The recent investigations into two pharmaceutical companies active in the ophthalmic drugs market in Italy and France serve as a reminder of the cooperation that takes place between national competition authorities. International groups should therefore take into account all the jurisdictions where they have a presence or do business when developing their antitrust audit and compliance programmes.
France is one of the last western European countries to introduce a class action system. After decades of debates, two failed attempts by both left wing and right wing Parliament majorities, nine months of legislative procedure and thousands of amendments, it should soon, finally, be possible to launch a group action in France.
by Louise-Astrid Aberg, Lionel Lesur and Philipp Werner
The Cour de cassation, France’s highest court for judicial matters, rendered a judgment on 15 January 2013 in a case involving Jaguar’s distribution agreements in France. The judgment follows an earlier ruling on the matter by the Court of Justice of the European Union (CJEU), from which the Cour de cassation had requested a preliminary ruling. The Cour de cassation ruled essentially that quantitative selective distribution systems must be based on specified criteria, but those criteria do not need to be objectively justified and applied in a uniform and non-differentiated manner. It therefore exactly applied to the facts at issue the definition provided by the CJEU as regards the nature of “specified criteria” in Article 1(1)(f) of Regulation No. 1400/2002 of 31 July 2002 on the application of Article 81(3) of the Treaty to categories of vertical agreements and concerted practices in the motor vehicle sector (i.e., the Vertical Block Exemption Regulation for the Automotive Industry (VBER 1400/2002)).
To read the full article, click here.
by Philipp Werner and Wilko van Weert
On 13 December 2012, the Court of Justice of the European Union (CJEU) held that national competition authorities (NCAs) can apply European competition rules, and fine companies for an infringement of EU rules, even in cases where the European Commission considers that Article 101(1) Treaty on the functioning of the European Union (TFEU) is not applicable.
To read the full article, click here.
by Jacques Buhart and Lionel Lesur
The French competition authority (FCA) released on 8 October 2012 an opinion in relation to the car repair and maintenance sector. The opinion is the result of a public consultation that was launched in Spring 2011.
The opinion, which is more than 200 pages long and available only in French, contains several statements and proposals aimed at increasing competition in the car repair and maintenance sector that may have substantial implications for market participants.
In response to the opinion, the French Minister of Industrial Renewal, Arnaud Montebourg, said that while the French Government will consider the FCA’s proposals, keeping prices low for consumers is not currently a top priority. It can therefore be assumed that the French Government will not be making significant changes to legislation imminently. The opinion may, however, have some immediate implications for the sector.
To read the full article, click here.
by Joseph F. Winterscheid and Andrea L. Hamilton
Recent developments in the global legal landscape point to the inevitable conclusion that having an effective antitrust compliance program in place is now more important than ever.
To read the full article, click here.
by David Henry and Philipp Werner
On February 7, the European Commission (EC) and the European Free Trade Association (EFTA) Surveillance Authority conducted unannounced inspections in the energy exchange market. Representatives of Nord Pool Spot (Lysaker, Norway) and EPEX Spot (Paris, France and Leipzig, Germany) announced that the companies were subject to inspections. It is not known whether other companies were also raided. The inspections show that the EC’s enforcement policy extends beyond the retail level of the energy sector.
To read the full article, click here.
by Lionel Lesur and Louise-Astrid Aberg
Following up on our prior post, on February 10, 2012, the French Competition Authority (FCA) published the final version of its framework document on compliance programs and of its Notice relating to settlements.
First, the FCA decided that the Notice of Settlement would have the legal status of a "directive" under French administrative case law. Consequently, the Notice of Settlement is legally binding on the FCA and fully enforceable against it, except if the FCA explains in its decision the specific circumstances or any reason of general interest commanding it to adopt another solution.
Second, for the Notice of Settlement, the FCA decided to relax its initial rule preventing the cumulating of a settlement reduction and a leniency reduction. The FCA adopted this principle, first put forward in the laundry detergents cartel decision (December 8, 2011), that states companies may cumulate both reductions when significant procedural efficiencies are expected from such a cumulation of both procedures. In particular, this could occur when the objections notified to a party differ from the cartel described by the party in its leniency application. Settling parties may benefit from a 10 percent fine reduction.
In addition, parties settling with the FCA can decide to adopt behavioral or structural remedies that will enable them to benefit from an additional reduction between 5 percent and 15 percent. For cartels, parties can benefit from a reduction of up to 10 percent if they commit to changing their behavior in the future, in particular, by implementing a compliance program.
The framework document on compliance programs maintains that the mere existence of a compliance program will not, in principle, be considered as a mitigating circumstance by the FCA when imposing a fine. However, an important exception to this principle has been added to the draft document for cases other than cartels, e.g. an abuse of a dominant position or a vertical restraint. In these cases, companies with a compliance program that, through their own volition, immediately ends anti-competitive behavior upon discovery through their compliance program – that is, before any inspection or investigation is conducted by a competition authority – may claim the program as a mitigating circumstance if the FCA decides to take action against the company. Consequently, in cases other than cartels, the existence of a compliance program may now, under some conditions, be considered as a mitigating circumstance by the FCA when imposing a fine. It remains to be seen how widely the FCA will apply this new rule and what will be the rate of reduction.
The FCA’s new policy may thus provide strong incentives for companies to implement compliance programs.
Click here to read The Notice of Settlement (in French), here to read the framework document on compliance programs (in French) and here to read the press release (in English).
Public Consultation on Settlement and Compliance Programs Launched by the French Competition Authority
by Louise-Astrid Aberg and Lionel Lesur
On October 14, the French Competition Authority (FCA) launched a two-month public consultation for guidelines on settlement and compliance programs. Both these guidelines have been highly anticipated since they were first announced last May.
The draft settlement guidelines contain details on the FCA’s approach and decisional practices which were developed under the control of the French courts. Among the guidelines, the FCA determined that settlement is possible in all cases where infringement on competition law has taken place, including cartels, vertical restraints and single firm conduct. In the event of infringement, settlement becomes an option only after the parties have been formally charged. Once parties fully acknowledge their participation in anticompetitive conduct, the casehandler in charge of the matter would decide whether to respond positively to their request for a settlement. Parties retain the same procedural rights that they would in an ordinary procedure; in particular, they would be granted access to file. The FCA would reward parties who wish to settle with a fine reduction of 10 percent. In contrast to the settlement procedure of the European Commission (EC), it would not be possible to cumulate both a settlement reduction and a leniency reduction. However, parties settling with the FCA may decide to adopt behavioral or structural remedies which would enable them to benefit from an additional reduction of 5-15 percent. With regard to cartels, parties would benefit from a reduction up to 10 percent if they commit to changing their behavior in the future, in particular, by implementing a compliance program.
The draft guidelines elaborate further on the benefits of implementing a compliance program. The FCA clarifies several instances in which a compliance program would enable a party to benefit from a reduction of its fine. In the course of ordinary proceedings resulting in the imposition of a fine, the existence of a compliance program or the lack of it would not act as an attenuating or an aggravating circumstance. However, in the case of a settlement procedure, the commitment to implement a compliance program would be considered a commitment by the company to change its behavior in the future and would, thus, enable the party to benefit from a reduction of its fine. In this sense, the FCA and the EC agree that implementing compliance program would not have a significant effect on a fine that is set outside of a settlement procedure. The FCA only differs with respect to the specific context of a settlement procedure.
A fine reduction of up to 10 percent may not be easy to obtain. A compliance program would only be considered by the FCA if it includes the following characteristics: (i) the company’s top executives are strongly committed to the program, (ii) the company has designated persons to oversee the program and take charge of its implementation, (iii) the company has taken effective [...]
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by Louise-Astrid Aberg and Lionel Lesur
The Commercial Court in Paris has once again ordered the French Competition Authority (the Autorité de la concurrence, the "FCA") to disclose documents in its file regarding an antitrust investigation on private damages. However, the new decision, allows for the disclosure on a different procedural setting and on different grounds than the previous decision, which was rendered by a different Chamber of the court on August 24, 2011.
The latest decision was made in the aftermath of an infringement decision pursuant to a request for disclosure made by the defendant. This contrasts with the previous decision that involved a settlement procedure and where the request was made by the plaintiff.
Both decisions ordered disclosure of documents, but on different legal grounds. Article L. 463-3 of the French commercial code prohibits the disclosure of information that is part of an FCA investigation and, therefore, confidential. However, article 138 of the French code of civil procedure provides that a judge can order the production of documents if the party wishes to exhibit (i) an official document, (ii) an agreement to which it was not a party or (iii) any document held by a third party.
In the August 2011 decision, the court ordered the FCA to disclose documents in its file on the basis of article 138. In the present case, however, the court held that the production of documents in the FCA’s file could not be considered a confidential disclosure under article L. 463-3 because both parties were familiar with the documents at issue.
To add to the confusion, the court justified the disclosure as necessary for the requesting party to exercise its rights. This additional justification muddies the standard that allows for production of these documents — the court had already taken the position that disclosure is possible when the documents are known by both parties.
In the absence of more details on the reasoning of the court, it remains to be seen what the implications for leniency applications will be. At this point, it would be useful to have a decision by the Cour de cassation (the French Supreme Court for judicial matters) which could more fully explain the courts’ rationale and provide guidance on this issue, by specifying the scope of the disclosure of documents in the FCA’s file.
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