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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.

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