On April 3, 2015, after a public consultation launched last February 27, the French Competition Authority (the "Authority") released its fourth version of the procedural notice on leniency proceedings (the "Procedural Notice").
The leniency program, which was enacted in 2001 in France, allows a company which provides information regarding a cartel in which it was involved to obtain full or partial fine exemptions.
The previous version of the Procedural Notice was from March 2009 and its update is justified by the importance of the leniency program in the architecture of competition policy in France. Indeed, of the five cartel cases that have led to the highest fines issued by the Authority since the leniency program was instituted, four were based on leniency applications.
The Procedural Notice provides some clarification regarding the percentages by which fines may be reduced, the scope of the leniency program and how it is implemented.
Adoption of tiers of fine reductions
In the Procedural Notice the Authority sets for the first time tiers of fine reductions which may be granted to leniency applicants who cannot receive a full fine exemption (referred to as "type-2" applicants).
This is a major improvement of the Procedural Notice, which lawyers and companies had been expecting for some time. The Procedural Notice specifies that the fine reductions will be as follows :
- between and including a 25% to 50% reduction for the first company that provides significant added value;
- between and including a 15% to 40% reduction for the second company that provides significant added value; and
- a maximum reduction of 25% for lower-ranking companies.
The Authority has modeled its approach on the European Commission's, although its has adopted its own tiers. Indeed, the reduction tiers the Commission proposes for type-2 applicants is between and including 30% and 50% for the first applicant, between 20% and 30% for the second applicant and it is capped at 20% for lowering-ranking applicants.
By choosing broader tiers, the Authority gave itself greater leeway for setting the fine. However, this is to the detriment of companies because it means less legal foreseeability.
The Procedural Notice further indicates that the Authority may grant a final reduction that is lower than the proposed range if one of the leniency conditions is not met.
The Procedural Notice makes the following clarifications regarding the scope of leniency:
- The leniency proceedings apply to "hub and spoke" practices in which an agreement between competitors occurs via a third party in a vertical relationship (e.g., two distributors who coordinate their policies with the help of a supplier).
- Only entities belonging to the same group can be covered by the leniency application (e.g., this excludes former parent companies).
- In the case of a leniency application filed primarily with the European Commission, a summary application may be filed simultaneously with the Authority for all leniency cases and no longer only for full leniency.
Implementation of the proceedings
The Procedural Notice makes the following clarifications regarding how leniency is implemented:
- If the first contact is by telephone, appointments for officially filing the leniency application will be granted in chronological order as calls are made in order to keep the applicants' order of arrival.
- If a leniency application is made while a dawn raid is being carried out, the appointment based on which the leniency application is made will be granted only after the dawn raid is completed.
- The Authority will publish a press release informing third parties of the fact that an investigation has taken place to ensure that companies in that sector which have not been subject to a dawn raid have equal access to leniency. It is specified that the press release will not mention companies' names and that if the Authority decides not to pursue the investigation, it will so inform the public in another press release.