On 18 February 2014, the French Supreme Court (Cour de
Cassation) quashed a judgment of the Paris Court of Appeal and
an earlier decision of the French Competition Authority
("FCA"), which imposed fines on construction companies
Pradeau Morin and Degaine of € 4.5 million and of
€ 536,000, respectively. The Supreme Court's judgment
largely focused on the legal consequences for subsidiaries guilty
of competition law infringements of being a member of a large
multi-national group (i) when fixing the amount of the fine and
(ii) when dealing with the inability of the subsidiary to pay, in
circumstances where the subsidiary was found to have acted
independently from its parent company on the relevant market.
On 26 January 2011, the FCA imposed fines totalling
€ 9.8 million on fourteen companies for bid-rigging in
the historical monument restoration sector in three French regions
in breach of the French equivalent of Article 101 TFEU (see VBB
Competition, Volume 2011, No. 2, available at
www.vbb.com). The Paris Court of Appeal upheld this decision
and an appeal before the Supreme Court subsequently followed.
The Supreme Court upheld Pradeau Morin's challenge to its
€ 4.5 million fine, which the FCA had calculated by
taking account of Pradeau Morin's position of a subsidiary of a
multi-national group, Eiffage. More particularly, in setting the
fine imposed on Pradeau Morin, the FCA had increased the basic
amount of the fine for deterrence purposes to take into
consideration the economic power and the financial capacity of the
Eiffage group as a whole. While the Supreme Court did not question
this principle, it criticised the FCA for having breached the
principle of personal responsibility. In particular, the Court
pointed out that the FCA had found that Pradeau Morin had acted
independently from its parent company on the relevant market and
had not examined (i) whether Pradeau Morin's membership of the
Eiffage group had played a role in the implementation of the
anti-competitive practices or (ii) whether Pradeau Morin's
membership of the Eiffage group had impacted on the gravity of the
Similarly, the Supreme Court overturned the parts of FCA's
decision and the Court of Appeal's judgment in which
Degaine's claim to take account of its inability to pay to
reduce the amount of the fine was dismissed on the grounds that it
belonged to a large multi-national group, Vinci. As Degaine was
found to have acted independently on the relevant market, the
Supreme Court criticised the FCA and the Court of Appeal for not
having determined whether Degaine had in fact the capacity to make
its parent company Vinci contribute to the payment of the
As a result, the Supreme Court has remitted the case to Paris
Court of Appeal to determine the amount of the fines to be paid by
Pradeau Morin and by Degaine in accordance with its ruling.
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