France: French Court Of Cassation Orders The Re-Examination Of The Justification Of The Fine Imposed On Orange In The French Mobile Phone Saga

On 7 April 2010, the French Court of cassation ("the Court") issued a decision upholding a Paris Court of Appeal's judgment fining the mobile operators, SFR and Bouygues Télécom, for unlawful exchange of information. The Court has however asked the Paris Court of Appeal to re-examine the fine imposed on Orange, the third French mobile operator, who was also involved in the unlawful exchange of information.

In 2005, the French Competition Council fined all three mobile operators for exchanging information and for entering into an agreement to stabilise their respective market shares (see Community Week issue 253 ). The Paris Court of Appeal confirmed this decision in 2006 (see Community Week issue 305 ). However, in 2007, the Court ruled that the Paris Court of Appeal had insufficiently reasoned its judgment on the unlawful exchange of information as it did not demonstrate that the exchange had an anticompetitive effect (see Community Week issue 330 ).

On 11 March 2009, the Paris Court of Appeal re-examined its findings and supplied more details about the anticompetitive effect of the exchange of information before concluding that the exchange had led to increased transparency in the market and revealed the respective strategies of the three mobile operators allowing them to reduce competition in the mobile telephone market (see Community Week issue 415 ).

In its latest decision, the Court confirmed the €16 and €35 million fines imposed on Bouygues Télécom and SFR respectively, but asked the Paris Court of Appeal to re-examine the €41 million fine imposed on Orange.

The Court felt that the Paris Court of Appeal had failed to demonstrate the damage caused to the economy by Orange through its participation in the unlawful exchanges of information. It asserted that damage to the economy cannot be presumed in the case of a cartel but rather it must be assessed according to the size of the market, the fact that all of the operators active in the mobile telephone market participated in the exchange of information, as well as the weak price sensitivity of the mobile telephone market. The last element of assessment was missing in the Paris Court of Appeal reasoning.

The next step is therefore for the Paris Court of Appeal to re-examine the fine imposed on Orange.

To view Community Week, Issue 466 - 9 April 2010 in full, click here.

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