France: Adoption Of "Macron" Bill: Broader Powers For The French Competition Authority

Last Updated: 15 October 2015
Article by Alexandra Berg-Moussa, Renaud Christol and Elsa Pinon

The bill for economic growth and activity ("Macron bill") was adopted on 10 July 2015 after three applications of an exceptional measure based on Article 49-3 of the French Constitution to bypass a parliamentary vote. It expands the French Competition Authority's ("the FCA") powers and confirms the key nature of competition law in the French economy.

Control of mass-market retailing

Firstly, the Macron bill extends to the whole territory the FCA's structural injunction power[1]. It could formerly be used only in DROM and COM[2] against dominant retailers or groups of retailers which position raised competition concerns resulting from high prices and margins. Hence, the bill unifies the applicable procedure to metropolitan companies to the one applicable to companies located in DROM and COM. If those companies or groups do not provide a satisfactory answer to the FCA's competition concerns expressed in a motivated report, the FCA can force them to modify or terminate the agreements or acts by which their economic strength has been constituted, or even to sell sales areas. The only remaining particularity of the procedure applicable to DROM and COM is the dominant position of the companies or groups of companies operating one or several retail stores which is not estimated through a market share higher than 50%, but "having regard to the specific constraints related to these territories resulting particularly from their geographic and economic characteristics". The bill also states that it is not possible to stay proceedings on an injunction taken on this basis, when it orders a divestment of assets.

The bill also introduces a procedure of prior notice of any new partnership agreement to the FCA. These agreements do not usually fall under merger control and are not consequently subject to the prior control of the FCA. This is why, the FCA, entrusted by the French minister for economics and the Committee on Economic and Monetary Affairs of the Senate, issued, on 31 March 2015, an opinion concerning the joint purchasing agreements in the food retail sector[3]. According to new Article L. 462-10 of the French commercial code, if a turnover threshold fixed by decree was reached, these agreements would be subject to FCA's control.

It must be noted that the procedure, formerly set forth by the bill, of consultation of the FCA in commercial planning about projects or any modification of projects of territorial coherence program, local and intercommunal urbanism plan or masterplan of the Île de France region, was not finally adopted.

An observatory of regulated legal professions

Secondly, the bill provides new powers to the FCA concerning legal auctioneers, clerks of commercial courts, court officials, insolvency receivers and administrators, notaries and lawyers specialized in seizure of immovable property, division, sales by auction and legal securities. The rates of these professions should now be cost-oriented and contain a reasonable compensation, defined on the basis of objective criteria. The FCA will issue an opinion before the fixation by decree of the Conseil d'État of the procedure for assessment of the relevant costs and reasonable compensation to be taken into account in setting rates[4]. The FCA is also likely to be consulted or may issue an opinion on its own initiative on these prices and regulated tariffs. In such case, its opinion will be issued after the consultation of authorized consumer associations, professional organizations and bodies[5].

The FCA should issue, as well every two years, a mapping proposal, addressed to ministers of justice and for economics, of zones where the implantation of offices of notaries, court officials or legal auctioneers appears useful to reinforce proximity or service proposal. Moreover, the FCA should, every two years, issue opinions about the freedom of establishment of these professions and of lawyers at the Cour de cassation and at the Conseil d'État. The FCA should also make recommendations to improve access to public and governmental offices, and to lawyers before the Cour de cassation and at the Conseil d'État [6].

In other words, the bill sets, within the FCA, an observatory of regulated professions.

Extension and modification of competition procedures

Lastly, the bill specifies, modifies or expands some procedures before the FCA.

The FCA is now entitled to require the communication and to obtain or take copy by all means and on any medium, of books, invoices and other professional documents of any nature, whoever detains them. Moreover, the FCA can (such as tax and customs administration) obtain communication of data kept and treated by telecommunication providers, i.e. their clients' detailed invoices[7]. It can also dismiss a complaint related to local practices, which falls within the minister for economics' competence[8].

Regarding settlement procedures, the bill introduces the possibility for the rapporteur general to submit to a company which received a statement of objections and does not contest them or part of them, a proposal for transaction which determines the maximum amount of the contemplated fine and which takes into account, if relevant, the undertakings submitted by the company. If it accepts the proposal, the FCA may decide on the penalty under the simplified procedure, i.e. without a prior written report[9]. The leniency program benefits from the simplified procedure as well, since the FCA may decide an exoneration of the penalty without a prior written report [10].

Concerning merger control, a first provision specifies that the thresholds set forth for DROM and COM (15 M€ and 5 M€ in the retail business sector) may be met by at least two of the undertakings concerned in different DROM or COM[11]. A second provision states that the derogation to the suspensive effect of the notification of the concentration requested by the notifying party and granted by the FCA will be void if, within three months after the realization of the operation, the FCA has not received the complete notification[12]. A third provision introduces a new stop the clock mechanism in phase I when the parties did not inform the FCA of a new fact as soon as it occurs or did not communicate whole or part of the requested information within the time limit granted[13]. A fourth provision limits to 85 working days after the opening of a detailed examination of the operation, the maximum deadline for such examination where commitments are submitted in extremis in phase II (less than 25 days before the expiry of the initial 65 days deadline), and if no stop the clock mechanism has been implemented[14]. A fifth provision allows the FCA to impose new injunctions when the parties to a merger did not comply with the injunctions or commitments contained in the authorization decision[15].

Improvement of the relationships between hotels and online booking platforms

Macron law goes further than the commitments taken by Booking before the FCA[16]: hotels are now allowed to propose on their own website inferior prices than those proposed by online booking platforms. Moreover, the contract between hotels and online platforms should now be a mandate contract. If no contract is concluded between a hotel and a platform, a fine of €30.000 for individuals and €150.000 for legal persons might be applied. This fine may only be applied to the online platform's representative. As a result, contracts concluded between hotels and online platforms before the enactment of Macron bill will no longer be effective as soon as it enters into force. The contract will have to specify the room price and other services and the hotel must remain free to grant a discount or any other advantage to the client. These provisions apply wherever the platform is located, as soon as the booking is made to the benefit of a hotel located in France[17].

Footnotes

[1] Articles L.752-26 and L.752-27 of the French commercial code.

[2] Overseas departments and regions and overseas collectivities.

[3] See our flash of April 2015 "Joint purchasing agreements under the scrutiny of the French Competition Authority".

[4] New Article L.444-2 of the French commercial code.

[5] New Article L.462-2-1 of the French commercial code.

[6] New Article L.462-4-2 of the French commercial code.

[7] Article L.450-3 of the French commercial code modified.

[8] Article L.462-8 of the French commercial code modified.

[9] Article L.464-2 III of the French commercial code modified.

[10] Article L.464-2 IV of the French commercial code modified.

[11] Article L.430-2 of the French commercial code modified.

[12] Article L.430-4 of the French commercial code modified.

[13] Article L.430-5 of the French commercial code modified.

[14] Article L.430-7 of the French commercial code modified.

[15] Article L.430-8 of the French commercial code modified.

[16] See FCA's Decision n° 15-D-06 of 21 April 2015 concerning practices implemented in the online hotel booking sector.

[17] See the new sub-section 2 of section 1 of chapter Ist of title Ist of book III of the French tourism code.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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