France: Competition News January 2016

Last Updated: 1 February 2016
Article by Emmanuelle van den Broucke and Sara Pomar

Record fine imposed on Orange by the French Competition Authority despite being reduced by the early application of the settlement procedure

By decision of December 17, 2015, the French Competition Authority imposed a record fine of €350 million on Orange for implementing four series of anti-competitive practices in various electronic communication markets. This was the biggest fine ever imposed by the French Competition Authority on a company on an individual basis.

Initially, Bouygues Télécom, one of Orange's biggest competitors, brought proceedings against it before the French Competition Council (now the Competition Authority) in 2008. This initial referral concerned a series of practices implemented by Orange in the electronic communications sector, targeting non-residential clients, in particular on the business mobile telephones market.

Bouygues criticized Orange in particular for using loyalty and coupling discount schemes, as well as for implementing predatory pricing, and argued that these practices constituted an abuse of its dominant position within the meaning of Articles L. 420-2 of the Commercial Code and Article 102 of the TFEU. In 2010, SFR then brought proceedings before the Authority for unfair practices implemented by Orange, on the same mobile telephone market targeting non-residential clients.

Despite Bouygues Télécom's withdrawal in 2014, the Authority notified Orange of four objections of abuse of dominant position on March 6, 2015, which the offending company undertook not to challenge on November 6, 2015.

In the meantime, the Loi Macron entered into force on August 7, 2015 and with it a new settlement procedure applicable before the Authority. By virtue of this procedure, provided that it does not contest the objections made against it, an offending company can be offered a fine for an amount between a minimum and maximum amount, on the basis of a negotiation then a mutual agreement with the General Case Handler. This procedure replaces the former "no-challenge" procedure and is now provided for in Article L. 464-2, III of the Commercial Code.

While, in principle, this settlement procedure can only apply to cases in which the statement of objections was received after the entry into force of the Loi Macron, the Authority's investigation service nonetheless made the decision to draw inspiration from this new process when handling Orange's case, offering it a maximum fine of €350 million, an amount which the company accepted and which the Authority then ratified in its decision.

On the merits, the Authority judged that all of the practices reported by competitors were proven. In particular, it considered that Orange had abused its dominant position (i) by promoting its commercial services in the access to information regarding the local loop, (ii) by unfairly ensuring the loyalty of its business customers through the "changer de mobile" (change mobiles) program, (iii) by implementing a discounts system encouraging companies to remain clients and to entrust all the lines in their park to Orange, and (iv) by implementing an exclusivity discount on virtual private network offers targeting businesses.

In addition to the penalty imposed, the Authority handed down a number of injunctions against Orange, pursuant to which the sanctioned company undertakes to cease ongoing abusive practices and not to reiterate such practices.

Despite the amount involved, Orange declared that it would not appeal the decision. Surely this is one of the major advantages of this settlement procedure for the Authority. While the company can better predict the maximum amount of the fine if it chooses not to contest the objections, it is, however, more difficult for it to contest the amount, i.e. fewer reversals possible of the Authority's decisions by the Paris Court of Appeal...

The General Court of the European Union to leave an airline cartel unsanctioned by annulling a decision of the Commission due to contradictory grounds

The General Court of the European Union recently annulled a decision handed down by the European Commission against a cartel of around twenty airlines due to contradictory grounds. Such severe censure of a Commission decision is so rare in practice and has such serious consequences that it deserves particular attention.

In 2010, the Commission had adopted a decision finding an anti-competitive cartel between several airlines which had coordinated their behavior regarding the pricing of airfreight services. Following an appeal before the Court, it found a contradiction between, on the one hand, the grounds of the appealed decision, according to which all of the companies concerned are accused of having participated in a single and continuous infringement regarding all routes covered by the cartel and, on the other hand, the operative part of said decision which sets forth either four separate single and continuous infringements or a single and continuous infringement for which liability is only attributed to the airlines referred to in each of the infringements cited in the operative part.

The Court then verified whether, as a result, the concerned companies' rights of defense were infringed and found in this respect that the contradictions do not allow them to understand the nature or the scope of the infringement(s) observed, which is contrary to the principle of effective judicial protection. Moreover, the Court found that it cannot control the lawfulness of the appealed decision. As national courts are bound by the Commission's decision, the operative part must be unequivocally understood in order to draw the necessary conclusions with respect to damages. According to the Court, as a result, the appealed decision is marred by contradictory grounds, justifying its annulment.

While this annulment is justified on a purely theoretical level, it has serious practical consequences. As the Commission's annulled instrument no longer has any legal effect, its findings regarding an anti-competitive cartel between airlines disappears retroactively. In principle, the institution which had adopted the annulled instrument is of course bound to fill the legal void, but in the case of lack of grounds, it is very difficult for the Commission to remedy an irregularity already committed. The airfreight cartel may therefore remain unsanctioned and on top of that be reimbursed for the fines already paid to the Commission.

Demanding the maintenance of volumes subject to penalties during the notice period is not in itself a significant imbalance under French law

The organization representing dispensing pharmacists sought the CEPC's (French commercial practices review panel) opinion on the scope of various clauses included in the terms and conditions of sale fixed by certain full-line wholesalers with respect to pharmacists.

In particular, the CEPC was asked to give its opinion on the validity of (i) clauses obliging pharmacists to maintain a certain volume of orders during the notice period in case of termination of commercial relations, and (ii) the provision of a penalty clause in case of non-compliance with this obligation.

The CEPC considered that such clause does not in itself seem imbalanced within the meaning of Article L 442-6, I, 2° of the Commercial Code, provided that the penalty seems to comply with best practices. However, the CEPC indicated that this is subject to the risk that such clause could constitute if, depending on the number of full-line wholesalers, it could prevent the redeployment of the activity due to a lack of alternative solutions.

Dentons is the world's first polycentric global law firm. A top 20 firm on the Acritas 2015 Global Elite Brand Index, the Firm is committed to challenging the status quo in delivering consistent and uncompromising quality and value in new and inventive ways. Driven to provide clients a competitive edge, and connected to the communities where its clients want to do business, Dentons knows that understanding local cultures is crucial to successfully completing a deal, resolving a dispute or solving a business challenge. Now the world's largest law firm, Dentons' global team builds agile, tailored solutions to meet the local, national and global needs of private and public clients of any size in more than 125 locations serving 50-plus countries. www.dentons.com.

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.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Events from this Firm
15 Nov 2018, Seminar, London, UK

The FCA and other bodies have been active recently across a number of areas relevant to financial litigators, contentious regulatory lawyers and financial crime specialists.

15 Nov 2018, Conference, London, UK

Dentons Compliance Team cordially invites you to Dentons Compliance Day 2019 – our annual conference on compliance related issues.

15 Nov 2018, Business Breakfast, London, UK

The FCA and other bodies have been active recently across a number of areas relevant to financial litigators, contentious regulatory lawyers and financial crime specialists.

 
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
 
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions