Last month, the French Competition Authority ("the Authority") updated the "Procedural Notice" for its leniency program. (Click here for the 2015 version of the Notice in French and here for the 2009 version of the Notice in English.) As in the U.S., the French leniency program allows enterprises that report cartel activity and cooperate in investigations to avoid fines and other penalties.
Subject to certain conditions, the program provides total immunity from fines (Type 1 leniency) for (1) an enterprise that is the first to report an illegal agreement that the Authority previously did not know about; or (2) the first to submit proof of an illegal agreement that the Authority was aware of, but did not have sufficient evidence to prove.
An enterprise is eligible for partial reduction of fines–generally up to 50%–if it provides evidence that adds value to the Authority's investigation. This is known as a Type 2 leniency application.
The new Notice has three goals:
- It clarifies how the leniency program is implemented;
- It incorporates new leniency principles that have been developed since the last revision in 2009; and
- It reflects changes made in the 2012 European Competition Network model leniency program
The new Notice achieves these goals through a number of key provisions:
First, the Authority represents that it will issue press releases announcing any raids it has conducted—without identifying the target—so that companies in that industry who were not raided may have equal access to the leniency program and be given an opportunity to investigate their own conduct and apply for leniency if appropriate. The Authority also indicates that it will announce when it has closed an investigation, a practice that will provide transparency and assist companies in evaluating their options.
Second, the new Notice establishes a schedule of Type 2 fine reductions applicants are eligible to receive based on how quickly they come forward. These reductions are:
- 25% to 50% for the first applicant to come forward;
- 15% to 40% for the second applicant; and
- Up to a 25% reduction in fines for subsequent applicants.
This schedule is designed to provide certainty for companies considering whether to participate in the leniency program while still allowing the Authority flexibility to evaluate how valuable a company's cooperation was to its investigation.
The Notice also provides special protections to companies that offer information that results in an increase in the total fine amount. Such a company is only subject to a reduced fine based on the lower fine that would have resulted absent the information it provided.
Third, the Notice provides information about the role of the Leniency Officer, an Authority official who is available to provide information to companies interested in learning more about the leniency program prior to applying. The Leniency Officer also works with investigators to determine the applicants' order of participation in the program.
Fourth, the Notice reflects the new procedures in the 2012 European Competition Network model leniency program for handling leniency applications that are made to the European Commission as well as to national competition authorities. The Notice provides that companies cooperating with the European Commission may file either Type 1 or Type 2 "summary applications" with the Authority. These applicants receive leniency priority as if they had submitted a free-standing application to the Authority. They are required to provide updates if they submit new information to the European Commission or if it rejects their applications.
Fifth, the Notice clarifies that a parent company must submit its own separate leniency application if it has divested a subsidiary that engaged in cartel activity.
Finally, the Notice clarifies procedures for maintaining an applicant's leniency priority order and status in the leniency program.
It will be interesting to see if the added certainty and procedural safeguards set out in the new Notice increases participation in the leniency program in France. Other EC member states may adopt similar safeguards to provide incentives to companies engaged in cartel activity to self-report and apply for leniency.
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