Colloque l Concurrences N Laurence IDOT

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1 Concurrences Revue des droits de la concurrence Competition Law Journal Colloque Mannheim June 2013 HOW HAS REGULATION N 1/2003 AFFECTED THE ROLE AND WORK OF NATIONAL COMPETITION AUTHORITIES? THE FRENCH EXAMPLE Colloque l Concurrences N Laurence IDOT laurence.idot@sfr.fr l Professeur à l Université Paris II Panthéon Assas Collège européen de Paris

2 Colloque Laurence IDOT Prof. Dr. University Panthéon-Assas (Paris II) Member of the College Autorité de la Concurrence (FR) Abstract Once Regulation n 1/2003 was adopted, unlike in most other Member States, no major reform occurred in France. No change in the substantive rules was needed, as French antitrust rules were already very similar to articles 81 and 82 EC. As far as public enforcement was concerned, both competition authorities were appointed as the French members of the European Competition Network according to article 35 of Regulation. Only procedural adaptations to facilitate the participation of the French authorities in the network and to take into consideration articles 12, 13 and 22 of the Regulation were needed. A new ordinance was adopted in November It was later implemented by a decree of December The procedural adaptations necessary for the courts, mainly to implement and further define article 15 of the Regulation, were made in the latter decree, and were detailed in a circular adopted by the Ministry of Justice in May The specialisation of civil and commercial courts previously decided in 2001 became effective following another decree of December Ten years later, there is a kind of French paradox, since the changes, which can be observed, are huge. Thanks to Regulation n 1/2003, we have experienced a real revolution. This claim will be substantiated in three steps. It is necessary to begin with a technical legal approach before examining the institutional consequences and concluding with a broader policy perspective. Lors de l adoption du règlement n 1/2003 et contrairement à la plupart des autres États membres, aucune réforme majeure n a eu lieu en France. Aucun changement n était nécessaire sur le fond, les règles françaises de concurrence étant déjà très similaires aux articles 81 et 82 CE. En matière d exécution publique, les 2 autorités françaises de la concurrence ont été nommées en tant que membres français du réseau européen de la concurrence conformément à l article 35 du règlement. Seules des adaptations procédurales ont été nécessaires pour faciliter la participation des autorités françaises dans le réseau et pour mieux prendre en considération les articles 12, 13 et 22 du règlement. Une nouvelle ordonnance a ainsi été adoptée en novembre 2004 et mise en œuvre par un décret de décembre Ce décret a également permis l adaptation procédurale des juridictions. La spécialisation des juridictions civiles et commerciales, déjà décidée en 2001, a été mise en place à la suite d un autre décret de décembre Dix ans plus tard, nous faisons face à un paradoxe français, les changements observés depuis l adoption du règlement étant énormes. Grâce au règlement n 1/2003, une véritable révolution a eu lieu. Cette affirmation sera étayée en trois points. Il est nécessaire de commencer notre étude par une approche technique et juridique avant d examiner les conséquences institutionnelles puis de conclure sur un point de vue politique plus large. * Article présenté lors du colloque sur les Dix ans du règlement n 1/2003 organisé par le Pr. H. Schweitzer, Mannheim, 6/7 Juin 2013 et précedemment publié dans : Neue Zeitschrift für Kartellrecht, 1/2014, pp Colloque Mannheim June 2013 HOW HAS REGULATION N 1/2003 AFFECTED THE ROLE AND WORK OF NATIONAL COMPETITION AUTHORITIES? THE FRENCH EXAMPLE * Introduction 1. To begin with the topic and without going back to the origins, it is useful to give a quick view on the history of French competition law. A major reform occurred in 1986 with the adoption of the ordinance of 1 December 1986 on freedom of prices and competition 1. In the field of antitrust, the substantive rules, which were based on the prohibition of both anticompetitive agreements and abuses of a dominant position, were maintained. The main changes were of an institutional nature. A dualist system was established. A new independent administrative authority le Conseil de la concurrence (hereinafter, the Conseil ) was created and empowered to adopt decisions and to fine undertakings for infringements. However, the Ministry of Economy (hereinafter, the MECO ), through its specialised services la DGCCRF kept an important role and remained in charge of competition law inquiries. Both competition authorities were entitled to apply EC competition rules and, a few months after the entry into force of the new system, a major decision was adopted in the so-called Cosmetics case 2. In the 1990s, the power of the French competition authorities to apply articles 85 and 86 of the Treaty of Rome (later re-numbered as articles 81 and 82 EC) was confirmed by a specific provision of a 1992 law 3. An average of 4 to 6 parallel applications of French and EC law per year, out of an average of thirty prohibitions decisions and one hundred final decisions, could be observed When the discussion on the modernisation of EC competition policy began at the end of the 1990s, France was on the whole in favour of the reform; the White Paper 5 was welcomed. This is easy to explain. The so-called directly applicable exception system had always been the rule in France since the introduction of the first prohibition of anticompetitive agreements in Furthermore, no distinction in horizontal and vertical agreements was made in the French law, and following the case law of the Court of Justice, the French Supreme Court decided to apply the prohibition to vertical agreements at the beginning of the 1980s in the famous Perfumes cases 6. 1 Ord. n , 1 Dec. 1986, art. 7 & 8, now art. L et L Commercial code, FR OJ, 9 Dec. 1986, p All French texts are available on the website ; see also for texts in competition law, the website of the French Competition Authority, Following the new codification of commercial rules, the text became, in 2000, book IV on freedom of prices and competition of the new Commercial Code (legislative part. Art. L to L , completed by a regulatory part, art. R to R ). 2 Cons. Conc., dec. 87-D-15, 9 June Ord , art. 56 bis, modified by L. n , 11 Dec. 1992, FR OJ, 12 Dec. 1992, now art. L Commercial Code. 4 For a review of these decisions, see, J-B. Blaise, L. Idot, chron. Concurrence, in Rev. trim. dr. eur., 1995, n 4 p.859, 1996 n 4, p.747, 1997 n 3, p. 459, 1999, n 2, p.271, 2000, n 4, p.741, 2002, n 1, p.103, 2003, n 2, p. 287, 2004, n 4, p White paper on modernisation of the rules implementing articles 85 and 86 of the EC Treaty, Commission programme no 99/027, 28 April Case 253/78 and 1 to 3/79, ECJ, 10 Jul. 1980, Bruno Giry & alii, ECR 2327; Cass. Crim., 3 Nov. 1982, La Semaine juridique - édition générale I Concurrences N I Colloque 2 Colloque Mannheim June 2013

3 However, some concerns were expressed regarding the issue of the relations between EU and national rules, but for opposite reasons. As an academic, I feared a renationalisation of EC rules because of the French context and the weak previous experience in the application of these rules 7. The French government, for its part, expressed groundless fears on the future of a specific branch of the French competition law, title IV on restrictive business practices 8. For this reason it opposed to the Commission s proposal of September 2000 in favour of a one-stop system in the field of antitrust 9. However, the final compromise, as formulated in article 3 of Regulation n 1/2003, was considered acceptable Once Regulation n 1/2003 was adopted, unlike in most other Member States, no major reform occurred in France. No change in the substantive rules was needed, as French antitrust rules were already very similar to articles 81 and 82 EC. As far as public enforcement was concerned, both competition authorities the Conseil and the MECO were appointed as the French members of the European Competition Network according to article 35 of Regulation. Only procedural adaptations to facilitate the participation of the French authorities in the network and to take into consideration articles 12, 13 and 22 of the Regulation were needed. A new ordinance was adopted in November It was later implemented by a decree of December The procedural adaptations necessary for the courts, mainly to implement and further define article 15 of the Regulation, were made in the latter decree, and were detailed in a circular adopted by the Ministry of Justice in May The specialisation of civil and commercial courts 14, previously decided in , also became effective following another decree of December L. Idot, «The White Paper: coherence. A French Point of View on the Radical Decentralisation of the Implementation of Article 81(1) and (3)», in European Competition Law Annual 2000: the Modernisation of EC Antitrust Policy (C-D. Ehlermann & I. Atanasiu, ed.), Oxford, Hart Publishing, 2001, pp For discussion, see «La modernisation des règles de concurrence européennes», Competition Workshop MECO, May 2001, Rev. Conc. cons., n 122, July-Aug The government s position was unfounded since so-called «restrictive business practices» covered by title IV, book IV of the Commercial Code are not forms of anticompetitive conduct but unfair practices. 9 L. Idot, «Le futur règlement d application des articles 81 et 82 CE : chronique d une révolution annoncée», Dalloz, For a summary of the discussion in a French perspective, L. Idot, Droit communautaire de la concurrence - Le nouveau système communautaire de mise en œuvre des articles 81 et 82 CE, Bruylant, Ord. n , 4 Nov. 2004, FR OJ, 5 Nov. 2004, p Decree n , 27 Dec. 2005, FR OJ, 29 Dec. 2005, p Another decree was adopted the same day to modify the procedural rules on the review of the decisions. 13 Decree n , supra, art. 12. Adde, Min. Justice, circular 22 May 2006, Off. Bull. Min. Just., 2006, n In the French system, administrative courts may also apply antitrust rules and draw the so-called civil consequences of infringements, for example by declaring the nullity of an administrative agreement or giving damages to victims of anticompetitive practices. 15 Art. L Com. code, modified by L. n , 15 May 2001, FR OJ, 16 May 2001, p Decree n , 30 Dec. 2005, FR OJ, 31 Dec. 2005, p Ten years later, there is a kind of French paradox, since the changes, which can be observed, are huge. Thanks to Regulation n 1/2003, we have experienced a real revolution. This claim will be substantiated in three steps 17. It is necessary to begin with a technical legal approach before examining the institutional consequences and concluding with a broader policy perspective. First point: Application of Regulation n 1/2003 in individual cases; Second point: Consequences for the French Authority; Third point: Consequences for competition policy. I. Application of Regulation n 1/2003 in individual cases 5. Two assertions summarise the present situation in France. We may observe both a full application of articles 101 and 102 TFEU (I.1) and a full use of cooperation tools (I.2) I.1. A full application of articles 101 and 102 TFEU 6. The starting point here is article 3, 1 of Regulation n 1/2003 and the duty to apply articles 101 and 102 TFEU in cases where an alleged infringement may affect trade between Member States. 7. Statistics are useful to begin with. Since 1 May 2004, the French competition authorities have always been the leading NCAs within the ECN insofar as the application of article 11, 3, and 11, 4 of Regulation n 1/2003 is concerned. By the end of July 2013, 219 new cases and 94 envisaged decisions had been notified to the Commission, which may be compared to the 230 new cases of the Commission itself 18. This means that an average of 60% of the cases of the French competition authorities have been examined under both EC/ EU law and French law. More precise statistics concerning cases decided since 2009 appear below For previous studies in a more general perspective, see Ch. Lemaire, «Bilan du règlement n 1/2003», in Une année charnière en droit de la concurrence? AFEC, 5 Feb. 2009, Les Petites affiches, 17 Dec. 2009, n 251, p. 38; L. Idot, «Regards sur le règlement n 1/2003», Etudes à la mémoire de F- C. Jeantet, Paris, Lexisnexis, 2010, pp These statistics are available on the website of the DG comp.: competition/ecn/statistics.html. 19 The following data are not official, since there is no distinction according to the applicable law in the annual reports of the French Competition Authority. The year 2009 has been chosen because the new French Competition Authority (Autorité de la concurrence) began to work on 2 March 2009, but the report for the year 2009 also covered January and February (and thus for that time period covered the activities of the Conseil). Concurrences N I Colloque 3 Colloque Mannheim June 2013

4 Autorité de la Concurrence Prohibitions Commitments No grounds EU/Total /15 2/5 3/ /12 5/7 6/ /8 3/5 0/ /10 4/6 1/ /8 1/1 1/1 These numbers may be compared to those of the now-defunct Conseil following the entry into force of the Regulation 20. Conseil de la concurrence Prohibitions Commitments /12 0/ /24 7/ /13 3/ /31 2/2 8. From a practical point of view, for the application of article 11, 3, Regulation n 1/2003, there is an early prima facie assessment of the applicability of articles 101/102 TFEU for all new opened cases, which is done by the Investigation Services of the French Authority, at the beginning of the procedure. In the end, it is up to the College to confirm the existence of an effect on trade between Member States. As soon as there is a discussion on the merits in the final decision 21, the decision is motivated at the beginning of the legal assessment on the applicability of EU law. In 2006, the Conseil started to develop an analysis in three phases, and this approach is now systematically followed. An interesting application of the requirement of an effect on trade may be found in several decisions on overseas territories. The discussion only arises when there is a practical or procedural issue at stake, such as the application of article 22 of Regulation n 1/2003 (inspections by NCAs) 22, or the liability of the parent company for acts of the subsidiary 23. For the application of article 11, 4 of the Regulation, since there is a clear-cut distinction between the Investigation Services and the College, it is not possible to send any draft of the final decision. The Commission is only informed via a note of the position adopted by the Investigation Services in the so-called rapport, which is the last written document 20 For procedural reasons due to the transitional period, it is not useful to include the year The motivation on the effect on trade between Member States is found in all prohibition decisions and commitment decisions, but also in «no grounds» decisions. It may also be observed in some decisions on interim measures. 22 Cons. Conc., dec. 08-D-30, 4 Dec. 2008, «Kerosene case», CA Paris, 24 Nov. 2009, Cass. com., 1 March 2011, CA Paris, 28 March All the decisions since 1991, together with the decisions of the review courts where applicable, are available in full text on the website of the Competition Authority. There are some press releases, also available in English, for the most important ones. 23 Comp. Auth., dec. 09-D-36, 9 Dec. 2009, «Orange Caraïbe case», CA Paris, 23 Sept. 2010, Cass. com., 31 Jan. 2012, CA Paris, 4 July in which the Investigation Services express their position after two rounds of adversarial exchanges 24. Though it is not compulsory, the French Authority also relies on article 11, 5, to submit some information on so-called closed cases, that is to say decisions in which EU law is applicable, but which are not prohibition or commitments decisions and therefore are not covered by article 11, 4 25, such as no grounds decisions. 9. External observers may be surprised by these results, since a competition culture does not belong to the French historical tradition. The explanations are twofold, both cultural (French centralisation) and legal. Firms often perceive the French Authority as a kind of specialised court. In French competition law, it is quite easy to file a complaint, and once the complaint is declared admissible, which is decided on objective grounds, the complainant is a party with the same rights as the presumed infringers. Furthermore, there is a legal duty for the Authority to consider all complaints filed. It is not entitled to act according to a principe d opportunité des poursuites passive. It only has the power to initiate investigations ex officio ( principe d opportunité des poursuites active ). 10. To conclude this point, three remarks of a qualitative nature should be made. First, in practice, the influence of EU law is still more important. Even when there is no effect on trade between Member States, EU rules are used as a guide d analyse utile to interpret French provisions. This may be observed particularly in the field of distribution agreements, but not only 26. Second, thanks to this system, the Authority has to deal with new and interesting issues. A first example was given with the interpretation of the requirement of an effect on trade in overseas territories in the Orange Caraïbes case 27. There are also a lot of examples dealing with substantive aspects. As far as the application of article 101 TFEU is concerned, it is possible to mention for horizontal agreements, such as cooperation agreements, the Expédia case and the interpretation of the de minimis rule 28. In the field of vertical agreements, the Authority (then the Conseil) was the first to deal with the relation between internet sales and selective distribution, in particular in the famous Pierre Fabre case 29. We also have a very detailed case law on the application of 24 On the French system, see L. Idot, «Due process and the art of fining: The French example», XVIIIth ICF Conference, St Gallen, April 2011, Concurrences n , art. n The Commission no longer provides statistics on «closed cases». For France, some information may be found in the annual report of the Competition Authority, in the part called «Rapport d activité». 26 See, L. Idot, «La pratique de l Autorité française concurrence en matière de relations verticales», Revista Concorrencia e Regulaçao, , pp et Concurrences, n , art. n Comp. Auth., dec. 09-D-36, see supra. 28 Comp. Auth., dec. 09-D-06, 5 Feb. 2009, CA Paris, 23 Feb. 2010, Cass. com., 10 May 2011, and thereafter ECJ, case C-226/11, 13 Dec. 2012, Cass. com., 16 April Cons. Conc., dec. 08-D-25, 29 Oct. 2008, CA Paris 29 Oct. 2009, and thereafter ECJ, case C-439/09, 13 Oct. 2011, CA Paris, 31 Jan Concurrences N I Colloque 4 Colloque Mannheim June 2013

5 article 102 TFEU in liberalised sectors 30. For instance, the Authority was the first to decide on the specific issue of peering in telecoms 31. Third, to my knowledge, the French Authority (i.e., the Conseil and its successor) is the only one that has decided on arguments raised by undertakings concerning the application of article 101, 3 TFEU. So far, most decisions have concluded that the four conditions were not met 32, but one positive analysis was conducted in the Treatment of checks for encashment case for ancillary fees in A very long motivation on each of the four conditions can also be found in the recent decision of the Paris Court of Appeals in the Pierre Fabre case following the decision of the Court of Justice 34. This is also a good example of the full use of cooperation tools. I.2. A full use of all cooperation tools 11. A distinction has to be made between cooperation within the ECN 35 and cooperation with the French courts. I.2.1. Cooperation within the ECN 12. Within the ECN, the first issue concerns the possible reallocation of cases. So far, it has been used only in vertical relations with the Commission, but it has worked in both directions, ascending in the Wanadoo case 36 and the car glass case 37, for example, and occasionally descending, as in the temporary work case 38. Maybe it is more interesting to observe that the ECN now has to face some new types of related cases. In vertical relations, one good illustration is the detergents case, with two parallel procedures, one before the Commission 39, the other one before the French Authority 40. In horizontal relations, we may refer to the flour cases, with several infringement proceedings not only before the French Authority 41 but also before the Bundeskartellamt, the NMa (now the Authority for Consumers and Markets) and the Belgian Competition Council (now the Authorité belge de la concurrence). In these situations, some products and/or undertakings are 30 L. Idot, «L autorité de la concurrence, régulateur des industries de réseaux?» Mélanges en l honneur de D. Tricot, Dalloz/Litec, 2011, pp Comp. Auth., dec. 12-D-18, 20 Sept. 2012, also available in English. 32 See, for instance, the I-phone case, Cons. Conc., dec. 08-MC-01, 17 Dec Comp. Auth., dec. 10-D-28, 20 sept. 2010, also available in English. 34 CA Paris, 31 Jan. 2013, v. supra. 35 See the last chapter of the «rapport d activité» in each annual report of the Competition Authority since Case COMP.38916, Comm. dec. 18 May 2004, and CFI, T-339/04 and T-340/04, 2 Dec., 8 March 2007, ECR II- 521 and II Case COMP.39125, Comm. dec. 12 Nov Cons. Conc., dec. 09-D-05, 2 Feb. 2009, CA Paris, 26 Jan. 2010, Cass. com., 29 March Case COMP.39579, Comm. dec. 13 April Comp. Auth., dec. 11-D-17, 8 Dec Comp. Auth., dec. 12-D-09, 13 March common but there is no bis in idem issue, as the infringements are deemed to be different. 13. The French Authority has also quite often used investigation tools and provisions on exchange of information. From 2006 to mid-2013, the Authority received 3 requests for the application of article 22, 1 of Regulation 1/2003, and made 7 requests. One famous example is the Airfuel case, in which the Authority asked the OFT to make some inquiries at the legal headquarters of the petroleum companies in London. The French judicial review courts confirmed the legality of the use of that provision 42. As far as article 12 on exchange of information between members of the ECN is concerned, the Authority received 8 requests and made 9 requests. I.2.2. Cooperation with courts 14. Only one article of Regulation 1/2003, article 15, deals with cooperation with courts 43, and it makes no difference between what can be called ordinary courts, which are in charge of private actions, and the judicial review courts which hear appeals against the administrative decisions of the NCAs. This is confusing. In 2006, the French Ministry of Justice adopted a circular to explain the different provisions 44., but, as far as ordinary courts are concerned, it s clearly a failure. No use of article 15, 1 was made in France; and 2 is not respected 45. It is only possible to identify the first application of 3 by the Commission in the Garage Gremeau case 46, which raised a difficult issue of articulation between qualitative and quantitative selective distribution. Paradoxically, article 15 is used more by review courts. Most of the decisions transmitted to the Commission pursuant to 2 are adopted by the Paris Court of Appeals acting as the review court in relation to the Authority s antitrust decisions. Furthermore, the Commission has already intervened three times following 3 either before the Court of Appeals in the Pierre Fabre case 47, before the Supreme Court in the Orange Caraïbes case 48, and more recently in the Treatment 42 Dec. 08-D-30, see supra. 43 On this text, see E. Claudel, «La procédure d amicus curiae : Bilan en demi-teinte de la pratique européenne et française», Concurrences, n , p. 38; L. Idot, «La coopération entre la Commission et les juges nationaux en droit de la concurrence», Rev. aff. eur. 2009/2010, n 1, p See supra decisions have been notified. Most of them, mainly for the five last years, have been adopted by the Paris Court of Appeals or the Cour de Cassation when reviewing the Authority s decisions. 46 Cass. com., 28 June The Commission s observations are available at ec.europa.eu/competition/court/amicus_curiae_2006_gremeau_fr.pdf, and thereafter, Paris CA, 7 June See supra. The Commission s observations are available at competition/court/amicus_2009_pierre_fabre_fr.pdf. 48 See supra. The Commission s observations are available at competition/court/amicus_curiae_2011_orange_caraibe_en.pdf. Concurrences N I Colloque 5 Colloque Mannheim June 2013

6 of checks for encashment case 49. In these last two cases, the Authority has requested the help of the Commission to support its position either to assert the applicability of EU law or to confirm the definition of a restriction by object. In Pierre Fabre, the Commission was in favour of a preliminary ruling, which was in fact submitted to the ECJ by the Court of Appeals. II. Consequences for the French Authority 15. Regulation n 1/2003 has real and important institutional consequences. It made possible the creation of a new authority endowed with new powers (II.1) and new tools (II.2). II.1. A new Authority 16. From 1 May 2004 to 2 March 2009, Regulation n 1/2003 was applied in France within the old dualist system set up in The share of work between the Conseil and the Ministry of Economy was not affected, and both were members of the ECN. The new responsibilities of the Conseil only led to a minor internal reorganisation with the creation in 2006 of new services, such as the services of the President and the economic service, and the strengthening of the legal service. A major institutional reform was introduced in August and entered into force on 2 March The Conseil became the Autorité de la concurrence (hereinafter, the Autorité ) 51. The official court/amicus_2009_pierre_fabre_fr.pdf. and main aim of the reform was the modernisation of merger control and the transfer of power from the Ministry of Economy to the Autorité. However, it is quite clear that this important reform would not have been possible without the modernisation of antitrust at the EU level. The success of the Autorité within the ECN was a crucial factor contributing to the launch of the reform. 17. The reform has mainly enlarged the powers of the Autorité, not only in the field of merger control 52, but also in the field of antitrust. For the application of the rules in 49 See supra. The Commission s observations are not yet available. 50 L. n Aug on the modernisation of economy (LME), FR OJ, 5 Aug. 2008, p The law was completed by ordinance n , 13 Nov. 2008, FR OJ, 14 Nov. 2008, text 8, and decree n , 26 May An official presentation of the reform may be found on the website of the Authority ( article=1079; in English, standard.php?id_rub=317; and mainly, annual report 2008, La réforme de la régulation de la concurrence, pp ; adde, B. Lasserre, «La nouvelle Autorité de la concurrence», Interview, Concurrences n «The new French competition law enforcement régime», Comp. L. Int., Oct. 2009, also available at standard.php?id_rub=218. See also, for an academic presentation, L. Idot, Ch. Lemaire, «Le nouveau visage de la régulation de la concurrence en France. L Autorité de la concurrence entre deux Europe», La Semaine Juridique, éd. G, 2009, I.125. Court of October 1999, which prevented the case handler (i.e., the rapporteur) to be present when the College discussed a case. However, the 2008 reform went further by introducing a full separation between the investigation phase and the decision phase. 52 Art. L to L , Comm. code. individual cases, the Autorité has kept all its previous powers to examine and decide cases 53, but it has acquired its own means of investigation and is no longer dependent on the MECO, as it was in the past 54. The former Conseil also had an important advisory role, mainly for the Government, but also for any designated entities. The Autorité has kept its traditional advisory role 55, but it is now entitled to give an opinion ex officio 56. The consequences for the application of EU antitrust rules are quite clear. From a legal point of view, the Autorité is now the only French member of the ECN 57 and all cooperation mechanisms set up by the Regulation are only applied within the Autorité, including article 22 on inquiries. 18. The structure of the Autorité has remained quite similar to that of the old one 58. However, the reform has also had some consequences for the internal organisation of the authority. The two main objectives are: greater efficiency and better respect for due process. As far as the first objective is concerned, the reform required substantial changes in the material and human means. The number of case handlers has substantially increased and the investigation services have been fully reorganised under the full responsibility of the general reporter, helped by adjunct general reporters 59. The most recent innovation was the creation in September 2011 of a leniency adviser 60. To improve respect for due process, a full functional separation has been established between the investigation phases and the decision making process for prohibition decisions 61. Furthermore, a new position of hearing officer has been created 62. However, its role and powers are quite different from those of the EU hearing officer. The French hearing officer has no power to decide. He is only a kind of procedural expert. 19. At the end, the reform has also had an impact on the review process. In the French hybrid system, the competition authority was not qualified as a party before the judicial review courts and could not defend its decisions as the way any other administrative authority does. The 2008 law entitled the President of the Autorité to ask for a review of the Paris Court of Appeals decision before the Supreme 53 Art. L and L 462-6, Comm. code. 54 On the inquiries, see art. L to L 450-8, Comm. code. 55 Art. L to L Comm. code. 56 Art. L Comm. Code. 57 Some academics have debated this conclusion (C. Barreau, «La participation française au Réseau européen de concurrence», Contrats concurrence consommation, Oct. 2011, étude 10), but the official position is quite clear. 58 Art. L to L Comm. code. 59 See the organigramme on the website of the Autorité: fr/doc/organigramme_aout13.pdf. 60 See article= The change began at the beginning of the decade following a decision adopted by the French Supreme 62 Art. L al 4 and art. R Comm. code. Concurrences N I Colloque 6 Colloque Mannheim June 2013

7 Court 63, but there were no transitory measures and nothing to allow the Autorité to act as a party before the Court of Appeals. The famous Steel case in January illustrated the drawbacks of the system. The President could not ask for the Supreme Court to review the surprising judgment of the Court of Appeals on the fining of a hardcore cartel, and the Ministry of Economy for its part refused to make such a request. This type of issue was finally resolved by the Court of Justice in the Vebic case, but the latter judgment, adopted at the end of 2010, came too late 65. The French government has taken into account the Vebic judgment, and changes were introduced in the Commercial Code in Our system is now compatible with the requirements imposed by that jurisprudence. II.2. Some new tools 20. The Autorité may also be considered as a new competition authority in the sense that its way of working has changed following the Regulation n 1/2003. This change began before the 2008 reform. Two points deserve attention. II.2.1. Introduction of negotiated procedures before the Autorité 21. The first one point concerns the development of so-called negotiated procedures, which were not conceivable in the 1986 system, since the Conseil functioned like a kind of specialised court. Without examining these negotiated procedures in a detailed way, two observations can be made. 22. The commitments procedure was introduced in November 2004, as a direct consequence of article 5, 1 of the Regulation 67. Although this negotiated way of dealing with competition issues was unthinkable previously in antitrust matters, the French government considered that article 5 should be interpreted as establishing a duty for the NCA to adopt such types of decisions. The procedure may be used for the same types of presumed anticompetitive practices (mainly vertical restraints, unilateral conduct), but there are some procedural differences between commitment procedures at EU level and the French rules. In French law, it is not possible to use the commitments procedure after the statement of objections is issued. The Autorité has made extensive use of the commitments procedure 68. As of this writing, 47 final decisions have been adopted and 1 market test is pending in a case relating to interchange banking fees. 63 Art. L al. 4 Comm. code. 64 CA Paris, 19 Jan. 2010, reducing the fines imposed on a steel cartel by decision 08-D-32, 16 Dec Case C-439/08, ECJ, 7 Dec. 2010, ECR I Art. R Comm. code, modified by decree n , 29 June Art. L I and R Comm. Code, modified by ordinance n , 4 Nov See, on the website of the Autorité, standard.php?id_rub= The Regulation also had consequences for other negotiated procedures which already existed in French law before its adoption but were not used. These procedures began to be used only afterward as the system introduced by the Regulation, and with it the ECN, became institutionalised. Leniency is the first example. It was introduced in France in a May 2001 reform modelled on the first EU Leniency Notice of July 1996, but it didn t work 69. The first applications for leniency were made only after 2004 because the firms feared they would be investigated by the Autorité even if they were suspected of participating in an international cartel (i.e., in a cartel whose principal effects materialised outside of France). The Autorité pushed very actively within the ECN for the adoption of the Model Leniency Programme of 29 September It used the vagueness of the French legislative framework to adapt its leniency programme in order to fit the latest developments in this field 71. To date, the Autorité has received more than sixty applications, but has only adopted seven decisions on the basis of those applications 72 : the first one in 2006 in the so-called doors case 73, the last one in May 2013 in the commodity chemicals case 74. The most recent decisions are quite interesting because they raise new issues, either on the sharing of work within the ECN 75, or on the interpretation of article 101 TFEU 76. Appeals are still pending. The settlements procedure (in French, non contestation des griefs, no contest of objections), which was also introduced in May , is another example. The title settlements is confusing since there are some major differences with the EU cartel settlement procedure introduced in In both cases, the parties may obtain a fine reduction of 10 %. However, the scope of the French procedure is different since it is not limited to hardcore cartels but rather covers any anticompetitive practice including unilateral conduct. The parties waive their right to challenge the objections after the statement of objections is issued. A combination with behavioural commitments is possible and may lead to a further reduction of the fine. Finally, in some specific instances, a combination with leniency is possible, but this is not always the case 79. So far, 37 non contestation decisions 69 Art. L III and R Comm. Code, modified by law n , 15 May See Ch. Lemaire, «La clémence : nouvelle étape de la convergence en Europe», Europe, Dec. 2006, study L. Idot, «Les programmes de clémence. L entrée dans la phase III», RJEP, mars 2007, «Les procédures de clémence et le droit de la concurrence», in La clémence et le droit (J.M. Jude, ed.), Economica, Paris, 2011, p See the list at rub=292&id_article= Cons. Conc., dec. 06-D-09, 11 April Comp. Auth., dec. 13-D-12, 28 May See Comp. Auth., dec. 11-D-17 (detergents case) and 12-D-09 (flour case), op. cit., supra. 76 Dec. 13-D-12, op. cit. 77 Art. L III Comm. code, modified by law n , op. cit. For a general presentation, see rub= Commission Regulation (EC) No 622/2008 of 30 June 2008, amending Regulation (EC) No 773/2004, as regards the conduct of settlement procedures in cartel cases, OJEU, n L 171, 1 July See, dec. 11-D-17, op. cit. Concurrences N I Colloque 7 Colloque Mannheim June 2013

8 have been adopted 80. The procedure was used frequently at the beginning, in ; then its use seemed to decline following the introduction of the commitments procedure, but it is now again regularly employed. 24. All these procedures were created by acts of a legislative nature, but they are explained by texts of soft law. II.2.2. Adoption by the Autorité of soft law 25. In the past, the Conseil worked as a kind of specialised court. Most cases were brought before it either by the Ministry of Economy, or by complainants, and it did not often use its power to act ex officio in individual cases, mainly for lack of means. In this context, it was reluctant to develop soft law, which was considered to be an activity for the Ministry of Economy. Soft law was used in other fields such as merger control and restrictive practices (the French terminology for unfair commercial practices) under title IV, but not in antitrust 81. A change clearly occurred after As the legislative framework for the new negotiated procedures was unclear or insufficient, it was deemed useful to provide firms with more details about the way it should work. The first step was taken in 2006 with the adoption of the first procedural notice (communiqué de procédure) on leniency programmes, which was published the same day as the first individual decision in the doors case 82. The adoption of the Model Leniency Programme required an adaptation to the notice in Another procedural notice on commitments was adopted in April In 2009, the new Autorité readopted the existing texts of soft law in the field of competition, making only procedural adaptations required by the reform 85. Later, in , the Autorité decided to extend the process and to adopt a procedural notice for the settlements (non contestation) procedure. 80 See the list at 81 For a global perspective, L. Idot, «A propos de l internationalisation du droit. L exemple de la soft law en droit de la concurrence», in Mélanges en l honneur de H. Gaudemet- Tallon, Paris, Dalloz, 2008, and Concurrences n , art Communiqué de procédure du 11 avril 2006 : le programme de clémence français, available at 83 Communiqué de procédure du 17 avril 2007 relatif au programme de clémence français, available at 84 Communiqué de procédure du Conseil de la concurrence du 3 avril 2008 relatif aux engagements en matière de concurrence, available at fr/doc/cpro_enga_avril08.pdf. 85 Procedural notice relating to the French Leniency Programme, 2 March 2009, available in English at mars_2009.pdf; Notice on Competition Commitments, available in English at Communiqué de procédure du 10 février 2012 relatif à la non-contestation des griefs, not yet available in English. 27. Even if, so far, unlike in the field of the merger control 87, there is no soft law in France regarding substantive antitrust issues, which is easy to explain due to the extensive place of EU law in this field, the Autorité no longer hesitates to deal with policy considerations in soft law texts. A new step was the adoption in 2011 of a notice on financial penalties 88 following not only the steel case 89 but also the work of the ECA (i.e., the European Competition Authorities) 90. Although the notice takes into account the specificity of French law, the text follows the same basic rules as the 2006 Commission guidelines to determine the basic amount 91. On other points, the Autorité does not hesitate to assert its own policy. Unlike the Commission, which is quite reluctant to take into account compliance programmes in its approach to fines, the Autorité has decided to favour them. For that reason, it adopted in 2012, within days of the settlements notice, a new type of soft law, a framework document on compliance programmes 92. This is clearly a policy statement. III. Consequences for competition policy 28. These consequences may be studied at two different levels. Regulation n 1/2003 has enabled the Autorité to develop a genuine competition policy in France (III.1), but the Autorité has also contributed to the development of EU competition policy (III.2). III.1. The development of competition policy in France 29. It is often said that for historical reasons France is a state without competition culture. This could probably be debated, but one thing is sure. Until these last ten years, issues of competition policy were dealt with only by the Ministry of Economy, which handled merger control and had a decisive role in antitrust since it conducted the inquiries and brought the cases before the Conseil. This does not correspond any more to reality. A kind of quiet revolution began around 2005/2006 before the adoption of the Lignes directrices de l Autorité de la concurrence relatives au contrôle des concentrations. The first version was issued on 2 March 2009 was repealed and a new version was adopted on 10 July Available at concentrations_juill13.pdf. 88 Notice of 16 May 2011 on the Method Relating to the Setting of Financial Penalties, available in English at penalties_16may2011_en.pdf. 89 CA Paris, 19 Feb. 2010, op. cit. A working group was created by the Government. 90 ECA Working Group on Sanctions Pecuniary sanctions imposed on undertakings for infringements of antitrust law Principles for convergence, available at autoritedelaconcurrence.fr/doc/eca_principles_uk.pdf. 91 Guidelines on the method of setting fines imposed pursuant to Article 23(2)(a) of Regulation No 1/2003, OJEU, n C 210, 1 Sept Framework-Document of 10 February 2012 on Antitrust Compliance Programmes, available in English at document_compliance_10february2012.pdf. Concurrences N I Colloque 8 Colloque Mannheim June 2013

9 reform. The 2008 reform confirmed the trend by giving the new Autorité additional resources. The Autorité relied on EU competition policy to progressively develop what can be called a genuine competition policy of its own. Some examples may be given to illustrate these choices both for the repressive and preventive faces of its action. III.1.1. Repressive action 30. The Autorité has adopted a narrow interpretation of the principle of procedural autonomy 93. In France, for instance, issues of liability, and especially the controversial issue of the liability of the parent company for the acts of its subsidiaries, are considered to be substantive issues and not procedural ones. Therefore, the Autorité fully applies the so-called Akzo case law 94. Furthermore, it applies this approach not just when article 101 and/or 102 TFEU are applicable to the case, but also when only French law applies 95. This is a deliberate choice, since previously the Conseil was rather reluctant to use the notion of a group of companies. Judicial review courts have endorsed this approach 96. On this precise and important point, some different choices have been made in Germany. The Court of Justice will probably have to solve this difference in the future, since determining the precise scope of the principle of procedural autonomy is clearly an issue of EU law. 31. Another example may be given in a field covered without any doubt by the procedural autonomy principle, namely, as the imposition of fines. Here again a clear political choice was made in the 2011 notice 97. Although the French legislative framework imposed some constraints, which have of course been respected, the Autorité decided to follow the general contours of the Commission s method. This does not mean that the French notice is a carbon copy of the 2006 guidelines. Some differences may be observed on some practical important points, such as the way in which the duration of the practice 98 or the recidivism 99 are taken into consideration. The practical consequences of the adoption of this notice are various. First of all, it changes the way the Authority works. Once the infringement is established, specific decisions on the 93 G. Canivet, E. Barbier de la Serre, H. Don, S. O Keeffe, L. Idot, Round-Table II, Procedural Autonomy: is it Time for Convergence in Europe?, New Frontiers of Antitrust Conference - Paris, 10 Feb. 2012, Concurrences n , art. n 45931, www. concurrences.com. 94 See the Orange Caraïbes case, op. cit. See also L. Idot, La responsabilité pénale des personnes morales. Les leçons du droit européen de la concurrence, Concurrences n The Court of Appeals (CA Paris, 23 Sept. 2010) held that EU law was not applicable to the case, but confirmed the liability of the parent company. 96 Cass. Com., 31 Jan Notice of 16 May 2011, op. cit. 98 For each additional year of infringement, the Autorité applies an increase of 50% (notice, pt 42) instead of a 100% increase. 99 In French, the correct word is «réitération», since «recidivism» is only used in criminal law. On the specific conditions which are to be fulfilled to establish réitération, see pts 40 to 42 of the notice. amount of fines are necessary within the College. Fining has become a difficult exercise in complex cases, which requires new competences. On their side, the firms mainly observe the increasing amount of fines, which is now, for the same types of practices, at the same level as the Commission s fines. The notice will also probably change the way the judicial review courts work, but at this stage it is too early to draw conclusions since the first important cases following the 2011 notice are still pending. 32. As the Autorité is not a specialised court but a public authority which develops and pursues a policy, the repressive action is only one part of its global mission. III.1.2. Preventive action 33. Developing advocacy is clearly an important task for the Autorité. It is not really a new task, as the Conseil already had a general advisory role with regard not only to texts but also to any situation which raised competition issues 100. It already used this tool to assert its own views on policy issues. For instance, in the mid-1990s and thereafter, some important opinions were given on newly liberalised sectors. Thanks to the 2008 reform, which gave to the Autorité the power to adopt opinions ex officio 101, there has been a substantial increase of this advisory role 102. In these last two years, the Autorité adopted almost as many opinions as final decisions 103. Some of these opijnions are quite important, not only for liberalised sectors 104 but also for new fields. Ex officio opinions were adopted in for retail distribution 105 and E-commerce 106. The undertakings have understood their impact and contested some of them before the administrative Supreme Court in 2012, but without success. Furthermore, the Autorité no longer hesitates to launch sector inquiries, even outside of this framework. Thus, in July 2013 a new inquiry on the distribution of prescription medicines was opened 107. The objective is to identify barriers 100 Art. L and Comm. code. 101 Art. L Comm. code. 102 See also, in 2012, the adoption of a general guide for public authorities («Guide d évaluation de l impact concurrentiel de projets de textes normatifs»). Annual report, 2012, p. 12, available at rub= For the last four years, the number of opinions was, respectively: 57 (but many opinions were adopted on the specific issue of delay of payments), 29, 21 and 25, while the number of final decisions was: 40, 39, 23 and 29. Detailed statistics are available in the first part of each annual report. 104 Many opinions were adopted in the 1990s following the entry into force of the EU directives. See, for instance, Opinion 94-A-15, 10 May 1994, on public undertakings in the field of energy. 105 Opinion 10-A-26, 7 Dec. 2010, on affiliation agreements of independent retailers and the terms for acquiring commercial land in the food retail sector, and opinion 10-A-25, 7 Dec. 2010, on «category management» agreements between retail grocery operators and some of the suppliers thereof, both available in English. See also opinion 12-A-01, 11 Jan (food retail in Paris). 106 Opinion 12-A-0, 18Council of State, 11 Oct. 2012, 2 decisions, Sté ITM and Casino, available at See, Autorité press release, 10 July standard.php?id_rub=441&id_article=2151. Concurrences N I Colloque 9 Colloque Mannheim June 2013