French Law 2015-990 for economic growth and activity, known as the “Macron Law”, entered into force on 6 August 2015.
The Macron Law introduces some major innovations to French competition law. The main legal changes include revisions to certain procedures before the French Competition Authority, (the “Autorité de la concurrence”, the “FCA”) such as the French settlement procedure and national merger control procedures. The Macron Law also provides procedural changes in the FCA’s enforcement powers and includes specific measures in the retail sector.
1. Changes to the Settlement Procedure (Transaction)
Under French law, a company can apply for a fine reduction for anticompetitive practices when it agrees to refrain from challenging the formal statement of objections (“SO”) issued by the FCA following an investigation on potential competition infringements.
This procedure, known as the “non contestation des griefs” procedure, can be compared to the settlement procedure before the European Commission, whereby a company can be granted a fine reduction of up to 10% under EU Regulation 773/2004 of 7 April 2004 and Regulation 622/2008 of 30 June 2008.
Prior to the Macron Law, the French regime was considered to be insufficiently attractive since companies had no certainty as to the amount of fine reductions to be granted by the final ruling; they were simply given an indication of the maximum fine, which could be cut by half. As a reminder, the maximum fine is 10% of the worldwide turnover of the relevant group under both French and EU law. Nonetheless, companies had no idea of the fine when they applied for, and accepted, settlements upon receipt of an SO. The maximum fine amount is, indeed, rarely imposed.
Under the Macron Law, companies will now be informed of the potential range of fines expressed in Euros, i.e. with a maximum and a minimum fine, when they apply for a settlement. If this range is not satisfactory for the company concerned, the company may choose to withdraw its application for settlement so as to defend the case against the infringements alleged in the SO.
It should also be noted that the French leniency program now provides for a slightly simplified procedure. The FCA may now adopt a decision granting full immunity from fines to a company reporting competition infringements (e.g. cartels) without a full written report being issued by the General Head of Investigation (Rapporteur Général).
2. Amendments to the merger control procedure
- Timeframes for merger assessment
The Macron Law introduces a new ‘stop-the-clock’ mechanism in the context of a Phase I review period for transactions falling within the jurisdiction of the FCA. A Phase I assessment in principle lasts 25 working days, but this period may now be suspended when the parties have failed to inform the FCA of any new elements as soon as they occur or failed to communicate all or part of requested information within the time limit granted during the review period.
Moreover, the additional period for in-depth analysis (Phase II) may now be extended where the parties submit amendments to previous remedies proposals to obtain an FCA clearance. Nonetheless, the Macron Law limits the overall Phase II assessment period to a maximum of 85 working days.
- Suspensive effect of merger filings
As a reminder, mergers and acquisitions may not be implemented until a clearance has been obtained from the FCA for transactions falling within its jurisdiction, as with EU Law.
However, the Macron Law introduces the possibility for the party notifying a merger to ask the FCA for a derogation from that “suspensive” effect. If the FCA agrees to this, it shall provide the relevant party with a letter granting it permission to proceed with the merger without the need to wait for the FCA’s clearance decision.
Nevertheless, the Macron Law provides that the derogation will be void if, within three months after the implementation of the merger, the FCA has not received a complete notification.
3. Specific Measures in the Retail Sector
In line with an opinion issued earlier this year, the FCA must now be provided with any agreement between independent companies active in the retail sector for consumer products or between central purchasing entities, where that agreement pertains to the joint negotiation of the purchase or the selection of products from suppliers.
Such agreements must be submitted to the FCA at least two months before their implementation and the FCA is entitled to initiate proceedings if such an agreement raises competition concerns under the general prohibition of anticompetitive agreements (art. L. 420-1 of the French Commercial Code). A Decree should further define the companies concerned by these rules, based on the turnover of the companies concerned.
4. Local Anticompetitive Practices
With the Macron Law, the FCA is now entitled to refer cases to the Ministry for the Economy (and therefore the “Direction générale de la concurrence, de la consommation et de la répression des fraudes”, hereinafter referred to as the “DGCCRF”) when they involve local anticompetitive practices. Local anticompetitive practices only affect a geographic market of limited local dimension, in particular but not limited to the retail sector.
The DGCCRF remains entitled to deal with local cases on its own initiative, however it will now receive additional FCA referrals, provided that the DGCCRF orders injunctions or offers settlements when applicable in such cases.