I OVERVIEW OF RECENT PRIVATE ANTITRUST LITIGATION ACTIVITY
In recent years, a private enforcement culture has been developing in France, partly due to several legislative reforms, and partly to the evolution of courts’ practice. This evolution will be reinforced once the Directive2 on actions for damages under national law (the Damages Directive) are implemented in French law. Member States had until 27 December 2016 to implement this Directive, but many of them – including France – have not met the deadline. The Law of 9 December 2016,3 known as the ‘Sapin 2 Law’, has authorised the French government to implement the Damages Directive by way of an ordinance. However, discussions on the draft legislation prepared by the government (the Draft Implementing Legislation) are still ongoing. French law will need to evolve in a number of respects to be consistent with the new principles stated by the Damages Directive regarding, in particular, joint and several liability, discovery and the burden of proof (see Section XV, infra).
Concerning past legislative reforms, a ‘class action’ regime was introduced in France, governed by the Law of 17 March 2014, known as the ‘Hamon Law’.4 It is, however, limited to actions by consumer associations. The ‘French consumer class action’ scheme is an ‘opt-in with publicity’ procedure that enables a group of individuals represented by an association authorised by the government (of which there are 15) to claim damages for material harm resulting from a contract or resulting from anticompetitive behaviour.
Although class action regimes with respect to anticompetitive practices are only open to consumers so far,5 undertakings are nonetheless entitled to introduce individual damages actions on the basis of general tort law.
A number of other substantive revisions have impacted private competition enforcement in France, including the Law of 20 November 2012 and the Law of 17 June 2008:
- a The Law of 20 November 20126 introduced a provision which gave the Competition Authority the discretionary power7 to disclose its files, with the exception of those documents obtained through leniency applications.8
- b The Law of 17 June 20089 modified the statute of limitations, reducing the period for the introduction of a private action to five years from the moment at which the victim was aware of the damage.10
It is nevertheless likely that these provisions will need to be adapted in order to comply with the Damages Directive.
Concerning the courts’ evolution, the approach of French courts to antitrust damages claims is based on traditional civil law principles, according to which the claimant must prove the existence of an infringement (faute), a damage suffered, and a causal link between them. This provides a clear and certain legal framework, and allows the parties to refer to the body of case law developed in other areas.
Considering the difficulty of proving damages in certain antitrust cases,11 French courts may have, in the past, adopted simplistic solutions, particularly concerning the passing-on defence. However, case law is becoming increasingly precise and clear in this area, and a decision in a follow-on action relating to the Lysine cartel has brought welcome clarification in this respect (see Section IX, infra). This decision illustrates the increasingly pragmatic approach adopted by French courts, which are now more inclined to grant damages.12
II GENERAL INTRODUCTION TO THE LEGISLATIVE FRAMEWORK FOR PRIVATE ANTITRUST ENFORCEMENT
Private competition enforcement in France is based on the general tort law provisions of Article 1240 of the Civil Code13 in combination with the specific competition law provisions, Articles L420-1 and L420-2 of the Commercial Code and Articles 101 and 102 of the Treaty on the Functioning of the European Union.
Article 1240 of the Civil Code (tortious liability) requires the claimant to prove that a fault on the part of the defendant caused the alleged damage. Under the general tort law regime, the infringement of any legal provision – whether administrative, civil or criminal – constitutes a ‘fault’ for the purposes of Article 1240 of the Civil Code. French courts clearly consider that an infringement of French or EU competition law provisions constitutes a fault.14 However, the Supreme Court has specified that a mere reference to the decision relating to the infringement, without any description of the behaviour concerned, is not sufficient to establish the fault.15 But this case law will be less relevant once the Damages Directive has been implemented in French law, since it provides for a fault presumption resulting from final infringement decisions taken by national competition authorities within the EU, or by a review court. However, only the final infringement decisions taken in the Member State where the damages action is lodged will create an irrefutable fault presumption.
It then remains for the claimant to establish the damage suffered and a causal link between the competition infringement and that damage. Tortious liability claims falling within the general regime, such as antitrust claims, are time-barred after five years from the knowledge of the behaviour causing the damage.16 Although the five-year period is in line with the Damages Directive, the current rules will need to be adapted in order to comply fully with its provisions. In particular, the Draft Implementing Legislation – although it is still being discussed – intends to:
- a amend the five-year starting point, which will run from the date when the claimant gained knowledge of (1) the infringement, (2) the resulting harm, and (3) the identity of the infringer;
- b specify that the five-year period (1) will not start running until the infringement has ceased, and (2) will be interrupted towards all the co-infringers in cases of action by a victim against one of them.
Damages actions may also be based on contractual claims. The statutory basis for such actions is Article 1231-1 of the Civil Code,17 in combination with the relevant antitrust provisions.
Traditionally, the competent courts were the general civil or commercial courts, until a Decree of 30 December 2005 created 16 specialised courts.18 Eight of these courts are commercial courts, competent over litigation between professionals (commercial courts of Marseille, Bordeaux, Lille, Lyon, Nancy, Paris, Rennes and Fort-de-France); the other eight are civil courts with jurisdiction over cases between private litigants (courts of first instance situated in the same cities as the commercial courts). The Paris Court of Appeal has exclusive jurisdiction to hear the appeals lodged against the decisions rendered by these 16 courts.19
Criminal courts may award damages for breach of competition law in a criminal law proceeding based on Article L420-6 of the Commercial Code. When awarding damages, the criminal judge will apply the same statutory provisions as a civil judge.
Article L420-1 and L420-2 of the Commercial Code are limited to anticompetitive practices that have been implemented or that have effects within the French territory, regardless of where the undertaking implementing those practices is located. Tort actions can be commenced in France if the anticompetitive practice was implemented in France or the damage was suffered in France.
There is no exception for conduct by foreign parties: the jurisdictional link to the French courts is formed once the practice is implemented in France or the damage from the practice is suffered in France; thus the individual’s nationality or the undertaking’s location is irrelevant.
To bring an action before the French courts, the claimant must be a natural or legal person. The claimant must allege a fault on the part of the defendant that caused it to suffer damage. For private antitrust cases, the claimant must therefore allege that the defendant implemented anticompetitive practices (such as agreeing to fix prices or abusing a dominant position) that caused it to suffer damage, for example, increased costs or loss of profit or sales, as well as loss of opportunity to develop one’s business in the market at lower costs.22
V THE PROCESS OF DISCOVERY
Under French law, there is no discovery process comparable to that found in the United States. The principle in French law, stated at Article 9 of the Civil Procedure Code (CPC), is that ‘each party must prove, according to the law, the facts necessary for the success of its claim’. This sets a high standard according to which parties are only required to disclose the documents they rely on.
However, this standard is modified, among others, by the two following rules:23
- a Article 10 of the CPC states that the judge may order any measures of inquiry deemed necessary to enable the court to decide the case where it does not have sufficient elements: these measures may consist of, inter alia, personal verifications of the judge, auditions of the parties or third parties, statements of third parties, or the appointment of an expert; and
- b Article 11 of the CPC allows a party to ask the court to order the other parties to proceedings or a third party to communicate any kind of document necessary to prove the facts alleged. It provides that third parties are not obliged to communicate documents where there is a ‘legitimate impediment’. This includes documents and information covered by attorney–client privilege and in cases of force majeure.
The burden of proof lying with the claimant has been facilitated with the adoption in 2012 of a new second paragraph of Article L462-3 of the Commercial Code, which allows the Competition Authority to disclose documents related to anticompetitive behaviour, with an exception for leniency documents.
In the Semavem judgment of 19 January 2010,24 the Supreme Court held that where a party to a follow-on action can prove that the disclosure of certain documents is necessary for the exercise of its rights of the defence, French courts may either order the Competition Authority to disclose the relevant documents or allow one of the parties to disclose the relevant documents.
Following this ruling, in the Outremer Telecom case, the Paris Commercial Court rejected Outremer Telecom’s claim for breach of confidentiality against the defendants, considering that the documents that had been disclosed before the court were necessary for the defence of the parties who had disclosed them and known to all the parties to the proceedings.25
This was confirmed in the Ma Liste de Courses case,26 which was introduced following a decision of the Competition Authority involving commitments from the parties. The Paris Commercial Court ordered the Competition Authority, on the ground of Article 138 of the CPC,27 to disclose documents it had obtained during its investigation.
Following the Competition Authority’s reluctance to provide the documents, the Paris Commercial Court confirmed in a second judgment its previous decision ordering the disclosure of the concerned documents.28 However, this decision was appealed against before the Paris Court of Appeal, which held that the Competition Authority and its agents should not bear the risk of a breach of confidentiality in lieu of the party which is the only one to be able to determine which documents are necessary for the exercise of its rights of defence.29 Thus, the principle set in the Semavem case is nuanced: in cases where the claimant has had access to the documents during the procedure before the Competition Authority, the risk of breaching confidentiality is borne by the claimant, who must prove that each document disclosed is necessary for its claim.30
However, these principles will have to be modified once the Damages Directive is implemented in France. Article 5, Section 2 of the Damages Directive refers to the disclosure not only of ‘specific items of evidence’ but also to ‘relevant categories of evidence’. Moreover, Article 6 of the Damages Directive explicitly excludes not only ‘leniency statements’ but also ‘settlement submissions’ whereas so far under French law the rules were unclear concerning documents obtained by the Competition Authority particularly in cases where the parties had offered commitments or chosen not to challenge the objections. The Draft Implementing Legislation intends to amend the Commercial Code accordingly by creating a new chapter on the production and communication of evidence, implementing the principles set forth in the Damages Directive, and confirming that (as stated by case law) the Competition Authority shall not be enjoined to produce evidence if the parties – or a third party – could reasonably be in position to produce it.
So far, Article L462-3 of the Commercial Code imposes no obligation of disclosure to the Competition Authority, although it allows this possibility, excluding leniency documents. Furthermore, Article L463-6 of the Commercial Code prohibits the communication of documents by a party regarding another party (or a third party) which were obtained during the proceedings before the Competition Authority, subject to a criminal sanction. According to case law such disclosure does not constitute a breach of secrecy, provided that the party disclosing the documents uses them to exercise its rights of defence. Articles L462-3 and L463-6 of the Commercial Code seem thus to be stricter that the Directive. However, the Draft Implementing Legislation intends to amend Article L462-3 by including the possibility for a court to order the Competition Authority to provide pieces of evidence under certain conditions (excluding leniency statements and settlement submissions), and Article L463-6 by stating that the prohibition of communication will not apply to disclosures occurring in compliance with the new disclosure procedure.
Concerning documents held by third parties other than the Competition Authority, French law has no general pretrial discovery procedures. However, Article 145 of the CPC permits the court to order preparatory enquiries to preserve evidence of the facts on which a claim is based or to establish the existence of such evidence. The claimant must adduce a legitimate reason for doing so.
VI USE OF EXPERTS
The appointment of independent experts by French courts is a common practice. In antitrust litigation, experts are sometimes used to establish the existence of an anticompetitive practice, but their intervention is more often aimed at quantifying damages.
Common methods used are:
- a to compare the price actually paid during the period of the anticompetitive practices and that usually paid in the absence of the practices; and
- b to evaluate the profit that would have been earned in the market in the absence of the anticompetitive practices.
Experts such as economists may intervene in two ways:
- a all parties may produce an expert’s report or opinion to support their claims;31 the court, however, is not obliged to hear the expert, but may choose to do so; and/or
- b the court may appoint an expert (either at the request of the parties or by its own initiative) pursuant to the rules set forth in Article 263 et seq. of the CPC. 32
In addition, the court has the power to refer a case to the Competition Authority to obtain an opinion on competition issues (such as market definition, abusive nature of conducts, etc.). This power has, for example, been used in the Bottin Cartographes v. Google case,33 where the Paris Court of Appeal has requested an opinion from the Competition Authority on Google’s alleged abuse of a dominant position in the online mapping market, in a case in which the Commercial Court had granted at first instance €500,000 compensation to the claimant. However, following the Competition Authority’s opinion,34 the Paris Court of Appeal recently overturned the judgment, thus confirming the difficulty of stand-alone actions.35 The power to request an opinion from the Competition Authority was also previously applied in the Luk Lamellen v. Valeo case36 and in the Carrefour Proximité case.37
VII CLASS ACTIONS
Before the Hamon Law of 17 March 2014 was enacted, three types of ‘consumer’ actions enabled consumers who were victims of anticompetitive practices to claim damages.38 However, consumers faced significant obstacles to bring such legal actions since they were subject to strict procedural conditions and consumer associations were banned from publicising their claims in order to gather claimants.39
Following the enactment of the Hamon Law, the new Article L423-1 of the Consumer Code provides for a ‘French consumer class action’ described as an ‘opt-in with publicity’ procedure. In this respect, an authorised association (out of the 15 currently approved by the government) can bring actions on behalf of a group of individuals who have suffered material harm under a contract or following anticompetitive behaviour. The main features of the scope of this class action are (1) the monopoly of authorised associations to bring actions; (2) the class action is available only for physical consumers, excluding businesses and professionals; and (3) the compensation is limited to material harm, not corporal or moral damages. The class action involves a three-step procedure: (1) the action is brought before a court of first instance, which will decide the matter on the basis of individual cases (at least two) presented by the association and will issue a single judgment, referred to as a ‘declaratory judgment on liability’; (2) consumers may join the class after publication of the judgment; and (3) consumers who joined the class may request for compensation according to the conditions of indemnification specified in the declaratory judgment on liability, which can provide either for direct payment by the business to the members of the class or indirect payment through the association or the person assisting the association.
Article L423-10 of the Consumer Code also provides for a simplified procedure consisting of an ‘opt-in system with individual publicity’: when affected consumers are identified (e.g., clients of a gas or telephone-services provider) and have suffered similar harm, it will be possible to inform them by an individual letter, including a response slip. Subject to its implementation in practice, this system is expected to be as efficient as an ‘opt-out’ system.
Regarding claims for damages originating from undertakings, in January 2012, the Paris Commercial Court was seized of the validity of a collective action financing system (so-called ‘third-party funding’) implemented by an Irish company named CFI. CFI brought claims against some of the members of a freight cargo cartel, and these companies tried to challenge the validity of the CFI system, in particular the creation of a damage claims vehicle (a French company called Equilib), before the French courts. The Paris Commercial Court stated that the action was not admissible without going into the merits, since an action had already been brought before the Dutch courts.40
However, the development of third-party funders in France may improve in the future, should their status be clarified and regulated. In this respect, the French National Bar Association has recently proposed41 the adoption of new legislation that would incorporate the European Commission’s recommendations42 in the French Civil Code, which may lead to certain rules being imposed on third-party funders such as (1) independence from the parties, (2) no interference with the claimant’s procedural decisions, (3) financial standing, and (4) no excessive fees.43
It is also worth mentioning that the Paris Bar Association has recently created an online platform allowing to regroup claims (Avocats Actions Conjointes).
VIII CALCULATING DAMAGES
The general principle of damages in French law is to put the claimant in the position he or she would have been in had the fault not occurred.44 For competition cases, this implies a very precise evaluation of the increase in costs or loss of profit suffered by the claimant. In certain cases, the French courts may grant damages resulting from a loss of opportunity, but this is rare and such claims are considered under very strict conditions.45 Notwithstanding, it is noteworthy that the Paris Court of Appeal has recently reiterated that, as stated by the European Court of Justice (ECJ):
[…] the right to compensation shall not only cover the actual damage and loss of income, but also the payment of interests. The ECJ has specified that the full compensation must include the compensation of negative effects resulting from the elapse of time since the damage caused by the infringement has occurred, i.e. the monetary erosion, but also the loss of opportunity incurred by the victim due to the unavailability of its capital.46
The Supreme Court has reiterated that it is for the claimant to specify the types of damage it aims to recover; courts cannot, at their own initiative, grant a different type of damage47 (e.g., loss of opportunity instead of increase in costs).
Damages do not serve a punitive purpose and punitive damages do not, therefore, exist under French law.
Article 695 of the CPC limits the categories of costs related to the proceedings that are awarded to the successful party under Article 696 of the CPC. Attorneys’ fees are not included in the exhaustive list set out at Article 695 of the CPC. Instead, they come under the expenses that the judge can, under Article 700 of the CPC, award to the successful party. In exercising this discretion, the judge will take into account the fairness of an award and the economic situation of the losing party. The judge is not obliged to award attorneys’ fees and often the amount granted is symbolic rather than compensatory.
IX PASS-ON DEFENCES
The pass-on defence tallies with the objectives underlying damages awards in French law: to compensate the concerned party only for the damage suffered. If the party has passed on a part of any price increase, he or she has reduced the damage suffered. General principles of French law therefore favour recognition of the pass-on defence. However, so far, the case law in France imposes a high burden of proof on claimants, who are required to prove that any price increase suffered by them was not passed on to their own clients.48 This situation should change with the implementation of the Damages Directive (see below).
In the past, due to the difficulty of establishing whether price increases have been passed on, French courts have adopted decisions that have drawn some criticism. This was the case, for example, in a widely noted application of the pass-on defence by a French court in a follow-on action related to the Vitamins cartel.49 On the issue of the loss of profit claim, the court held that it was, in fact, a claim for loss of opportunity (the opportunity for the claimant to increase its turnover) and that in this case, the claimant had not established ‘the certain and direct nature of the prejudice necessary to open the right of reparation’.50 Turning to proof of the passing-on, the court readily accepted the defendant’s argument: instead of requiring documentary evidence that the passing on had occurred, the court based its acceptance on the European Commission’s Vitamins decision and a press release of December 2001, which stated in general terms that price increases resulting from cartels were likely to be passed on to consumers. The court elaborated that the claimant had the possibility to pass on the overcharges and that in not doing so, it ‘had freely decided its pricing policy so that the liability of the defendants could not be engaged’.51 The claimant was therefore dismissed.
A similarly simplistic approach was adopted in another Vitamins cartel case,52 although this seems to have been mainly motivated by the clumsy evidence brought by the claimant.
In an action against a supplier, Ajinomoto, which took part in the Lysine cartel sanctioned by the European Commission, the Supreme Court upheld the judgment of the Paris Court of Appeal, which considered the claimants, la Coopérative Le Gouessant and la Société Française d’Aliments, had not sufficiently proved the damage and the causal link, by relying on general, theoretical and academic econometric studies and failing to submit a tangible analysis of the evolution of effective prices. The Paris Court of Appeal’s ruling was to a very large extent based on the fact that passing on costs to clients was the ‘normal commercial practice’, thereby creating a presumption of passing on in indemnity claims, which is, in practice, difficult to rebut.53
However, in another case involving Ajinomoto, the Supreme Court has clarified this issue and the Paris Court of Appeal has subsequently modified its initial unclear stance. In a first decision, the Paris Court of Appeal had dismissed the pass-on defence alleged by Ajinomoto, surprisingly considering that the fact that its indirect customer, Doux Aliments, which had introduced the claim, was able to pass the excessive prices on to consumers would not affect the extent of the compensation requested.54 The Supreme Court quashed this judgment in June 2010,55 holding that the Paris Court of Appeal had failed to ascertain whether Doux Aliments had actually passed on the price increase to its customers. Referred back to the Paris Court of Appeal (but with different judges), the burden of proof on the claimant was confirmed. However, the Paris Court of Appeal applied a pragmatic approach by noting that lysine represents only 1 per cent of the total cost of the chicken feed and therefore concluding that the price increase was not likely to cause an automatic and mathematical adjustment of Doux Aliments’ price to its distributors. In addition, Doux Aliments faced very strong countervailing negotiating power from its clients, essentially big distributors. It was therefore highly unlikely that passing on had occurred. Thus, Ajinomoto was ordered to compensate Doux Aliments with an amount over €1.5 million.56 This decision is important in that it demonstrates that it is possible, in practice, to rebut the passing-on presumption; this requires, however, that the claimant presents clear and convincing evidence, even if not all calculation elements are available.
Therefore, the current case law status in France may be summed up as follows:
- a there is a passing-on presumption which benefits indirect customers;
- b however, where indirect customers are not the final customers, the presumption also plays against them: they must prove that they did not pass the overcharge on to their own customers; and
- c the presumption is difficult to rebut but not impossible, and has been rebutted in certain cases.
The implementation of the Damages Directive may lead to a modification of this regime: on the basis of the Damages Directive, the burden of proof lies on the defendant to demonstrate that the additional cost has been passed on to the end customers.57 However, when the claimant is an indirect customer, he or she may benefit from a presumption, under certain conditions: the proof is deemed to be brought when the indirect customer shows that (1) the defendant infringed competition law, (2) the infringement has resulted in an overcharge for the direct customer, and (3) the indirect customer bought the goods or services concerned by the infringement, or derived from or containing them.58 These conditions do not exist under current French case law, but are intended to be included in the Commercial Code by the Draft Implementing Legislation.
X FOLLOW-ON LITIGATION
Follow-on actions are those that follow-on from a decision of the Competition Authority or European Commission condemning undertakings for anticompetitive practices: the enforcement decision establishes the fact of the practice which, in turn, establishes the fault necessary to obtain damages at civil law. It then remains for the claimant in the follow-on action to prove damage and causation. The admissibility of follow-on actions was clearly established by the Supreme Court in Lectiel v. France Telecom.59
Recent case law has confirmed the French courts’ preference for follow-on litigations rather than stand-alone actions (i.e., damages actions brought directly by the claimant before commercial courts).
Even in stand-alone actions, competition authorities also have a key role, since French courts may60 use the option offered to them by law to request an opinion from the Competition Authority (see Section VI, supra).61
In some cases, plaintiffs bring at the same time, on the one hand, the commercial court of first instance of a damages claim (or, as the case may be, summary proceedings to suspend the alleged infringement62) and, on the other hand, the Competition Authority for a public enforcement of competition law. The two proceedings are thus conducted in parallel.63 However, to ensure consistency, a judge may decide to stay the proceedings until the Competition Authority has adopted a decision on the alleged anticompetitive practices at stake. French judges most frequently exercise this option.64 For instance, in an action against Google, the Paris Commercial Court decided to stay proceedings due to a pending proceeding before the European Commission.65
The Supreme Court has confirmed that anticompetitive behaviour already sanctioned by the competition authorities constitutes a fault, and that the victims of such behaviour are entitled to claim damages.66 This position was followed by courts,67 which similarly take the same position as the Competition Authority when the latter had considered that the practice at stake did not constitute an infringement of competition law or that the operator concerned did not hold a dominant position.68
While Regulation 1/2003 explicitly provides that European Commission decisions are binding on national courts,69 no legislation provides the same for the Competition Authority’s decisions. These do, however, have a very high probative value, which will be even clearer once the Damages Directive has been implemented into French law. In this respect, the Draft Implementing Legislation intends to specify – in compliance with Article 9 of the Damages Directive – that an infringement of competition law found by a final decision of the Competition Authority (or of a review court) shall be deemed irrefutably established for the purposes of an action for damages. However, the Draft Implementing Legislation is peculiar insofar as it defines a ‘final decision’ as ‘final on the part relating to the establishment of the infringement’ (i.e., not necessarily on the amount of the fine).
Contrary to precedent, opinions adopted by the Competition Authority on the grounds of Article L462-4 of the Commercial Code (opinion on any competition issue) are to be analysed as advice for the Parliament and do not entail any adverse effect. They therefore do not have the binding nature of a judgment.70 Reading between the lines, it appears that a follow-on action based on an opinion from the Competition Authority would be successful only if the court determines itself that the practice concerned is anticompetitive.
Concerning the final infringement decisions adopted by competition authorities (or review courts) of other Member States, their probative value remains to be tested before the French courts. However, Article 9 of the Damages Directive provides that such decisions shall at least constitute prima facie evidence that an infringement of competition law has occurred. In this respect, the Draft Implementing Legislation intends to confer on such decisions a rebuttable presumption of infringement.
Note that fines imposed by the Competition Authority are not taken into account by the courts in assessing damages. However, Article L464-2 of the Commercial Code states that the amount of fines imposed by the Competition Authority must take into account, inter alia, the ‘damage to the economy’. If this damage has been calculated in detail (with the assistance of the economic team of the Competition Authority), the decision may provide elements that may be useful for claimants in private actions.
Attorney–client privilege or professional secrecy between a lawyer and a client is established by Article 66-5 of Law No. 71-1130 of 31 December 1971. It includes consultations (attorney work product), correspondence between lawyer and client and between lawyers (except for the latter when their correspondence mentions ‘official letter’), and notes from lawyers’ meetings with clients. Advice from and correspondence with in-house lawyers is not covered by professional secrecy.
As France is a signatory to the European Convention for the Protection of Human Rights and Fundamental Freedoms, changes in the case law of the European Court of Human Rights in Strasbourg may have an effect on the delimitation and implementation of the concept of attorney–client privilege in France. The ECJ’s case law also has some bearing on the French notion of attorney–client privilege.
When information or documents are provided to competition authorities, these are included in the administrative file of the case, to which all parties will be given access after they have been notified of the statement of objections during the period in which they have the right to reply.71 The parties may request that part of this information or documents be concealed on the basis that it contains business secrets:72 these will then be classified in a confidential annex of the file. However, if one of these documents is deemed necessary to the procedure, it may be declassified by the Competition Authority.73
XII SETTLEMENT PROCEDURES
Settlement procedures are rather informal in France: when the parties reach a settlement agreement, they must notify it to the court by filing ‘settlement pleadings’ in order to obtain a declaration of enforceability.74
Because of the simplicity of the procedure, and for other reasons such as the wish to avoid adverse publicity, private antitrust cases in France are very often settled. One can cite Luk Lamellen v. Valeo75 in this context.
The Damages Directive may further encourage the settlement route. Indeed, in line with Article 18 of the Damages Directive, the Draft Implementing Legislation provides that damages paid to a victim by an infringer as a result of a consensual settlement, and prior to the adoption of a fining decision, may be taken into consideration by the Competition Authority in determining the amount of its fine.
Arbitration procedures are available in France and arbitration rules are clearly defined by Article 1442 et seq. of the CPC. However, they are rarely used in private competition enforcement cases.76
XIV INDEMNIFICATION AND CONTRIBUTION
Civil law generally provides that one may claim damages from any of the defendants because they are jointly and severally liable for the damage suffered. 77 Where a number of defendants are held severally liable for anticompetitive behaviour, the victim will therefore be able to recover the full amount of damages from any one of the defendants. In this case, the defendant or defendants who have paid the award retain a right of action for contribution against the other defendants. The court determines the amount of each defendant’s contribution based, in particular, on the degree of seriousness of the fault committed by each, namely, the level of their respective participation in the anticompetitive practice.
However, Article 11 of the Damages Directive provides for exceptions to the joint and several liability of small or medium-sized enterprises (SMEs) and immunity recipients, which are intended to be included in the Commercial Code by the Draft Implementing Legislation:
- a SMEs: if its market share in the relevant market was below 5 per cent at any time during the infringement, and if the application of joint and several liability rules would irretrievably jeopardise its economic viability and cause its assets to lose all their value, the SME’s liability is limited only to its own direct and indirect purchasers; and
- b immunity recipient (i.e., full exoneration from fine): its joint and several liability is limited to its direct or indirect purchasers, and as far as other injured parties are concerned, an immunity recipient may only be found jointly and severally liable if these victims cannot obtain full compensation from the other infringers.
XV FUTURE DEVELOPMENTS AND OUTLOOK
Substantial changes to the current regime relating to individual claims are to be expected with the implementation of the Damages Directive in French law.
In light of the Draft Implementing Legislation, the most significant amendments should concern:
- a The disclosure of evidence (see Section V, supra).
- b The effect of final national decisions: the current principle whereby a decision of the Competition Authority does not bind the courts contradicts the provisions of Article 9 of the Damages Directive, which require that when a national court hears an action for damages, the final decision of the competition authority of the same Member State or its courts of appeal shall establish conclusively the infringement of competition law, while before the courts of another Member State, such a decision must be presented and constitute at least prima facie evidence of infringement. Therefore, the final decision of the Competition Authority shall constitute the irrefutable proof of the fault before French courts.
- c The rebuttable presumption that a cartel causes harm will require a change to the rules related to the ‘passing-on defence’ to ensure compliance with the principles laid down in Articles 12 and 13 of the Damages Directive. Indeed, both the current regime and the Damages Directive are based on the same presumption that an overcharge levied on a direct purchaser is passed on to indirect purchasers. So far, French case law requires the claimant to prove that ‘no passing-on’ has occurred, whereas the Damages Directive draws a distinction depending on the type of purchaser. In general, the Damages Directive states that the burden of proving that the claimant has passed on the overcharge to its customers lies on the defendant. The Draft Implementing Legislation intends to go even further by creating a general rebuttable presumption – for both direct and indirect purchasers – that the claimant did not pass on the overcharge to its own customers. If the claimant is an indirect purchaser, Article 14 of the Damages Directive states that the claimant must prove that an overcharge has been passed on to him or her, but that he or she can benefit from a presumption of passing-on (which can be rebutted by the defendant) if he or she can show that the infringement caused an overcharge to the direct purchaser, and that he or she purchased goods or services affected by the infringement. The Draft Implementing Legislation intends to amend the Commercial Code accordingly.
- d With regard to the limitation period of five years, the current rules would necessitate clarification in two ways to comply with Article 10 of the Damages Directive: (1) specifying the date of the starting point, which shall run from the date of knowledge of the infringement, the resulting harm, and the identity of the infringer, but shall not begin before the infringement has actually ceased;78 and (2) creating a suspension mechanism whereby the limitation period shall be suspended or interrupted by the initiation of proceedings by a competition authority and resumed only after a minimum period of one year following the final decision or termination of the procedure.79 At this stage, the Draft Implementing Legislation intends to amend the starting point in accordance with the Damages Directive, but the extent of implementation of the suspension mechanism remains unclear.
- e Finally, Article 17, Section 2 of the Damages Directive provides for a rebuttable presumption that cartel infringements cause harm. In this respect, however, the Draft Implementing Legislation goes beyond this rule as it generally refers to ‘prohibited practices’ (i.e., not only cartels). This proposed amendment may therefore be revised in order to be more in line with the Damages Directive’s provisions.
1 Marta Giner Asins is a partner and Arnaud Sanz is a senior associate at Norton Rose Fulbright LLP.
2 Directive of the European Parliament and of the Council 2014/104/EU of 26 November 2014 on certain rules governing actions for damages under national law for infringements of the competition law provisions of the Member States of the European Union. See Paris Commercial Court, 10 Medias/Amaury, 2 November 2015, where the Court quoted notably Article 9 of the Damages Directive (although not yet implemented under French law) in its decision to stay proceedings until the Supreme Court ruled definitely on the breach of competition rules. Article 9, Section 1 states that ‘Member States shall ensure that an infringement of competition law found by a final decision of a national competition authority or by a review court is deemed to be irrefutably established for the purposes of an action for damages brought before their national courts under Article 101 or 102 TFEU or under national competition law.’
3 Law No. 2016-1691 of 9 December 2016 on transparency, the fight against corruption and the modernisation of the economy (Article 148).
4 Law No. 2014-344 of 17 March 2014 on consumer protection.
5 Other class action regimes have been created in other areas of law: Law No. 2016-41 of 26 January 2016 relating to the modernisation of the French health system introduced a class action regarding pharmaceutical products (Article L1143-1 et seq. of the French Public Health Code). Law No. 2016-1547 of 18 November 2016 on the modernisation of justice of the 21th century introduced class actions in relation to environment, discriminations, and data privacy.
6 Law No. 2012-1270 of 20 November 2012 on the economic regulation in French overseas departments, and on various provisions related to overseas departments.
7 Before 2009, the French Competition Authority was known as the Competition Council. The expression ‘Competition Authority’ will, in this chapter, refer indistinctly to either the former Competition Council or the current Competition Authority.
8 See Article L462-3 of the Commercial Code. Article 6(a) of the Damages Directive also requires that oral and written statements by leniency applicants not be disclosed, thereby excluding documents obtained through leniency applications, which will significantly reduce the scope of what can be provided.
9 Law No. 2008-561 of 17 June 2008 on the reform of civil statutes of limitations.
10 Lycées Île de France, Paris Court of First Instance, 17 December 2013. In this case, the claim introduced by the Île-de-France regional administration against several building companies previously sanctioned by the Competition Authority for bid-rigging practices relating to tenders for the construction of schools was time-barred. Although this decision was based on the previous regime (since it concerned facts that occurred more than a decade earlier), it underlines the fact that identifying the limitation position as early as possible is a key element in any private damages procedure.
11 See for example Paris Court of Appeal, 2 July 2015, EDF et ERDF v. Nexans et Prysmian, where EDF and ERDF unsuccessfully attempted to obtain damages from Nexans and Prysmian after the Competition Authority sanctioned them for anticompetitive practices. Even though their claim was brought after the Competition Authority sanctioned Nexans and Prysmian for their anticompetitive practices, the Court found that the elements asserted by the claimants, including their economic studies, did not produce the basis for determining with certainty the damages alleged to have been suffered.
12 See, for example Switch v. SNCF, Paris Commercial Court, 26 April 2013, in which the Court granted €6.9 million as compensation for the damage suffered by a victim of an anticompetitive agreement (upheld by the Paris Court of Appeal, 14 December 2016). See, more recently, Outremer Telecom v. Orange/Orange Caraïbe, Paris Commercial Court, 16 March 2015, in which the Court condemned Orange and its subsidiary Orange Caraïbe to pay Outremer Telecom almost €8 million.
13 Ex-Article 1382. The Civil Code was substantially modified by Order No. 2016-131 of 10 February 2016 reforming the contract law and the general regime and proof of obligations. However, this reform did not impact the principles of tortious liability.
14 Switch v. SNCF, Paris Commercial Court, 26 April 2013 (upheld by the Paris Court of Appeal, 14 December 2016); Sté JCB Service, Paris Court of Appeal, 26 June 2013; even in the absence of prior formal condemnation of the infringement (e.g., commitment decision), the judge may use the elements gathered by competition authorities to characterise a fault in the frame of a private action (see for example DKT International v. Eco Emballages and Valorplast, Paris Commercial Court; 30 March 2015, Kontiki v. President of the French Competition Authority and the Ministry of Economy, Supreme Court, 7 October 2015 and Sté JCB Service, Supreme Court, 6 October 2015).
15 Subiteo v. France Télécom, Supreme Court, 25 March 2014.
16 Article 2224 of the Civil Code.
17 Ex-Article 1147.
18 As amended by the Decree of 11 November 2009.
19 Article D442-3 of the Commercial Code; X v. Y, Angers Court of Appeal, 2 December 2014.
20 The Paris Court of Appeal recently considered that the administrative courts do not have jurisdiction to rule on a damages action based on tort liability (such as in the case of an anticompetitive practice) unless a special legislation authorises them to do so (Region Ile de France v. M. Nautin et a., Paris Court of Appeal, 24 June 2015). However, on 16 November 2015, this ruling was declared void and inexistent by the Conflict Tribunal on the grounds that administrative courts have jurisdiction because the damages action concerned an administrative contract.
21 In 2008, the Administrative High Court stated that administrative courts are competent to hear claims resulting from anticompetitive practices implemented in the frame of a tender process/performance of a public contract (SNCF, 19 March 2008). More recently, the Paris Administrative Court has recognised its jurisdiction to examine a private action launched by the SNCF against several of its suppliers following anticompetitive practices implemented by them, since the contracts at stake were of an ‘administrative nature’ (SNCF v. Hoffmann et a., 2 April 2014).
22 Bes Ravise v. France Télécom, Supreme Court, 3 June 2014, confirmed by Paris Court of Appeal, 27 May 2015.
23 See also Article 138 et seq. of the CPC.
24 Semavem v. JVC France, Supreme Court, 19 January 2010.
25 Outremer Telecom v. Orange Caraïbe and France Télécom, Paris Commercial Court, 8 November 2011.
26 Ma Liste de Courses v. Highco, Paris Commercial Court, 24 August 2011.
27 Article 138 of the CPC allows the judge to order, at the request of one party to the proceedings, a third party, such as the Competition Authority, to disclose a document to which such party did not have access.
28 Ma Liste de Courses v. Highco, Paris Commercial Court, 16 March 2012.
29 Ma Liste de Courses v. Highco, Paris Court of Appeal, 20 November 2013.
30 See also DKT International v. Eco Emballages and Valorplast, Paris Commercial Court, 16 March 2012 quashed by Paris Court of Appeal, 24 September 2014. The Paris Court of Appeal determined that it was up to the claimant to produce the documents it was provided with in the course of the proceedings before the Competition Authority since their disclosure was necessary for the claimant to exercise its rights. In a subsequent judgment dated 30 March 2015, the Paris Commercial Court accepted to take into account the said documents which had been disclosed by the claimant.
31 See for example, Outremer Telecom v. Orange/Orange Caraïbe, Paris Commercial Court, 16 March 2015, in which a party produced two different economic studies in order to help the court evaluate the damage suffered.
32 See for example, Bes Ravise v. France Télécom, Paris Court of Appeal, 27 May 2015.
33 Bottin Cartographes v. Google, Paris Commercial Court, 31 January 2012 and Paris Court of Appeal, 20 November 2013.
34 Opinion of the Competition Authority 14-A-18, 16 December 2014.
35 Paris Court of Appeal, 25 November 2015.
36 Luk Lamellen v. Valeo, Paris Court of First Instance, 26 January 2005, and Opinion of the Competition Authority No. 05-A-20 of 9 November 2005 relating to a request from the Paris Court of First Instance concerning the case between Luk Lamellen and Valeo, BOCCRF No. 10, 8 December 2006, p. 1006.
37 Carrefour Proximité France v. Etablissements Segurel et fils, Supreme Court, 23 September 2014 and Paris Court of Appeal, 26 May 2009.
38 The three ‘consumer’ actions are the following:
a Article L421-1 of the Consumer Code introduces a procedure protecting consumers’ collective interest whereby a ‘duly declared association’ whose statutory object specifies the protection of consumer interests may exercise the rights conferred upon civil parties in respect of events directly, or indirectly, prejudicing the collective interest of consumers;
b Article L421-2 of the Consumer Code empowers consumers’ associations to request any measure to stop illicit actions or to remove illicit clauses from future contracts or those previously concluded with consumers; and
c Article L422-1 of the Consumer Code creates a joint representative action whereby an authorised, national representative association can bring a damages action on behalf of identified consumers who have all suffered individual damage from the same commercial conduct. Each consumer must give the association written authorisation of representation.
39 UFC Que Choisir, Paris Court of Appeal, 22 January 2010, which was fully confirmed by the Supreme Court (Supreme Court, 26 May 2011).
40 Air France v. Equilib, Paris Commercial Court, 31 January 2012.
41 Conseil National des Barreaux, Final Report on Third-Party Funding, 20–21 November 2015.
42 European Commission, DG Comp, Recommendation on common principles for injunctive and compensatory collective redress mechanisms in the Member States concerning violations of rights granted under Union Law (2013 OJ L201 60, 11 June 2013).
43 For larger developments on third-party funding, see The Antitrust Source, December 2016, Emerging Issues in Third-Party Litigation Funding: What Antitrust Lawyers Need to Know (Anne Rodgers, Peter Scott, Arnaud Sanz, and D Michael Brown). www.americanbar.org/content/dam/aba/publishing/antitrust_source/dec16_rodgers_12_12f.authcheckdam.pdf.
44 However, contrary to other jurisdictions, there is no need under French law for the victim to mitigate its damage to be able to recover its loss. See for example, Supreme Court, 19 June 2003 and Supreme Court, 25 October 2012.
45 For example, Subiteo v. France Télécom, Paris Court of Appeal, 21 December 2012, in which the Court admitted a loss of opportunity for Subiteo in not being able to supply alternative ADSL access, as compared with France Télécom services. However, in Lectiel v. France Télécom, the Supreme Court quashed the judgment of the Court of Appeal for excluding the claim related to the loss of opportunity due to the claimant’s illicit behaviour (Supreme Court, 3 June 2014, confirmed by Paris Court of Appeal, 27 May 2015 which appointed an expert to appraise the amount of damages).
46 SNCF v. Me Gilles Pellegrini (SWITCH), Paris Court of Appeal, 14 December 2016.
47 Doux Aliments v. Ajinomoto Eurolysine, Supreme Court, 15 June 2010.
48 Gouessant and Sofral v. Ajinomoto Eurolysine, Paris Court of Appeal, 16 February 2011 and Supreme Court, 15 May 2012.
49 Arkopharma, Nanterre Commercial Court, 11 May 2006.
50 Ibid. (authors’ translation).
51 Ibid. (authors’ translation).
52 For example, in January 2007, in a follow-on action from the European Commission’s Vitamins decision (Decision of 21 November 2001, COMP/37.512 Vitamins), the Paris Commercial Court rejected Juva’s claim for damages on the grounds that the evidence adduced to prove the damage suffered was insufficient (Juva v. Hoffmann-La Roche, Paris Commercial Court, 26 January 2007).
53 Gouessant and Sofral v. Ajinomoto Eurolysine, Paris Court of Appeal, 16 February 2011 and Supreme Court, 15 May 2012.
54 Doux Aliments v. Ajinomoto Eurolysine, Paris Court of Appeal, 10 June 2009.
55 Doux Aliments v. Ajinomoto Eurolysine, Supreme Court, 15 June 2010.
56 Doux Aliments v. Ajinomoto Eurolysine, Paris Court of Appeal, 27 February 2014 and corrigendum 19 June 2014.
57 Damages Directive, Article 13.
58 Damages Directive, Article 14.
59 Lectiel v. France Télécom, Supreme Court, 23 March 2010.
60 See, a contrario, SA la Montagne, Paris Court of Appeal, 17 September 2014, where the Court decided to conduct its market analysis on its own.
61 For example, the Paris Court of Appeal requested an opinion to determine whether Google has abused its dominant position notably by applying predatory prices in the online mapping market (Bottin Cartographes v. Google, Paris Court of Appeal, 20 November 2013). In its recent ruling which overturned the first instance judgment, the Paris Court of Appeal followed the opinion given by the Competition Authority dated 16 December 2014 in its entirety which concluded that the alleged abuse was not established (Paris Court of Appeal, 25 November 2015).
62 For example, see Petanque Longue v. La Boule Obut, Paris Court of Appeal, 7 December 2016, suspending the application of allegedly discriminatory commercial conditions applied by a dominant undertaking, pending the Competition Authority’s decision.
63 See the case Bes Ravise v. France Télécom as mentioned in Supreme Court, 3 June 2014.
64 For example, Digicel v. Orange Caraïbe and France Télécom, Paris Commercial Court, 11 May 2012; 1plusV v. Google, Paris Commercial Court, 7 June 2012; Fédération régionale des syndicats d’exploitants agricoles de la Région Bretagne v. Compagnie Financière et de participations Roullier and Timab Industries, Rennes Court of First Instance, 17 October 2013, following the Commission decision in the Animal Feed Phosphates cartel. More recently, see, Paris Commercial Court, 10 Medias/Amaury, 2 November 2015.
65 1plusV v. Google, Paris Commercial Court, 7 June 2012.
66 Lectiel v. France Télécom, Supreme Court, 23 March 2010.
67 Switch v. SNCF, Paris Commercial Court, 26 April 2013; Sté JCB Service, Paris Court of Appeal, 26 June 2013, confirmed by Supreme Court, 6 October 2015.
68 In Optical Budget v. MGEN, Paris Court of Appeal, 7 May 2015, the Court found that MGEN did not hold a dominant position based on a Competition Authority’s decision adopted four years earlier in the context of a merger notification authorising the creation of a joint venture by several parties, including MGEN. See also DB Enterprise v. Marc Orian, Paris Court of Appeal, 22 May 2014.
69 Article 16(1) of Council Regulation (EC) No. 1/2003 of 16 December 2002 on the implementation of the rules on competition laid down in Articles 81 and 82 of the Treaty, OJ L 1, 4 January 2003, pp. 1–25.
70 Carrefour Proximité France v. Klemon, Metz Commercial Court, 27 January 2015.
71 Article L463-2 of the Commercial Code.
72 Articles L463-4 and R463-13 of the Commercial Code.
73 Article R463-15 of the Commercial Code.
74 Article 1441-4 of the CPC.
75 Luk Lamellen v. Valeo, Paris Court of Appeal, 10 May 2006.
76 For example, in Carrefour Proximité France cases (Paris Court of Appeal, 28 September 2011; Supreme Court, 18 December 2012; Paris Court of Appeal, 6 March 2013).
77 Supreme Court, 11 July 1892; Conflicts Tribunal, 14 February 2000.
78 Article 10.2 of the Damages Directive.
79 Article 10.4 of the Damages Directive.