By decision dated 15 December 2015, the French Competition Authority (“FCA”) fined a group of package delivery companies EUR 670.9 Million for price-fixing. The twenty companies concerned were found to have implemented a price-fixing agreement during a period from 2004 to 2010.
This anti-competitive practice aimed notably at coordinating price hikes in a concerted effort to distort and hinder competition. For instance, in the course of their negotiations for the year 2006-2007, most participants in the price fixing scheme initially envisaged a price increase of about 5%, which eventually reached 7% after the participants had met.
Typically, price fixing participants would secretly meet in discreet locations in order to exchange information. What is most unusual in this instance is that the meetings took place during apparently routine workgroup sessions in the premises of the package delivery service trade union, which therefore played an active role in the running of the scheme when in fact it was among its professional duties to act as a competition watchdog. The FCA therefore also issued a fine against the trade union.
The dismantlement of the cartel by the FCA was yet again the result of the leniency program, set out in the French Commercial Code, pursuant to which partial or total immunity may be granted to a company which comes forward to report an anti-competitive practice in which it took part. The information given voluntarily by the whistleblowing companies is therefore exchanged for reduced fines. In this particular instance, the anti-competitive practice was reported by two participant companies before the FCA even suspected any wrongdoing, which enabled both companies to avoid heavier fines. However, the total immunity which could have been granted to the company which first reported the violations (Deutsche Bahn) was declined by the FCA due to failure by Deutsche Bahn to fully disclose all the meetings it attended.
When calculating the EUR 670.9 Million fine it issued, the FCA took into account the duration of the practices, their seriousness and the harm caused to the overall economy (the FCA considered package delivery services a key sector of the economy, amounting to about EUR 8.5 billion a year in turnover during the period under scrutiny) and in particular to those clients who are small and medium-sized enterprises, which, due to their inability to negotiate prices with package delivery companies, suffered most from the price hikes. The FCA nevertheless took into consideration that six participant companies are undergoing financial difficulties and, accordingly, reduced the amount of theoretical fines for these companies by more than 90%.