17 January 2011: Antitrust fines: a public consultation is open for two months

Stakeholders are invited to comment on the draft notice

The Authority’s initiative follows up on the good practices agreed upon by the European competition authorities in May 2008¹, as well as on a report published in September 2010 by an independent mission on antitrust fines².

The good practices and the report rest on a wide consensus, both between competition authorities and among private stakeholders, on the best way to organize the fine-setting process in practice. The report has made a set of suggestions on this basis, while at the same time expressing newer ideas. In the course of its own preparatory work, the Authority has also launched a dialogue on antitrust fines with the review courts, the French Cour de cassation (Supreme Court) and cour d’appel de Paris (Paris Court of Appeal).

The publication of the draft marks the start of a wide consultation, open until March 11, 2010. All stakeholders (e.g. consumer associations and businesses, but also other competition authorities) are encouraged to contribute.

The consultation will be followed by a public roundtable, scheduled in Paris on March 30, 2010, in order to provide a further opportunity of discussing the draft.

 

Dedicated guidance will further enhance the transparency of the fine-setting process

The publication of guidance on antitrust fines is intended to foster transparency and to frame the discussion on the main elements taken into consideration in order to set the fine before a decision is taken by the Authority. The draft explains the method followed in practice by the Authority when applying the fining criteria set out by the French Code of Commerce³. It also recalls what are the main elements that can be taken into account, on a case-by-case basis, when setting the fine.

The draft, which builds on the guidelines followed by the Authority in its past decisions, is consistent with the best practices followed by other European competition authorities. This is line with the case-law of the European Court of Justice, which has held that the National Competition Authorities (NCAs), which are empowered to enforce European competition rules, must make sure that the fines imposed to that effect are consistent and effective⁴.

At the same time, the draft reflects the specificities of the French rules on antitrust fines. The main such specificity is that fines take into account the importance of the harm that an antitrust offence can cause to the broader economy as well as to consumers, including (but not limited to) an overcharge on the markets where it takes place.
 

Fines are proportionate to the circumstances of each individual case

In practice, the Authority starts by assessing the gravity of the offence and the importance of the economic harm caused thereby. On the basis of this assessment, it then sets a basic amount, which corresponds to a proportion of the value of the sales related to the infringement, in line with the practice of other competition authorities.

This proportion is defined on a case-by-case basis. It does not include an entry fee, because the Authority may be called upon to adjudicate complaints of relatively minor importance, besides the more important cases which it can decide to open on its own initiative. The basic amount of the fine can thus vary between 0 and 30% of the value of the sales related to the offence, depending on its gravity and on economic harm.

The basic amount may then be adjusted downwards or upwards, in order to take into account the individual behavior and situation of each firm. Mitigating and aggravating circumstances can be taken into consideration, as well as the fact that a firm only operates on one market (“mono-product” firm), that it is a small or medium business (SME) or that it belongs to a group. Recidivism, which according to French law is a distinct aggravating factor, is also accounted for.

The Authority then takes into account, where applicable, a discount granted on the basis of its leniency program⁵ or settlement procedure⁶. It subsequently checks that the fine does not exceed the statutory cap⁷. It may also check whether specific financial difficulties impact on a firm’s ability to pay the fine, where such a claim is made by one of the companies concerned.

Due to the specificities of some bid-rigging cases, a different method is followed by the Authority in such cases.


A balanced and flexible approach, due to be complemented by specific guidance on settlements and compliance

The draft does not dwell on all the issues that can be taken into account during the fine-setting process. It safeguards the margin of flexibility needed to fit in all the specifics of each case, and guarantees that the fine is tailored to each individual situation.

In particular, it does not cover the issue of compliance programs. Such programs may be taken into account, when they meet specific criteria, in the context of the settlement procedure set up by the French Code of Commerce. They warrant specific guidance, the preparation of which features among the Authority’s priorities.

¹ Pecuniary sanctions imposed on undertakings for infringements of antitrust law, principles for convergence, guidance document published by the ECA (association of European competition authorities) in May 2008, pursuant to a project carried out by a working group co-chaired by the French and Italian competition authorities
² L’appréciation de la sanction en matière de pratiques anticoncurrentielles, report submitted to the French Minister of Economy, Christine Lagarde, by Jean-Martin Folz, President of PSA, Christian Raysseguier, First Advocate General at the Cour de cassation and Dr Alex Schaub, Of Counsel, on September 20, 2010
³ Article L. 464-2 of the Code of Commerce
⁴ Judgment of the Court of justice of the European Union of June 11, 2009, X BV (case C-429/07)
⁵ Article L. 464-2 of the Code of Commerce
⁶ Same provision
⁷ Same provision

For more detail, please consult :

- the full text of the Authority’s draft guidance on antitrust fines

- comparative table on methods implemented by the main competition authorities to set fines

The New Year’s message also provided an opportunity of taking stock on the Authority’s action in 2010. For more details, please consult:

- facts and figures for 2010

- President Lasserre’s speech in video

> Press contact: Ingalill d’Armaillé / Tél. : +33 1 55 04 01 82 / Mail