On 19 January 2010, the Paris Court of Appeal (the
"Court") significantly reduced the fines imposed by the
French Competition Authority (the "Authority") on steel
companies found to have been involved in cartel activities.
The amount of the fines was decreased from a total of approx.
€575 million to less than €75 million.
The Court confirmed the anticompetitive practices assessment
made by the Authority, but reproached the Authority for not having
taken sufficient account of the companies' mitigating
behaviour. It found that the Authority had clearly failed to
consider the major effect that the economic crisis had had on the
steel industry and overplayed the economic harm caused by the
The Court also considered that the fines imposed were
disproportionate to the companies' turnover. Interestingly, the
Court used an unusual methodology to determine the amount of the
fines. It started from the 10% maximum legal ceiling and then
reduced the fine with mitigating circumstances.
Nevertheless, the Authority has criticized the Court's
decision on various grounds. The Authority claimed that this cartel
was the most significant, complicated and damaging that it has ever
encountered and that the Court should not have minimized the
cartel's economic harm.
In addition, the Authority is now facing a problem of
credibility. The Court's decision is in stark contradiction
with the Authority's usual policy which consists of imposing
dissuasive fines against companies involved in cartel
This may, however, not be the end of the matter. Both the
President of the Authority and the French Minister of Economy could
bring the case before the French Court of Cassation within one
month from the notification of the Court's decision.
To view Community Week Issue 456 - 29 January 2010 in
full, pleaseclick here.(http://www.sjberwin.com/publicationDetails.aspx?mid=1&rid=1&ast=4&adv=1&cid=2712)
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