France Issues Guidance on Antitrust Compliance and Settlements

February 15, 2012

Following a public consultation process initiated in October 2011, the French Competition Authority (the “Authority”) released on 10 February 2012 two separate sets of guidelines—the Framework document on antitrust compliance programs[1], and the Procedural Notice on the French settlement procedure[2]—that advise companies on how to implement effective compliance programs, and on the agency’s policy with respect to settlements in antitrust cases.

Both documents aim to ease the process of setting up a compliance program and remind the market operators of the importance of antitrust compliance. Indeed, companies currently face greater antitrust exposure than ever before as fines issued by the Authority continue to escalate and private enforcement (civil litigation brought by alleged victims of anticompetitive conduct) is actively promoted in France and beyond.

Framework document on antitrust compliance programs

The Framework document sets out the Authority’s views on how to create an effective competition law compliance program. In this respect, the compliance program must feature the following five key elements:

  • the existence of a clear, firm and public position adopted by the company’s management bodies, and more broadly by all managers and corporate officers, to commit to comply with competition law and to support the company’s compliance program;
  • the commitment to empower someone within the company or organization to be in charge of implementing and overseeing the compliance program, with the necessary autonomy and means to fulfill this role;
  • the commitment to implement effective information, training and awareness measures in order to spread and maintain a competition compliance culture at all levels, from the top management to each member of the staff of the company;
  • a commitment to set up effective control, audit and whistle-blowing mechanisms; and
  • a commitment to implement an internal reporting mechanism, and follow-up and disciplinary measures in the event of any detection of a violation of competition rules or of a breach of the company's compliance program.

The Authority is aware that a compliance program has to be tailored according to the means and resources at the company's disposal. Yet, the Authority stresses that it is important for all companies to be able to set up such a program, regardless of their size and resources.

As expected, and mirroring the position adopted by the European Commission in its “Compliance Matters” brochure published in November 2011[3], the Authority indicated that the fact that a company has a compliance program in place will not prevent a finding of an antitrust infringement, nor will it serve as a mitigating, or aggravating, factor when setting an antitrust fine.

While many may regret that the Authority did not provide any specific reward for a company to establish a compliance program, the Authority has taken into account some of the comments submitted during the public consultation. In this respect, the Authority has provided that having a compliance program may be of benefit with respect to its investigations into vertical agreements and abuses of dominant positions, which are traditionally not eligible for leniency. Accordingly, in the event that an undertaking which has implemented a compliance program comes to discover a misconduct that is not eligible under the leniency program, if it can prove, before any inspection or investigation is conducted by a competition authority, that it has ceased and redressed on its own volition the misconduct, such a circumstance may be considered a mitigating circumstance in the event that the Authority comes to handle the case and impose a penalty against the company.

In addition, where a company does not challenge the charges notified to it in antitrust proceedings, and where it commits to set up a compliance program with the above-mentioned components, or to improve an existing compliance program, the Authority may grant a fine reduction of up to 10%[4] (see below).

Procedural Notice on the French settlement procedure

The Notice on the French settlement procedure formalizes the Authority’s practice developed since 2001. Under the French settlement procedure, the Authority can reduce the fine imposed on a party by 10% where it acknowledges having participated in an antitrust infringement. This includes cartel and other horizontal or vertical agreements, as well as abuses of dominance (in contrast, the European settlement procedure only applies to cartel cases).

The aim of the French settlement procedure is to simplify and shorten antitrust investigations, as well as to reduce the number of decisions that are appealed to the French Courts, thus allowing the Authority to handle more cases. This is in response to a trend in recent years whereby parties have often appealed the Authority’s decisions with the sole objective of achieving a reduction in fines, rather than to challenge the substance of the decisions made against them.

The notice explains how to implement this settlement procedure and provides increased transparency as to the Authority’s process. It explains how the Authority takes into account the settlement procedure and any commitments they make to change their behaviour in the future.

In relation to such commitments, the Procedural Notice specifies that companies that request a settlement can also commit to amend their behaviour in the future in a variety of ways, in return for an additional fine reduction of between 5% to 15%. In this respect, the Procedural Notice recalls that companies may commit to set up a compliance program, which may result in a fine reduction of up to 10% (see above).

Finally, following the Authority’s decision adopted in December 2011 regarding a cartel in the field of detergents[5], and in line with some of the comments raised during the public consultation, the Authority formalizes the possibility for companies, if the General Rapporteur deems it appropriate, to combine the benefits of the leniency procedure with those of the settlement procedure. This may apply, in particular, if the objections notified to the company in question differ on one or more significant aspects from the content of its leniency application (i.e. the company would be entitled to the fine reduction under the settlement procedure for the objections not covered by its leniency application).

[1] See http://www.autoritedelaconcurrence.fr/doc/framework_document_compliance_10february2012.pdf.
[2] See http://www.autoritedelaconcurrence.fr/doc/communique_ncg_10fevrier2012.pdf.
[3] See http://ec.europa.eu/competition/antitrust/compliance/compliance_matters_en.pdf.
[4] To this reduction may be added other reductions available in the framework of the settlement procedure, for a total of up to 25%, as mentioned by the Authority’s Procedural Notice on that matter.
[5] See http://www.autoritedelaconcurrence.fr/pdf/avis/11d17.pdf.