Thought leadership from our experts

Flying high with the French Competition Authority in 2016

Since the new millennium, French rules on competition have gone through three waves of significant reform with the latest – arguably the most significant – dating from just August 2015. These major reform packages have taken place in seven - year cycles: 2001, 2008 and now 2015. The first was set out in the Law on Economic Regulations (so-called "Loi NRE") of 15 May, 2001, which substantially amended the competition rules, including the introduction of mandatory merger control notification procedures to replace voluntary notifications procedures. The second major reform came with the Law on Modernization of the Economy (so-called "Loi LME") of 4 August, 2008, which instituted a new French Competition Authority (Autorité de la Concurrence) as a new authority with significantly expanded powers in comparison with its predecessor institution, the Competition Council (Conseil de la Concurrence), particularly in merger control procedures. And, finally, after a long period of legislative preparations culminating with the annulment of certain provisions by France's Constitutional Court, on 6 August 2015, the "Law on Growth, Economic Activity and Equal Opportunity" was enacted, involving a major overhaul of the very conception of competition law in France (the new law is known as the "Loi Macron" – Emmanuel Macron is the French Minister of Economy). In particular, it grants a new and expanded role to France's Competition Authority, as explained below.

Meanwhile, the French Competition Authority has once again stretched its wings as a competition enforcer. For the second year in a row, it imposed antitrust fines in excess of one billion euros, which puts it in the select "billion euro club" of European competition enforcers, along with the European Commission and Germany's Bundeskartellamt.

New and expanded role of the French Competition Authority

The "Loi Macron" includes in total 308 articles, many of them concerning competition (including new provisions on merger control) and distribution. Perhaps the most telling ones involve oversight, through the issuance of non-binding "soft-law" opinions, of regulated economic sectors including, inter alia, the legal profession (avocats and notaires), auctioneers and certain insolvency receivers and administrators. Indeed, the Authority may be consulted or may issue an opinion on its own initiative on the status of competition in these regulated sectors, particularly with regard to price competition as well as a review of geographic markets in which effective competition is lacking. Moreover, the Authority may issue opinions on freedom of establishment of these professions in the French territory. The "Loi Macron" has been said to create a sort of "observatory" of the regulated professions in France.

The new law also introduces the possibility for the Authority to control purchasing consortia and to monitor them ex ante. Above a certain turnover, the Authority must be informed at least two months before the implementation of any agreement for the joint negotiation of the purchase, the referencing of products or the sale of services to suppliers taken between undertakings operating a mass-market retail outlet or operating in the distribution sector.

With regard to behavioral antitrust, the "Loi Macron" creates a new settlement procedure, called "transaction", which replaces the former "non-contestation procedure". When an undertaking has received a statement of objections and does not contest it, the rapporteur has the possibility to submit a proposal for a "transaction" (negotiated settlement) which determines the minimum and the maximum amount of the contemplated fine. If the concerned undertaking accepts the proposal, the Authority may decide on the fine under a simplified procedure, i.e. without a prior written report. The leniency program benefits from the simplified procedure as well.

Furthermore, the new law significantly expands the investigatory powers of the French Competition Authority. Indeed, the Authority is entitled to require the communication and to obtain or take copy by all means and on any medium, of books, invoices and other professional documents of any nature, whoever detains them.

Finally, the new law modifies various control provisions, including reinforced powers in favor of the Authority to impose new injunctions when the parties to a merger had not complied with remedies commitments of an authorization decision.

French membership in the "billion euro club" of European enforcers

In 2015, the French Competition Authority imposed a total of 1.24 billion euros in antitrust fines, about 20% higher than the total for 2014 (1.01 billion euros). In 2015, out of seven fining decisions, the range of fines was considerable: from 1.14 million euros imposed upon artisanal bakers for price-fixing to 672.3 million euros imposed upon a cartel of international courier services providers. When calculating the fine of 672.3 million euros, the Authority took into account the duration of the practices concerned, their seriousness and the harm caused to the economy in particular to smaller companies, which due to their insufficient negotiating power, were the first victims of the agreement.

Furthermore, in December 2015, the Authority imposed a fine of 350 million euros on France's leading provider of telephony services, Orange, for anti-competitive behaviour with regard to rivals that use its national mobile and fixed-line networks for business customers. This is, to date, the highest fine ever imposed by the Authority against an individual undertaking. The fine was accompanied by an order to restore competition on the market.

By way of comparison, in 2014, the Bundeskartellamt imposed fines amounting to a total of 1.1 billion euros. In 2012, the European Commission imposed about 1.87 billion euros in fines, in 2013, about 1.88 billion euros, and in 2014 about 1.69 billion euros. 2015 was a downward year for the Commission: for the first time since 2012, the total amount of fines was less than the fateful "one billion euros" threshold. France's antitrust authority was thus decidedly active in 2015, levying more fines for anticompetitive behaviour than the European Commission.