The Autorité de la concurrence’s core function is to prevent and repress anticompetitive practices, which can have a considerable impact on the economy.
It works every day to ensure that market competition functions properly, thereby protecting consumers and businesses. This delivers lower prices, greater diversity of products and services, and an assurance for economic stakeholders that they can compete on their own merits on a level playing field.
Who can make a referral to the Autorité de la concurrence?
When economic stakeholders are in breach of competition law, a referral can be made to the Autorité by:
- the Minister of the Economy,
- local or regional authorities,
- professional bodies and chambers,
- trade unions,
- consumer organisations,
- mayors in the context of their commercial planning powers.
The Autorité can also decide to start proceedings ex officio.
Types of anticompetitive practice
There are two main families of anticompetitive practice: anticompetitive agreements and abuses of dominant position.
An anticompetitive agreement is characterised by collusion between several companies that decide to adopt similar practices and behaviour instead of developing independent commercial strategies. This collusion, which distorts market competition, is prohibited.
A distinction is made between “horizontal” agreements, which involve several competing companies, and “vertical” agreements, which involve operators on different levels in the economic chain, e.g. suppliers and distributors.
These agreements can take various forms. Here are some examples:
- agreements on prices, price rises, promotions or margins;
- division of markets or customers;
- sharing of confidential or strategic information, e.g. on market share or production costs.
The Autorité operates a leniency programme so that it can effectively detect anticompetitive agreements, and especially cartels. This programme means that, at any time, a company can report that it is part of a cartel; in exchange it can benefit from total or partial immunity from fines. The programme has enabled many cartels involving everyday products to be dismantled, for example:
- Hygiene and cleaning products
- Dairy products
- Laundry detergents
- Household appliances
- Floor coverings
Household appliances cartel
The cartel involved brands well known to the general public such as Bosch, Siemens, Hoover, Electrolux, LG, etc.
In total, nearly 70 % of the market was affected. As an example, the jointly agreed price increase was 50 euros for products costing more than 400 euros.
Abuse of a dominant position
Unlike anticompetitive agreements, which are bilateral or multilateral, abuses of a dominant position are unilateral practices on the part of a single operator, which uses its dominant position in a market to foreclose the market, exclude competitors or prevent the arrival of new entrants.
Abuses of a dominant position can take different forms:
- exclusion of competitors, as in the SNCF/railway freight (2012) case
- exploitation of the advantages of a historical monopoly, e.g. that of Engie (2017)
- loyalty rebates (terrestrial television broadcasting 2016),
- exclusivity clauses as in the zinc case (2016),
- excessively high prices, for example in the Corsican waste case (2018).
- smear campaigns on new entrants, for example in the Durogesic case (2017)
Generic medicinal products: smear campaign punished by a heavy fine
Interim measures: for acting in urgent cases
When faced with a situation requiring rapid intervention, the Autorité de la concurrence may order interim measures pending its decision on the merits of a case, where there is a serious and immediate risk to the interests of an economic sector or company.
By ordering interim measures, the Autorité can prevent any practices likely to be anticompetitive from causing serious harm to competition or to the company which is the victim, while an investigation takes place.
Urgent interim measures are ordered very quickly, generally within three to four months of referral.
Until now, the Autorité de la concurrence has had to receive a request for interim measures from the parties, incidental to the complaint on the merits of the case. However, the European ECN+ Directive, which aims to give European competition authorities the resources to enforce competition rules more effectively, will enable the Autorité to order urgent interim measures on its own initiative once the text has been transposed.
- suspension of exclusive iPhone distribution by Orange (2008)
- injunctions on Google to clarify the rules of its online advertising platform (NaVx case in 2010 and Amadeus case in 2019)
- urgent interim measures ordered on Engie concerning pricing and to force it to share its files (2014 and 2016)
What penalties can be expected for anticompetitive agreements or abuses of a dominant position?
The penalties imposed by the Autorité have two aims: to penalise the behaviour of the company in question and to deter other companies from engaging in similar practices.
Where it finds that competition rules have been breached, the Autorité can hand out fines and/or issue injunctions.
Each fine handed out by the Autorité is determined on the basis of specific details related to the case and the individual situation of each offender.
Enough to make economic stakeholders think seriously!
Criteria taken into account
To calculate the amount of a fine, the Autorité first decides a basic amount for each company or body that breached the rules. This amount is based a number of criteria, such as the size of the affected market, the seriousness of the actions and the duration of the practices.
Then the amount of the fine is adjusted upwards or downwards based on the individual situation of each company or body that breached the rules. The Autorité can adjust the fine to take account of financial difficulties within the company or whether it belongs to a large group. The Autorité can also take extenuating or aggravating circumstances into account (such as recurrence).
To give companies greater clarity, in 2011 the Autorité adopted some guidelines, which explain the method it uses to issue a fine.
The fines imposed by the Autorité between 2009 and 2019 amount to nearly 5 billion euros. These fines are paid to the State and go into the general budget, so they help to fund public spending (on schools, the legal system, hospitals, etc.).
On the basis of these decisions, the victims of anticompetitive practices can also bring actions for damages before the court with jurisdiction.
The Autorité can order the perpetrator of anticompetitive practices to cease those practices or change their behaviour to comply with competition law (by amending a clause in general conditions of sale, a contract, etc.).
If it fails to comply with an injunction, the Autorité can hand out a fine.
The Autorité has the power to order the publication in the press of a summary of the decision. The purpose of this is to alert companies in the sector and/or the general public to the harmful nature of the unlawful behaviour.
Settlement: progress for companies
When a body or company does not contest the stated objections, the Autorité’s General Rapporteur can propose a settlement fixing the maximum and minimum fine that can be handed out. This makes it easier for companies to predict their financial risk.
The settlement procedure, which replaced the old no contest of objections procedure in 2015, is already widely appreciated by companies.
Settlement has many advantages. For companies, it means a procedure can be completed more quickly, saves procedural costs and can lead to a substantial reduction in fines. For the Autorité, the use of the settlement procedure means that certain procedures can be closed more quickly, freeing up resources for other cases.
The procedure has met with growing success and was used in particular in the floor coverings cartel case, in the Engie case, and in a case concerning exclusive import contracts in overseas territories.
Commitments: building solutions jointly with companies
To quickly restore competition, the Autorité has an alternative to litigation: the commitment procedure.
Following a preliminary evaluation by the Autorité’s Investigation Services, the company can propose commitments to the Autorité that would address its competition concerns.
After running a market test (the proposed commitments are published on its website for consultation, to gather comments from interested third parties), the Autorité can accept them, sometimes after seeking certain adjustments, and close the case.
This procedure benefits everyone. The market is the primary beneficiary, because this procedure means that certain situations can be resolved much sooner. It also means the Autorité avoids the burden of a litigation investigation and it frees up resources for other cases. Finally, the company avoids being found in breach of the law and risking a fine.
Two examples of the procedure:
The Autorité obtained commitments from Nespresso that would enable other manufacturers to develop in the market and sell pods compatible with its machines.
Online hotel booking
Booking.com made commitments in 2015 to restore competition between booking platforms and give hotels greater commercial and pricing freedom.
Other categories of decision by the Autorité
- Fine for non-compliance with commitments (or an injunction), handed out in litigation cases concerning anticompetitive practices or mergers
- Fine for gun-jumping (coordination before a merger has been cleared) or for failing to notify a merger
- Sanction for breach of procedure
The Autorité can hand out periodic penalty payments to force a party to submit documents or attend meetings during an investigation. It can also apply penalties for any attempt to obstruct investigations by handing out a fine to the company, which cannot exceed 1% of the highest global pre-tax turnover achieved in one of the most recent financial years that has ended.
- Stay of proceedings for referral for investigation or pending a forthcoming event.
- Dismissal of charges if, following investigation, there is no evidence of prohibited practices or if the practices mentioned in Article L. 420-1 of the French Commercial Code (Code de commerce) do not relate to contracts made under the French Code of Public Procurement (Code des marchés publics) and the cumulative market share held by the companies or bodies engaged in the practice does not exceed a certain threshold.
- Dismissal, if the charges are not supported by sufficiently conclusive evidence.
- Inadmissibility for lack of legal interest or capacity or if the facts are time-barred or not within its jurisdiction.
Obstructing an investigation: an unwise strategy
- Obstructing the investigation of a litigation case (sending incomplete, inaccurate and out-of-time information, refusing to provide material evidence)
- Hampering dawn raids (breaking seals and altering the functioning of electronic messaging systems)
Akka Technologies (2019)
Avenues for appeal
An appeal for annulment or review may be brought within one month at the Paris Court of Appeal (cour d’appel de Paris) against the Autorité’s decisions.
Appeals are non-suspensive. The companies sanctioned must pay the fine handed out to them. In some cases, the first president of the Paris Court of Appeal may order a stay of execution if he or she believes that the decision would have excessive consequences or if new facts have come to light.
A reimbursement system exists in case the Court of Appeal’s decision is different from the Autorité’s decision.
The Court of Appeal’s ruling may in turn be appealed against before the French Supreme Court (cour de cassation) within one month of notification. This appeal is non-suspensive. The Autorité de la concurrence’s President may appeal to the Supreme Court against the ruling by the Paris Court of Appeal that annulled or reviewed a decision by the Autorité.
The Minister for the Economy may appeal to the French Supreme Court, even if he or she did not bring the main or supplementary appeal before the Court of Appeal.
If a request for urgent interim measures has been made to the Autorité, its decision may be appealed against within ten days maximum of its notification. In this case, the Paris Court of Appeal rules within one month.
All litigation related to mergers (failing to notify a merger, gun jumping, non-compliance with commitments made by companies or with injunctions) takes place before the French Administrative Supreme Court (Conseil d’État).