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Trends and climate

Trends

Have there been any recent changes to the cartel regime? If so, have they had a significant impact on enforcement activity?

The cartel regime has not been modified recently. However, in March 2017 Ordinance 2017-303 entered into force, transposing the EU Cartel Damages Directive (2014/104/EC) into national law. The ordinance aims to help victims of anti-competitive practices to obtain compensation. As a result, the presumption regime has been modified and the process for accessing documents has been simplified.

This ordinance will have a significant impact on private enforcement activity in France. 

Are there any proposals to reform or amend the existing cartel regime?

At present, there are no proposals aimed at reforming or amending the French cartel regime.

Have there been any recent key cases?

Most significant cases involve confirmation of the fines imposed by the French Competition Authority (FCA) by the Paris Court of Appeal. One such example involved a cartel in the fresh dairy products sector. The FCA had imposed a €192.7 million fine following an anti-competitive agreement regarding dairy products sold under the retailers' own-brand labels (15-D-03, March 11 2015). The Court of Appeal reduced the fine to €130 million (CA Paris, May 23 2017).

The FCA actively investigates and adjudicates cartel cases. While the level of fine that it imposes is high, it is essentially in line with the European Commission’s fining policy, although in France the cartel’s duration has a lesser influence on the final fine.

Legal framework

Legislation

Which legislation applies to cartels and what are the relevant substantive provisions?

French and EU rules apply to cartels in France.

Article L420-1 of the Commercial Code states that:

Joint actions, agreements, express or tacit agreements or coalitions are prohibited, even through the direct or indirect agency of a company belonging to a group established out of France, if they have the purpose or may have the effect of barring, restricting or distorting the play of competition in a market, particularly when they aim at:

1° - Limiting other companies’ access to the market or free exercise of competition by other companies;

2° - Hindering the free setting of prices by artificially controlling their increase or decrease;

3° - Limiting or controlling output, outlets, investments or technological progress;

4° - Sharing out the markets or sources of supply.”

The French regime also covers criminal liability (Article L420-6 of the Commercial Code).

In addition, the French Competition Authority (FCA) enforces Article 101 of the Treaty on the Functioning of the European Union (TFEU).

Procedural rules to be followed by the FCA are set out in Articles L450-2 to L470-2 of the Commercial Code. They are applicable not only when the FCA is operating under Article L420-1 of the Commercial Code, but also when it is operating under Article 101 of the TFEU.

Institutions

Which bodies are the relevant regulatory and prosecutory authorities and what are their specific roles?

The FCA is responsible for upholding fair market competition. This includes investigating, accusing and fining undertakings engaged in cartels. However, fines are decided by a panel that is independent from the FCA’s investigative and accusatory service.

Agents of the General Directorate of Competition, Consumption and Fraud Repression (DGCCRF) also have investigative powers in this regard. In addition:

  • The Ministry of Economy has enforcement powers with regard to small-scale local cartel cases; and
  • public prosecutors can prosecute private individuals involved in cartel enforcement before the criminal courts, although such cases are extremely rare.

Are there any sectoral regulators with concurrent powers?

Sectoral regulators have no concurrent powers.

Application

Does the legislation apply to both formal agreements and informal practices?

The legislation applies to both formal and informal agreements (ie, concerted practices).

Does the legislation apply to individuals, companies or both?

The legislation applies to companies, including individual companies. Private individuals are subject to the cartel regime only if they can be deemed an individual company. Other individuals (eg, employees) can be prosecuted before the criminal courts if they have played a determining role in the implementation of the practice, but this is extremely rare.

Does the legislation subject companies to civil liability, criminal liability or both?

The French cartel regime subjects companies to administrative penalties imposed by the FCA.

In addition, cartel victims can seek civil compensation before the civil courts in distinct proceedings.

Does the legislation subject individuals to civil liability, criminal liability or both?

Private individuals (when they cannot be deemed individual companies) are subject to criminal liability in accordance with Article L420-6 of the Commercial Code.

Where cartel conduct is punishable by both civil and criminal penalties, can the enforcement authority pursue both types of penalty? How does the authority decide which penalties to seek?

The FCA enforces administrative penalties, whereas victims bring civil claims before the national civil or commercial courts. Public prosecutors enforce criminal penalties imposed on individuals before the criminal courts on receiving information from the FCA.

The FCA can decide whether to open an investigation spontaneously, but it must open one on receiving a complaint from a third party or the Ministry of Economy. Criminal prosecutions against individuals are rare and no individuals have been imprisoned on the basis of antitrust infringement in France. Public prosecutors are free to decide whether to prosecute, but third parties have means to require that a case be opened should the public prosecutor decide not to do so.

Are there any sector-specific offences or exemptions?

No sector-specific offences or exemptions exist.

To what extent, if any, does the legislation apply to extraterritorial conduct?

National legislation applies to extraterritorial conduct to the extent that the practice also affects one or more French markets.

Investigations

Initiating an investigation

Who can initiate an investigation of potential cartel conduct?

The French Competition Authority (FCA) can open investigations on its own initiative. The General Directorate of Competition, Consumption and Fraud Repression (DGCCRF) can also initiate prosecutions.

In addition, cartel victims can file complaints before the FCA or the DGCCRF. On receiving a complaint, the FCA must open an investigation.

Cartel members can also file a leniency application before the FCA, which includes providing the FCA with evidence of anti-competitive practices. 

If an investigation is initiated by complainants or third parties, what rights (if any) do they have?

Complainants are parties to the proceedings. They can submit comments on procedural actions, such as a statement of objection. Once a statement of objection is notified to parties, complainants (like any other party) are granted access to the file.

What obligations does a company have on learning that an investigation has commenced?

Companies have no specific obligations other than replying to requests for information or interviews and attending hearings. However, since creating an obstacle to an investigation is an infringement, companies are advised not to destroy evidence after learning of an investigation.

What obligations does a company have if it believes that an investigation is likely?

Since creating an obstacle to an investigation is an infringement, companies are advised not to destroy evidence after learning of an investigation.

What are the potential consequences of failing to act or delaying action?

Parties that obstruct an investigation can be fined up to 1% of their worldwide turnover. In practice, this penalty is usually imposed following the provision of incorrect or misleading information.

In case of failure to respond to a request for information, the FCA can issue an injunction to cooperate, which may include a penalty of up to 5% of the party’s daily worldwide turnover per day of delay.

Formal stages of investigation

What are the formal stages of and approximate timeframe for investigations?

One or more agents will be appointed to conduct the investigation under the supervision of the rapporteur général.

The stages of an ordinary procedure are:

  • the issuance of a statement of objection;
  • the provision of a report (this can be avoided in some simplified procedures);
  • the staging of a hearing; and
  • the issuance of the decision.

The timeframe is three to five years.

The stages of a request for interim measures are:

  • the provision of a report;
  • the staging of a hearing; and
  • the issuance of the decision.

The timeframe is six to eight months.

Investigative powers

What investigative powers do the authorities have?

The investigative powers of FCA and DGCCRF agents differ depending on the type of investigation.

In an ordinary investigation (governed by Article L450-3 of the Commercial Code), agents can:

  • request the communication of books, invoices and all other professional documents and obtain or copy such material by any means and onto all media; and
  • in investigations regarding computers, access software and data and request a transcription.

In an extraordinary investigation (governed by Article L450-4 of the Commercial Code), agents can, with prior judicial authorisation:

  • visit and search all premises, accompanied by police officers, and seize any physical or digital document to the extent that it is relevant to the investigation; and
  • place seals for the duration of their visit on commercial buildings, documents and materials.

What is the geographic reach of public enforcement actions?

The French national territory.

When is court approval required to invoke these powers?

Previous court approval is mandatory for extraordinary investigations.

Are searches of business and personal premises authorised? If so, which bodies carry out searches and will they wait for legal advisers to arrive?

In ordinary investigations (governed by Article L450-3 of the Commercial Code), agents can enter any premises, lands or means of transport for professional use between 8:00am and 8:00pm. This time limit does not apply if the place is open to the public or if any production, manufacturing, transformation, packaging, transport or commercialisation activity is being carried out.

In extraordinary investigations (governed by Article L450-4 of the Commercial Code), agents can, with the necessary judicial authorisation, visit and search professional or private premises where accompanied by one or more police officers. Such visits can commence only between 6:00am and 9:00pm, but can last as long as necessary. In any event, there is no obligation for investigators to wait for the undertaking’s legal advisers before commencing the visit.

What level of cooperation with the authorities is required and what are the consequences for failing to cooperate?

Full cooperation is mandatory. Obstructing an investigation can result in a maximum of two years’ imprisonment and a €300,000 fine (Article L450-8 of the Commercial Code).

Is in-house legal advice or attorney work product protected by the law of privilege? Does this extend to the advice of in-house counsel?

Only external attorneys’ work product is protected by legal privilege.

Are any other limitations imposed on investigatory powers in order to safeguard the rights of those under investigation?

A police officer will attend an extraordinary investigation. The police officer can be informed of any problems and must report to the judge who authorised the visit. The judge has extended powers to solve any problem of which he or she is advised.

Investigators are bound by a number of rules, such as:

  • refraining from seizing privileged documents; 
  • seizing only documents relating to the investigation; and
  • refraining from visiting a room or seizing documents in the absence of the company’s representatives.

However, only judges can oblige investigators to modify their behaviour. 

What is the process for objecting to an authority’s exercise of its claimed powers?

The judicial authorisation, visiting and document seizure procedures can be challenged before the first presiding judge of the appeal court in whose jurisdiction the judge authorised the procedure. An appeal declaration is filed before the registry of the High Court within 10 days from:

  • the submission or receipt of the official record and inventory;
  • the receipt of notification of the official record and inventory, in the case of persons that were not concerned by the inspection, but were implicated; or
  • the notification of claims specified by Article L463-2, at the latest.

The appeal has no suspensive effect.

The order by the first presiding judge of the appeal court will be open to appeal before the Supreme Court on points of law under the rules set out by the Code of Criminal Procedure. The documents seized will be kept until a decision becomes final (Article L450-4 of the Commercial Code).

Publicity and confidentiality

What information about investigations will be made publicly available and at which stage(s) of the process?

No information will be made publicly available before a decision has been issued. Breach of confidentiality of judicial inquiries may lead to one year’s imprisonment and a fine of up to €150,000.

However, the FCA sometimes issues a press release after dawn raids.

Is any information automatically confidential and is confidentiality available on request?

No information is automatically confidential. The protection of business secrets must be requested from the rapporteur général(Article R463-13 to Article R463-15 of the Commercial Code).

International cooperation

Do the authorities in your jurisdiction cooperate with authorities in other jurisdictions?

The FCA is a member of the European Competition Network, a cooperation network comprising other European national authorities and the European Commission. European Competition Network members can exchange documents and information on cases (Article L462-9 of the Commercial Code).

The FCA is also a member of:

  • the International Competition Network;
  • the Organisation for Economic Cooperation and Development Competition Committee; and
  • the UN Intergovernmental Group of Experts on Competition Law and Policy.

Do the relevant enforcement authorities request waivers so as to allow for increased cooperation with authorities in other jurisdictions? What are the consequences of declining to grant a waiver?

Yes, the FCA can request a waiver in order to communicate with other authorities, although this  is more common in merger control cases. There is no official penalty for refusing a waiver.

Decisions

How is a cartel investigation resolved? Are settlements, plea bargains or other negotiated resolutions available?

An investigation may result in the issuance of a statement of objection.

Parties have two months (which can be extended to three) to submit their comments. The investigation service then issues a report, to which the parties may respond within two months.

The case is then transferred to a panel, which is the decisional organ of the FCA. After hearing the parties, the panel issues its decision.

The FCA can accept negotiated resolutions, such as a deal between the parties (Article L464-2(III) of the Commercial Code) or commitments to cease their anti-competitive practices (Article L464-2(I)), which will reduce the amount of the penalty.

However, the FCA does not permit the pure commitments procedure (which allows a party to avoid being fined) in hardcore cartel cases.

What is the process for negotiating a settlement, plea bargain or other negotiated resolution? Do such resolutions require court or other approval?

Settlements and commitments are negotiated with the rapporteur général and must be approved by a panel decision.

If a settlement is not reached, what is the procedure for adjudicating a charge of cartel conduct?

Further to the statement of objection, a first written defence submission is produced. The case team will then produce a report that:

  • accepts the defence arguments (which is rare);
  • amends the initial accusation; or
  • as is often the case, confirms the initial accusation by dismissing the defence arguments.

This latter report also presents elements that the panel will use to calculate the fine. The accused company can produce a second written defence submission.

Finally, the case will be heard (see below).

Which party must prove its case? What is the relevant standard of proof?

Pursuant to the French principle of the presumption of innocence, the burden of proof is on the FCA rapporteur général and the plaintiff. The relevant standard of proof for a cartel will result from direct documentary evidence and, failing that, indirect evidence constituted by the bundling of serious, precise and concordant indicators. The standard is generally considered to be lower than that for criminal prosecution.

The burden of proof can be inverted in some circumstances. For instance, once a cartel has been proved, it is up to the accused company to try (generally unsuccessfully) to prove that the behaviour can be exempted because its competitive upsides outweigh its competitive downsides. Likewise, once it has been proved that a subsidiary is guilty, it is up to the parent company to prove that it did not exert any determining influence on that subsidiary.

Is there a hearing? If so, what is the process for submitting evidence and testimony?

All cases involve a hearing before the FCA panel. Evidence and testimonies can be added to the applicant’s file at any time during the investigation until the hearing. However, witnesses or experts can be heard only if the panel chair accepts this further to a formal request.

Hearings usually last a few hours. The panel will hear:

  • the case team;
  • the rapporteur général (or his or her deputy);
  • the government’s representative;
  • the plaintiff (if any); and
  • the accused party or parties.

All cartel participants attend and speak during the same hearing.

What are the accused’s procedural rights?

The accused has the right to enjoy a full separation of the investigating and accusing team (under the rapporteur général’s supervision) and the panel. Before the hearing, companies can complain that their rights have been infringed to a special officer, who can act only as a powerless mediator. In general, it is impossible to appeal the intermediary steps of the procedure, but any illegality can be invoked later if and when the panel’s final decision is appealed. However, it is possible to appeal immediately a decision refusing the protection of business secrets.

More generally, the accused enjoys the right to a fair trial, the right to speak last and the right to appeal.

Appeal process

What is the appeal process?

An appeal must be lodged before the Paris Court of Appeal within one month from notification of the FCA’s decision. The court of appeal’s ruling can later be brought to the Supreme Court.

To what extent can the appeal body review the agency’s findings of fact, legal assessment and penalties?

The Paris Court of Appeal has jurisdiction to review the entire case, on facts, law and penalties.

The Supreme Court can review only the court of appeal’s legal reasoning.

Penalties

Penalties for companies

What are the potential penalties for companies involved in a cartel?

Companies can receive administrative penalties of up to 10% of their worldwide turnover (Article L464-2(I) of the Commercial Code).

Are there guidelines in place for penalties? If not, how are penalties normally calculated?

The FCA has published guidelines in French and English on its website (Notice of May 16 2011 on the Setting of Financial Penalties).

Do the authorities take into account any penalties imposed in other jurisdictions?

In application of the non bis in idem principle (ie, no party will be twice tried for the same offence), a company cannot be fined twice for the same infringement.

How can a company mitigate its exposure to fines?

A company can mitigate its exposure to fines through leniency, commitments and deals.

Penalties for individuals

What are the potential penalties for individuals involved in a cartel?

Criminal penalties for individuals include up to four years’ imprisonment and a fine of up to €75,000 (Article L420-6 of the Commercial Code).

In France, criminal prosecution of individuals is rare and no individuals have been imprisoned in relation to antitrust infringement.

Do the authorities take into account any penalties imposed in other jurisdictions?

As with companies, in application of the non bis in idem principle, an individual cannot be fined twice for the same infringement.

Is a company permitted to pay a penalty imposed on its employee?

Not applicable.

Is a company permitted to continue to employ an employee involved in cartel conduct?

Yes.

Private actions

Private damages actions

Can private actions for damages be brought in your jurisdiction? If so, who may assert such actions?

Victims can bring private actions for damages before the civil or commercial courts.

What relief may be awarded to successful claimants (eg, damages, costs, injunctive relief or attorneys’ fees)?

Damages awarded should fully compensate victims’ losses. Trial costs can also be reimbursed at the judge’s discretion.

How are the amounts of any damages, costs or attorneys’ fees calculated?

See above.

Have there been any notable recent cases in which a private action was the subject of adjudication?

In one such case, €6.9 million in damages compensation was granted to a victim of a SNCF/Expedia online travel agency cartel (CA Paris, ch 5-4, December 14 2016, SNCF v Pellegrini (Switch judicial representative); Decision FCA 09-D-06, February 5 2009).

Class actions

Can class actions be brought in your jurisdiction? If so, what is the procedure for such cases?

Consumers who are victims of anti-competitive practices can bring a class action through a consumer association. The practice must be established by a competent court or authority without possibility of recourse.

A group of victims has five years from a final decision to bring a class action before a civil court through an opt-in system.

Immunity and leniency

Immunity and leniency programmes

Is an immunity and leniency programme available for companies? If so, how does it operate?

The French Competition Authority (FCA) has a working and widely used leniency programme.

The first company to provide information can be granted full immunity. Other companies can apply for partial immunity (the fine can be reduced by 15% to 50%) if they bring significant added value to the investigation.

Can the enforcement authority decline or withdraw leniency? If so, on what basis?

The FCA can decline leniency if precise requirements are not fulfilled or insufficient evidence is brought.

Further, the FCA can withdraw leniency if the company fails to:

  • cooperate fully with the FCA;
  • end its participation in the cartel; or
  • inform other companies of its leniency application.

The FCA can also withdraw leniency if it appears that the applicant compelled other companies to participate in the cartel.

Are there benefits for cooperators that do not qualify for immunity? If so, how are these benefits determined?

Other cooperators that fail to qualify for immunity can apply for partial immunity of up to a 50% fine reduction if they contribute added value to the establishment of the reality of a prohibited practice:

  • The first company to bring significant added value can receive a fine reduction of between 25% and 50%.
  • The second company to bring significant added value can receive a fine reduction of between 15% and 40%.
  • The third company to bring significant added value can receive a fine reduction of up to 25%.

Further, a company can choose to cooperate with the FCA and decline to challenge the statement of objection and offer commitments for the future. In this event, the FCA can allow a fine reduction of up to 25%.

What benefits (if any) are available for employees and former employees of a company that seeks leniency?

No benefits are available for employees and former employees of a company that seeks leniency.

Is an immunity or leniency programme specifically available for individuals? If so, how does it operate?

No specific programme is available in France for individuals.

Have there been any notable recent cases in which a leniency application was the subject of adjudication?

One such case involved a cartel in the fresh dairy products sector (15-D-03, March 11 2015). In this case, Yoplait benefited from immunity because it reported the cartel first and Senoble benefited from partial immunity because it was the first company to bring significant added value.

More generally, several recent French cartel cases (involving washing powders and home and care products) were initiated by leniency applicants.

Criminal liability

Is immunity from criminal prosecution available? If so, how and under what conditions is immunity granted?

Immunity from criminal prosecution is not available in France.

Application procedure

What is the procedure for a leniency application?

First, the FCA can be contacted anonymously through the leniency adviser. Then, the leniency application must be formalised by way of:

  • a letter, whose receipt the FCA must be notified of in writing or orally; or
  • a written report of the rapporteur général.

The leniency rank will be defined in accordance with the date on which the above actions occur.

The rapporteur général will set a timeframe for the submission of evidence. If evidence is not submitted during this timeframe, the company will lose its leniency rank.

What is the typical timeframe for consideration of a leniency application?

The rapporteur général decides the timeframe.

What information and evidence is required?

Sufficient evidence to enable the FCA to establish the existence of an infringement and commence an investigation, provided that it did not already have such information.

What information and evidence is disclosed to subjects of the investigation other than the leniency applicant?

Confidentiality with regard to leniency applicants is preserved until the statement of objection is issued.

What level of cooperation is required from applicants?

Full, permanent and fast cooperation with the FCA is required from applicants at every stage of the procedure.

What confidentiality protection is offered to applicants?

A leniency programme application remains strictly confidential and cannot be communicated to anyone, including in the context of a civil claim.

Can the company apply for a marker? If so, under which conditions?

Companies can apply for a marker on the condition that they:

  • identify the concerned products;
  • identify the territory in which the presumed cartel developed;
  • identify the cartel members;
  • identify the nature and duration of the cartel; and
  • advise whether any other leniency application is pending before other competition authorities.