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Antitrust: restrictive agreements and dominance

The FCA's antitrust enforcement activity, other than cartels, covers restrictive agreements under Article L.420-1 of the French Commercial Code and Article 101 TFEU as well as abuse of a dominant position under Article L.420-2 of the French Commercial Code and Article 102 TFEU.

i Significant cases

Among other notable cases, the FCA imposed a €355,000 fine on manufacturers and wholesale distributors of liquid fertilizers. It found that producers and distributors had agreed on a vertical pricing scheme, which led to the harmonisation of fertilizer prices. The decision is particularly interesting concerning sanctions, since the Authority granted a fine reduction on the grounds of financial difficulties, which it rarely does; as a result, one of the companies saw its fine reduced by over 99 per cent.

The Authority also issued two decisions sanctioning companies for unjustified exclusive imports in the French overseas territory this year. Although such exclusivity rights relate to antitrust, these decisions rely on a specific legal basis, distinct from Articles L.420-1 and L.420-2. Since the 'Lurel act' of 2012, the FCA is also in charge of enforcing Article L.420-2-1 of the French Commercial Code, which prohibits unjustified exclusivity provisions in overseas territories. October's was the fifth decision issued on such exclusive imports since the creation of the ban.

Finally, the FCA fined a recruitment company €4.5 million for not complying with commitments agreed upon during a cartel settlement. In 2009, the enforcer had fined three agencies for sharing sensitive information; some of them settled, and had their fines reduced after agreeing to commitments made out to reduce market transparency. To that end, one undertaking was supposed to market some of its products through independent subsidiaries; nevertheless, the Authority found that it had appointed its own director of strategy as head of one of these subsidiaries, thus failing to comply with its commitment. The FCA reiterated that it views violations of commitments as serious infringements, especially in cases such as this one where companies had offered them at their own initiative.

As for the courts, the CAP issued a long-awaited ruling on a 2012 FCA decision, after a referral by the Supreme Court. In 2012, the FCA had imposed a €60.9 million fine on SNCF for abusing its dominant position by preventing rivals from accessing vital infrastructures and using strategic information it obtained from competitors when they applied to use its infrastructure. The FCA also found that SCNF was engaging in predatory pricing, but issued an injunction instead of a fine on this account, forcing the company to increase its fees so as to cover its costs. In a first appeal decision in 2014, the CAP found that SNCF's prices were not predatory and partially quashed the FCA's decision; the CAP's ruling was then quashed by the Supreme Court and referred back. This time, the CAP ruled that SNCF had committed exclusionary abuse; however, it reduced the initial fine by 13 per cent to €53 million.

The Supreme Court, meanwhile, settled an important matter as to the extension of leniency to a parent company. In 2012, the FCA had fined several companies that took part in a cartel of commodity chemicals. One of the undertakings was granted full immunity; however its parent company, which was found jointly liable, since it controlled one of the participants at the time of the infringement, could not benefit from immunity because it had lost control of the company since and had not requested immunity on its own. The Supreme Court fully confirmed that, for an undertaking to be extended the benefit of immunity granted to its subsidiary, it had to be its parent company at the time of immunity application, no matter the fact that it was at the time of the infringement.

Finally, a court of first instance shed light on the interactions between public and private enforcement. Competitors had filed an action for damages following a commitment decision by the FCA, meaning that the Authority did identify potential anticompetitive practices but closed the case without confirming nor ruling out the existence of an infringement. The court ruled that a commitment decision did not prevent them from claiming they were harmed by the practices at hand and obtaining damages if they could prove that these practices were indeed anticompetitive. To that aim, the judge is allowed to use the FCA's decision as commencement of proof of the anticompetitive nature of the practices.

ii Trends, developments and strategiesSelective distribution and online sales: implementing Coty

Following the European Court of Justice's (ECJ) Coty ruling in 2017, attention was brought to selective distribution and online retail in France this year. The FCA fined a chainsaw manufacturer €7 million for prohibiting its distributors from selling products online. It found that the nature of the products and the need to preserve brand image justified a ban on third-party platforms, but the fact that the manufacturer's terms of sales de facto prohibited distributors from selling on their own websites as well disproportionately limited competition. The FCA declared that this decision, its first on online sales restriction since Coty, should be used for guidance as to the applicable framework for selective distribution online. As to the CAP, it also followed in the footsteps of the ECJ and cleared several clauses organising Coty France's selective distribution network.

Renewed interest for excessive pricing cases

Enforcers are looking more and more into exploitative abuse, in particular excessive pricing, as a series of cases in the pharmaceutical industry recently showed (Pfizer and Flynn in the UK, Aspen Pharma in Italy and now under EU investigation, or CD Pharma in Denmark). France is no exception, and 2018 showed a renewed interest for excessive pricing cases. In September, the FCA imposed a €199,000 fine for abusive prices on Sanicorse, an operator handling the disposal of infectious medical waste from healthcare activities in Corsica. The Authority stated that Sanicorse had committed exploitative abuse by increasing its prices abruptly, significantly, durably, and without justification. In another sector, the President of the FCA announced in December that online hotel booking platforms were currently under review for a potential case of excessive pricing.

Due process

Due process remains a much-debated issue in France when it comes to FCA proceedings. Undertakings often file for judicial review of the dawn raids they were subject to, although it remains quite rare that courts grant their demands and overturn the operations. In a rare instance, in 2018, the CAP fully overturned a probe carried out at Darty in 2013. It found that FCA agents had breached Darty's rights of defence by preventing employees from calling lawyers at the beginning of the raid. The FCA was hence ordered to return all documents seized during the probe and refrain from using them or copies of them in its investigation.