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 infringement.
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 fines.
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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