointly and severally liable to the extent that the claimant is one of their direct or indirect contracting parties. Therefore, the SME concerned will only be held liable to other victims in proportion to the SME’s respective contributory share and not for the full damage suffered, provided, however, that:
- the SME’s market share is below 5 per cent; and
- applying the principle of joint and several liability would jeopardise its economic viability.
In addition, such exception is not available to a SME that had a leading role in the anticompetitive practice or constrained other parties to participate to the infringement.
Contribution and indemnity
Is there a possibility for contribution and indemnity among defendants? How must such claims be asserted?
Co-infringers are held jointly and severally liable for the entire harm caused by the infringement (see question 33).
However, in case the amount paid to the victim exceeds its actual share, a co-infringer can file a separate action to obtain from the other co-infringers that they be held liable for the share of the damage they have caused, in proportion of the gravity of their faults and causal role in the damage (article L 481-9 of the FCC).
A specific situation applies in respect of leniency applicants as, by way of principle, their contribution cannot exceed the amount of the damage caused to their own direct or indirect contracting parties (article L 481-12 of the FCC), irrespective of their actual participation and role in the infringement.
Is the ‘passing on’ defence allowed?
Defendants in an action for damages are able to invoke as a defence against a claim for damages the fact that the plaintiff passed on, in whole or in part, the overcharge resulting from the infringement of competition law. Up until the adoption of the Ordinance, French courts considered that it was up to the plaintiff to prove the absence of passing-on of the overcharge (French Supreme Court, Le Gouessant, 15 May 2012).
Article L 481-4 of the FCC now establishes rebuttable presumptions regarding passing-on, with the burden of rebutting the presumption lying on defendants.
In case of direct purchasers, the presumption is now that they have not passed on the overcharge to their own customers. As a consequence, to reduce its liability, the defendant must prove the contrary.
Conversely, in the case of indirect purchasers, the law provides that they are deemed to have suffered from an overcharge that was passed-on by their supplier (article L 481-5 of the FCC). The defendant can, however, prove that the overcharge was not passed on to the indirect purchaser.
Pursuant to the Ordinance, these presumptions shall, however, only apply to actions for damages as a result of infringements arising after the entry into force of the Ordinance, that is, 11 March 2017. As a consequence, for the time being, it shall, in principle, still be for the victim to demonstrate the absence of passing-on in order to obtain compensation for the harm suffered (French Supreme Court, Le Gouessant, 2012). However, unless the courts decide to apply the presumption to current cases, in practice this means that a claimant will not be able to rely on such presumptions before many years, which in light of the main aim pursued by the Damages Directive, that is to facilitate obtaining compensation by victims of anticompetitive behaviour, raises a question of compliance of the French provisions with the EU principle of effectiveness. In that respect, it is interesting to note that a recent decision of the Paris Court of Appeal can be interpreted as having applied the presumption in a case where the facts occurred in the 1980s and were sanctioned by the European Commission long before the adoption of the Damages Directive (Paris Court of Appeal, JCB Services, 20 September 2017) (see also Update and trends).
Do any other defences exist that permit companies or individuals to defend themselves against competition law liability?
Defendants may challenge the criteria required for the plaintiff to prove tortious liability. Therefore, defendants can invoke the absence of wrongdoing, damage or even the causal link required between the two. As these are cumulative requirements, proving the absence of one is sufficient for dismissal of a claim.
Alternative dispute resolution
Is alternative dispute resolution available?
Alternative dispute resolution mechanisms are available. Parties can notably resort to arbitration or mediation to obtain compensation for the harm suffered as a result of competition law infringements. According to the Damages Directive, such mechanisms are complementary to actions for damages (recital 5).
The Ordinance indirectly encourages settlements between the parties. Indeed, article L 481-13 of the FCC provides that, in case one party settles with the victim, its co-infringers cannot claim contribution from that party, therefore protecting its interests. Moreover, it can be of particular interest for defendants to engage in discrete settlements in the hope to avoid a public judgment and potential claims from other victims.
In collective proceedings, mediation is also available. To be enforceable, any settlement reached by the authorised association must receive prior judicial approval (articles L 623-22 et seq of the French Consumer Code).
UPDATES & TRENDS
Updates & Trends
Updates and trends
Within the European Union, contrary to other jurisdictions such as the United Kingdom or the Netherlands, France was not traditionally considered as an attractive forum for private antitrust litigation.
However, the Ordinance and the Decree have established a comprehensive regime that will most likely increase France’s attractiveness for private antitrust actions. It remains to be seen how the courts will interpret and implement the new provisions; in particular, the several presumptions adopted and whether these will be applied to infringements preceding the adoption of the Ordinance.
Indeed, one hot topic concerns the entry into force of the presumptions facilitating private actions. Under the new regime, these presumptions should only be applicable to actions for damages resulting from infringements arising after the entry into force of the Ordinance. However, in practice, this means that victims wishing to obtain compensation for the harm suffered will not be able to benefit from these provisions in case their harm was suffered before the entry into force of the Ordinance, which given the length of antitrust proceedings, is the case of most victims at present and will continue to be for several years. Such an approach is questionable because it may be regarded as contrary to the principle of the effectiveness of EU law.
Other key aspects include the calculation of damages. Indeed, it is very complicated to precisely estimate the harm suffered as a result of a competition law infringement and courts will be confronted and entrusted with the difficult task to award damages reflecting a full compensation for the victim in light of all the relevant circumstances of each case. In that respect, the French courts will certainly benefit from the additional guidance the European Commission is yet to issue in respect of how to estimate passing-on of overcharges.