ANTITRUST ALERT
ANTITRUST ALERT
A Global Resource for Compliance Officers & Legal Advisors
ANTITRUST ALERT
A Global Resource for Compliance Officers & Legal Advisors
French Competition Authority
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European Developments: French Competition Authority Launches Public Consultation on Settlement and Compliance Programs and Italy’s Prime Minister Announces New Cabinet

by | Nov 17, 2011 | , , , ,

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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French Court Orders French Competition Authority to Disclose Antitrust Investigation Documents

by | Nov 14, 2011 |

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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French Court Orders French Competition Authority to Disclose Antitrust Investigation Documents

by | Sep 22, 2011 |

by Philipp Werner and Lionel Lesur

On 24 August 2011, the Commercial Court in Paris ordered the French competition authority, the Autorité de la concurrence (Autorité), to disclose documents relating to the settlement of an antitrust investigation in the context of a private damages action.  This order could significantly strengthen the position of claimants in damages actions in France and potentially in other EU Member States and adds another layer of complexity to cartel cases in the European Union.  When agreeing to settle with the Autorité, companies must therefore now consider the potential risk of having to disclose documents in future actions.

To read the full article, click here. 



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Withdrawal of Clearance Decision and EUR 30 million Fine Against Canal Plus for Unfulfilled Merger Clearance Commitments

by | Sep 21, 2011 | , , ,

by Louise-Astrid Aberg and Lionel Lesur

The French Competition Authority has taken a hard stance by withdrawing its authorization of French broadcaster Canal Plus’ purchase of rival commercial television company TPS, formerly the two most powerful players on the pay TV market.  This decision reasserts the importance of respecting imposed remedies.  In this case, Canal Plus was sanctioned with a fine of EUR 30 million for failing to fulfill the 59 remedies imposed by the Authority in 2006, and has been given one month to re-notify the transaction to the Authority.

While Canal Plus had "only" failed with respect to 10 of the 59 remedies, the Authority did not consider this to be an attenuating circumstance because several of these remedies were "essential" and that the entire "package" of commitments should have been implemented due to the likely impact of the concentration on competition in the market.  In particular, Canal Plus was blamed for being too slow in providing downstream distribution companies (principally represented by internet access providers) access to channels and content. The downstream distributors needed this content to be able to offer competitive packages of pay TV. The Authority considered this obligation essential and at the heart of the commitments necessary for the maintenance of competition.

In France, the Competition Authority can act on its own to take action against companies that fail to respect commitments entered into in the context of an antitrust investigation.  In the past, fines have been imposed on companies, but the amounts were quite symbolic (i.e., EUR 200,000 for two companies active in the postage sector).  This recent decision will force companies submitting to remedies to resolve a planned concentration to be certain it can accept/effectuate those constraints, as the ultimate failure to respect them could lead to disastrous outcomes.  Indeed, not only could companies risk a withdrawal of the Authority’s authorization and the imposition of very high fines, such as in the present case, but also, the parties could be ordered to reverse the concentration if the commitments would prove impossible to honor.  Canal Plus, which has one month to renotify the concentration, will therefore be forced to undergo a new investigation by the Authority which could in theory end with an obligation to demerge.

It still remains unclear which type of remedies are considered essential by the Authority and, consequently, which breach could lead the Authority to impose the obligation to renotify and fines as significant as in the present case.  More specific details from the Authority about which remedies are considered essential are necessary so that companies can be informed during their considerations of whether or not to accept certain types of remedies. This case is, however, very specific as the conditional authorization granted by the French Competition Authority in 2006 led to the creation of a monopoly.  Moreover, many authors and practitioners highly criticized this decision, particularly several remedies which appeared to be impractical to implement immediately.

The decision (in French) and the press release (in English) can be read respectively at https://www.autoritedelaconcurrence.fr/pdf/avis/11d12.pdf and https://www.autoritedelaconcurrence.fr/user/standard.php?id_rub=389&id_article=1697.



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