Transposition of ECN+ Directive into French law

On 26 May 2021, the French Government adopted an Order transposing into French law the ECN+ Directive of 11 December 2018 which strengthens the means available to national competition authorities (NCAs) (note that Articles 17 to 22 of the ECN+ Directive on leniency programs had already been transposed separately in a Decree of 10 May 2021).  

Not all provisions of the ECN+ Directive had to be transposed into French law since some of the provisions were already in force in France. For instance, the French Competition Authority (“FCA”) already had the power to impose fines up to 10% of companies’ worldwide turnover (Article 15 of the ECN+ Directive).  

Below are the main upcoming changes.  

New enforcement tools  

In terms of enforcement tools, the Order introduces the possibility of the FCA to:

(i) benefit from the principle of opportunity and therefore to reject complaints that do not match its enforcement priorities;  

(ii) impose structural or behavioural injunctions proportionate to the infringement and necessary to put an end to an anticompetitive practice (for a limited or unlimited period of time). In this respect, the FCA indicated that, although it only expects to make a limited use of this provision, it could be particularly useful in the digital sector;  

(iii) have a wider access to companies’ virtual data during dawn raids (even if encrypted and/or stored abroad): in practice this means, for example, that the fact that data is stored in a Cloud should not be an obstacle for the FCA; and

(iv) accept all types of evidence in the framework of an investigation: the very broad drafting here seems to include covert recordings as long as they are not the sole source of evidence.

Novelties with regards to sanctions  

With regards to sanctions, we wanted to stress the following changes:

(i) deletion of the “damage caused to the economy” from the list of factors taken into account by the FCA to calculate the fine to be imposed to undertakings; this was a French specificity leading to lengthy debates between the FCA and economists to try to reduce the fine to be imposed. The deletion of this criterion simplifies the FCA’s methodology to calculate fines but is also, to some extent, beneficial to the undertakings sanctioned since the absence of arguments around the damage to economy will make the case of claimants in follow on damage claims a bit more difficult.

(ii) very significant increase of the maximum fine to be imposed to associations of undertakings from EUR 3 million until now to up to 10% of their global turnover or, when the infringement is linked to the activity of its members (which is almost always the case), up to 10% of the sum of the global turnover of each member active on the market concerned by the infringement;  the financial liability of each member is limited in terms of payment to its own individual maximum fine (i.e. 10% of its global turnover).  

The Order also provides for a financial liability of the members of the association as follows:  

• when the FCA uses the turnover of the members as a basis to calculate the fine and the association is insolvent the FCA can order the association to launch a call for funds for its members to pay the fine;  
• if these funds are not provided in time to the association, the FCA can then directly ask for the payment of the fine to the undertakings whose representatives were members of the decision-making bodies of the associations; and  
• ultimately, if necessary to ensure the full payment of the fine, the FCA may also ask any members of the association active on the market concerned to pay the unpaid amount of the fine, unless the member(s) demonstrate(s) that it has not apply the litigious decision of the association or was not aware of this decision or actively disassociated itself from it before the launch of the FCA proceeding.  

This measure is not applicable to practices which ended before the entry into force of this Order (i.e. which ended before 28 May 2021).  

(iii) immunity from criminal sanction for individuals (executives, employees) who have actively participated in the infringement in the event of an immunity / leniency application of an undertaking; in practice this exemption is conditioned upon an active collaboration of the individual concerned with the FCA and the public prosecutor (i.e. reply to any questions, no destruction of document etc.); and

(iv) the possibility for the FCA to impose ex officio interim measures (i.e. at the FCA’s own initiative).

Other provisions

(i) Cooperation between NCAs – The transposition of the ECN+ Directive also reinforces the cooperation between NCAs during the investigation phase (e.g. assistance during dawn raids and simple investigations by the FCA, notification of procedural acts, etc.) and after the decision is adopted (e.g. assistance to execute the decisions).

(ii) Role of the FCA and the Ministry for the Economy in proceedings concerning Dawn Raids – The Order also introduces the possibility for the FCA or the Ministry of the Economy to launch an appeal in the event that a judge refuses to authorise a dawn raid. It also grants the FCA and the Ministry for the Economy the quality of party to the proceeding in the event of an appeal against the dawn raid or the order authorising the dawn raid, which means that they can then appeal the Court of Appeal’s decision to annul the dawn raid to the French Supreme Court.  

(iii) Access to file during an FCA investigation – Leniency statements will only be accessible by the parties to the proceeding concerned by the leniency application and settlements between undertakings and the FCA may only be accessed by the party who has signed the settlement. Such information may only be used in (a) a procedure linked to the case concerned and which relates to the allocation of a fine between cartel participants or (b) an appeal against an FCA decision sanctioning anticompetitive practices.

(iv) Immunity from fines under the leniency program – New provisions adopted in the Decree of 10 May 2021 specify the conditions under which full immunity can be granted: either the information provided enables the FCA to carry out inspections or it is sufficient to establish an infringement. The Decree also provides for the possibility to file the leniency application through a secure electronic platform, technical details for this new platform should be addressed in another decree in the near future.  

Overall, the FCA commented that the above provisions, read together with the recent new approach from the Commission concerning Article 22 merger referrals, creates important new tools for NCAs to deal with upcoming challenges, in particular in the digital sector.