FRANCE: An Introduction to Competition/European Law
France: a perilous place for competition law infringers
The French Competition Authority is one of the most active in Europe. In 2024, it issued 11 infringement decisions and imposed more than EUR1.4 billion in fines, while reviewing 295 merger transactions. Beyond these record figures, competition law must be taken particularly seriously in the French market due to the rigor of competition investigations and procedures, and the very broad and strict application of the substantive rules.
Particularly restrictive competition investigations and proceedings
Stringent nature of investigations
In France, competition authorities have a wide range of investigative powers. Traditionally, they may conduct either basic investigations, which can be unannounced and involve interviews or requests for information, or more intensive investigations that amount to full-scale searches. The choice between these methods is entirely at their discretion. Simple investigations are conducted freely by investigators without judicial authorisation, while intensive investigations are subject to prior approval by the liberties and detention judge (juge des libertés et de la détention).
In practice, however, basic investigations tend to become increasingly burdensome. Recently, unannounced basic investigations have been carried out simultaneously at numerous companies by large teams of case handlers exchanging information. Similarly, some requests for information have required the production of emails from several dozen individuals over a period exceeding ten years, based on multiple keywords - amounting, in effect, to intensive investigations subcontracted to the targeted companies, which can only comply with such demands by engaging forensics service providers.
In-depth investigations are subject to prior judicial authorisation but this is generally obtained very easily on the basis of limited evidence, and challenges to authorisations are almost always rejected. Similarly, the competition authorities consider that they are entitled to seize lawyer-client correspondence and consultations provided in the course of advisory activities, since only lawyer-client correspondence for the purposes of defence, following the initiation of proceedings, is protected, and then only in the opinion of the Competition Authority's case-handlers if it concerns competition law.
Although the ECN+ Directive requires the availability of effective judicial review against all types of inspections, interviews or requests for information, there is no autonomous and immediate remedy against basic inspections, even though these can be highly intrusive and open to challenge, and the right to remain silent does not need to be notified, even in the case of an in-depth investigation.
In recent years, the Competition Authority has also taken the view that it can circumvent the limited safeguards and remedies applicable to in-depth competition inspections by reporting the infringements that come to its attention to the Public Prosecutor, who can initiate criminal proceedings in which the inspected undertaking does not have the right to be assisted by a lawyer during the search or during questioning, cannot obtain copies of the documents seized, cannot immediately challenge the search and its conduct, and cannot benefit from the protection of business secrets. There is therefore very little, and increasingly less, protection for the rights of the defence in investigations.
This limitation of undertakings’ rights is all the more difficult to understand given that the Competition Authority has no difficulty in detecting anticompetitive practices, as it receives a large number of leniency applications from participants in horizontal cartels seeking immunity from fines by reporting the cartel in which they were involved.
Stringent nature of proceedings
The procedural framework also favours the investigation services. Case handlers may conduct investigations for months or even years, very easily interrupting the limitation period with the slightest investigative act, while undertakings have only two months in standard proceedings to respond to very lengthy Statements of Objections, without having previously had access to the case file, since adversarial proceedings only begin with service of the Statement of Objections.
The case handlers are then granted again very long periods to respond to the defence through a report, which will once more give undertakings only two months to reply before a hearing is held before the Authority's Board, with strictly limited speaking time for the defence.
In the simplified procedure, there is only one round of adversarial proceedings with one time-limit for the defence to respond, which can be up to four months. The appeal itself is subject to strict deadlines: one month to lodge an appeal but with an obligation to provide full justification within two months of the decision being notified, which is again very short, whereas the Competition Authority will have much longer to respond.
Broad application of substantive rules and sanctions
Broad application of substantive rules
French and European competition law is tightly enforced by the Competition Authority. The exchange of sensitive information between competitors is severely sanctioned. It is therefore essential to strictly avoid roundtable discussions within professional organizations, which could lead to missteps that could result in sanctions.
In certain areas, the decision-making practice of the Competition Authority appears to be stricter than that of European law, even when the Authority applies both legal frameworks simultaneously, which seems to contradict the principle of the primacy of European law. The most striking example is the reclassification of recommended or maximum prices as resale price maintenance.
In applying the new two-part test (solicitation by the supplier to charge prices deemed unlawful plus acceptance by distributors) which replaced a three-pronged test that was more favourable to undertakings (reference to prices, broad application of the prices referred to, and coercive measures by means of price controls or monitoring to ensure compliance with prices), the Competition Authority readily considers that the finding of an infringement does not require coercive measures or monitoring, which is contrary to European law. The evidence requirements are also very broad. Attention should also be paid to the specific rules applicable to French overseas départements, where the granting of exclusive import rights is prohibited per se, even though European law automatically exempts exclusive distribution agreements where market shares are below 30%.
The merger control thresholds remain low, particularly in the retail sector or in the overseas départements, which explains the very high number of transactions subject to review, with timeframes that can prove to be quite lengthy in practice. The risk of control below these thresholds under the rules on abuse of dominant position or anticompetitive agreements cannot be entirely ruled out, although this risk is marginal.
Tough stance on sanctions
The level of fines imposed reflects the tough stance on sanctions. Several factors contribute to the increasing risk of fines; the number of leniency applications is rising. The Competition Authority considers itself entitled to apply retroactively its revised 2021 procedural guidelines on fines, which are stricter than the 2011 version.
Furthermore, the transposition into French law of the ECN+ Directive by the Ordinance of 26 May 2021 replaced the previous EUR3 million cap for professional organisations with the general cap of 10% of turnover of the undertakings concerned.
In addition, all procedural violations are severely sanctioned, whether they involve obstruction of investigations or gun jumping in merger control. Administrative sanctions may be compounded by civil sanctions, made easier by the transposition into French law of the Damages Directive, as every fine can be followed by damages actions based on the Authority’s decision - without even considering the reputational risk for sanctioned undertakings.
All of these elements should prompt undertakings to exercise great caution, to implement compliance policies that include regular training initiatives and to seek legal advice in a timely manner in order to anticipate and prevent risks related to competition law.