Early in May, the French Competition Authority (the "Authority") published an article concerning its cartel sanctions policy.
This publication follows a decision issued by the Paris Court of Appeal on 19 January 2010 significantly reducing the fines imposed by the French Competition Council, the former Authority, on steel companies found to have been involved in cartel activities (see Community Week issue 456). It also anticipates the release of a report requested by the French Minister of Economy on sanction predictability. This report is planned to be sent to the Minister by the end of May.
The Authority reiterated that cartel fines are calculated based on four criteria: the seriousness of the practice concerned, the importance of the damage caused to the economy, the individual situation of the company concerned and the potential repetition.
The Authority also underlined the fact that even though numerous companies in France had been sanctioned in the recent past – 234 cases between 2007 and 2009 – the level of fines was not higher than in other Member States and remained far below the legal limit of 10% of the companies' turnover.
Further, the Authority also remarked that in light of the financial crisis, the decrease in the ability of a company to pay fines should only be considered as a mitigating circumstance where such a decrease in ability is clearly demonstrated.
Finally, there are certain issues which are still being debated, such as negotiated payment periods, managers' criminal liability in cases of participation in a cartel, and potential leniency for directors or managers if they are able to denounce a cartel.
The Authority has announced that it will publish guidelines on cartel sanctions by the end of the year.
To view Community Week, Issue 470 – 7 May 2010 in full, Click here.
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