France: Competition Litigation Comparative Guide

1 Legal framework

1.1 Which laws regulate competition in your jurisdiction?

The French Commercial Code regulates competition in France.

Article L420-1 of the Commercial Code regulates restrictive agreements and practices by prohibiting any concerted actions and agreements which have as their object or effect the prevention, restriction or distortion of competition within a relevant market. This prohibition is aligned with EU competition law and, in particular, the prohibition on restrictive agreements and practices in Article 101 of the Treaty on the Functioning of the European Union (TFEU) and its interpretation in the case law of the Court of Justice of the European Union (CJEU).

Article L420-2(1) of the Commercial Code prohibits the abuse by an undertaking of its dominant position in a market. This prohibition and the relevant case law are aligned with EU competition law and, in particular, the prohibition on abuse of a dominant position in Article 102 of the TFEU and its interpretation by the CJEU.

Specific to French law only, there are several prohibitions on types of behaviour that are considered to constitute ‘unfair competition':

• Article L420-2(2) prohibits exploitative behaviour by an undertaking that is not dominant, including the imposition of unfair or onerous conditions on a dependent supplier; and
• Article L442-1 prohibits other unilateral abusive conduct even where the undertaking is not dominant and there is no effect on the market, including the sudden and unjustified termination of established commercial relationships.

Finally, EU competition law also applies in France, provided that the alleged practice or conduct may affect trade between member states, meaning that the practice or conduct has extraterritorial effect in the European Union outside of France.

1.2 Which authorities are responsible for enforcing the competition legislation? What is their general approach to enforcement?

The Competition Authority is the national competition regulator responsible for enforcing the competition legislation.

It is an independent administrative authority, responsible for responsible for investigating and preventing anti-competitive agreements and conduct. Although it acts on behalf of the French state, it is not subject to the government's authority in the fulfilment of its functions.

The Competition Authority works in close cooperation with the European Commission and the 27 other national competition authorities in the European Competition Network, the forum for discussion and cooperation among European competition authorities.

The Competition Authority is not a court or a judicial body, but it can:

• investigate infringements of competition law;
• impose injunctions on infringing parties;
• take binding decisions in competition cases; and
• where necessary, impose penalties for infringement.

It is proactive and can take investigations on its own initiative or following a complaint.

The only other body with authority in competition cases, and only in the case of small companies, is the Ministry of Economy through the Directorate-General for Competition, Consumer Protection and Repression of Fraud, which has jurisdiction over anti-competitive practices for small companies only. ‘Small companies' are defined as companies with:

• a turnover that is below or equal to €50 million each; and
• a combined turnover that is below or equal to €200 million (Article L464-9 Commercial Code).

2 Private claims

2.1 What types of private claim may be brought for breach of competition law in your jurisdiction?

A private claim for damages and interest can be brought by any party that suffered harm as a result of an anti-competitive practice or abuse of dominance. This action is provided for in Article L481.1 of the Commercial Code. A private party can also bring an action for an interim measures asking for the court to order the anti-competitive behaviour to end. These actions can be joined.

In the case of damages, the plaintiff must show the following:

• an infringement of the competition rules;
• that it has suffered damage; and
• a causal link between the infringement and the damage suffered.

This applies regardless of whether the Competition Authority has taken any decision or investigated the matter. In practice, it is easier to win a case and obtain a remedy if the Competition Authority has published an infringement decision, since this constitutes irrefutable proof of an infringement (Article L481.2) and the plaintiff thus need only show loss and a causal link to the infringement.

In addition, any infringement decision by the European Commission will be considered as proof of infringement by the French courts, since they are obliged to decide cases in a way that is coherent with commission decisions. In contrast, the decisions of other national authorities only give rise to a rebuttable presumption of infringement.

There are specialised commercial courts that have specific jurisdiction for competition litigation. The most important is the Paris Commercial Court; but cases can be brought in seven other commercial courts based in Bordeaux, Fort-de-France, Lille, Lyon, Marseille, Nancy and Rennes.

The Paris Court of Appeal has sole jurisdiction to hear appeals against decisions of these courts.

2.2 What is the legal basis for bringing a claim for breach of competition law?

The legal basis is set out in Article L481.1 of the Commercial Code.

3 Parties

3.1 Who has standing to bring a claim for breach of competition law?

Any person – natural or legal – can bring a claim for breach of competition law. The claimant must demonstrate locus standi, meaning that it must justify its interest in the case by demonstrating that this is personal, existent and legitimate. A ‘personal interest' is:

• a pecuniary or moral advantage that would result from the court's decision;
• that exists at the time of the claim; and
• that is direct.

Legal persons are not restricted from bringing actions, as long as:

• their statutes providing them with legal personality allow them to bring actions before the courts; and
• the criterion of a direct, personal, existent interest is fulfilled.

3.2 Can a claim for breach of competition law be brought against parties outside the jurisdiction?

Yes. The location of a defendant outside the jurisdiction does not prevent a claim being brought against it in France.

3.3 Can a claim for breach of competition law be brought against individuals, or only companies?

Claims for breach of competition law can be brought against companies only.

4 Collective actions

4.1 Is it possible to bring a collective action for breach of competition law in your jurisdiction? If so, what is the applicable regime?

French law provides for class action mechanisms, albeit in limited areas, and the law permitting class action is relatively recent. There are several cases pending, but no final court decisions have been issued in any class action cases to date.

Class actions became available in France in October 2014 under Law 2014-344, which introduced a limited form of class actions into French law (Articles L623-1 and following of the Consumer Code).

In competition cases, class actions can only be brought by consumer protection associations that have been registered for a least five years and whose statutory purpose includes the defence of consumer interests.

A class action for breach of competition law can be brought before the courts where persons in a similar situation have suffered damage caused by the same person as a consequence of the breach of competition law.

4.2 Do collective actions proceed on an ‘opt-in' or an ‘opt-out' basis?

The class action regime operates on an opt-in basis, meaning that natural persons and associations can opt into the class action being filed by the consumer association.

4.3 Do collective actions require certification? If so, what requirements must be met to obtain certification?

Class actions can only be brought by consumer protection associations that have been registered for a least five years and whose statutory purpose includes the defence of consumer interests. A court must assess whether the action is admissible; if it rules that it is, the court will define the group of persons affected and the publication methods for advertising the class action case so that other individuals can opt in.

5 Forum

5.1 In what forum(s) are claims for breach of competition law heard in your jurisdiction?

Eight specialised civil and commercial courts have jurisdiction to rule on anti-competitive practices and award damages at first instance: those in Paris (the most important), Bordeaux, Fort-de-France, Lille, Lyon, Marseille, Nancy and Rennes.

6 Bringing a claim

6.1 What is the limitation period for claims for breach of competition law in your jurisdiction?

The limitation period for making a claim is five years from the date on which the infringement ended. This is set out in Article L481-2 of the Commercial Code.

This period begins to run from the date on which the claimant knew or should have known of the existence of the cause of action – that is:

• the anti-competitive practice or behaviour;
• the fact that this caused it harm; and
• the identity of one of the authors of this practice.

The limitation period does not run until the anti-competitive practice has ceased.

An investigation by the Competition Authority or the European Commission may also affect the limitation period.

First, claimants may argue that they did not discover the cause of action until the Competition Authority published its decision confirming the anti-competitive conduct.

Second, the limitation period will not run against victims of a defendant that is the beneficiary of a total exemption under a leniency procedure with the Competition Authority, as long as they have been unable to act against the authors of the anti-competitive practice other than that beneficiary.

Finally, under the EU Damages Directive as implemented in French law, claimants have one year from publication of a final infringement decision to initiate a damages action.

6.2 What are the formal requirements for bringing a claim for breach of competition law?

The claimant must:

• have suffered directly from a breach of competition law by the defendant; and
• be able to demonstrate that its interest in the case is personal, existent and legitimate.

A ‘personal interest' is:

• a pecuniary or moral advantage that would result from the court's decision;
• that exists at the time of the claim; and
• that is direct.

6.3 What are the procedural and substantive requirements for bringing a claim for breach of competition law?

The proceedings are started by service of a writ or summons on the defendant, at its head office or its main office in France. The writ must be served at least 15 days before the court date and must be filed at the registry of the relevant commercial court. Once the writ has been filed, a supervising judge will agree a timetable with the parties for the timely exchange of pleadings and the production of documents, and will schedule the dates for filing of the briefs. Once the parties have exchanged all relevant documents, the judge will schedule a trial hearing date.

The claimant must provide evidence of a breach, including demonstrating:

• fault (ie, a breach of competition law, if this has not already been proven in a Competition Authority decision);
• the loss suffered; and
• causation.

6.4 What are the implications if a public enforcement action in relation to the same behaviour is pending? Can a claim still be brought?

Yes. A public enforcement action does not exclude a claim for breach of competition law by a private claimant in the French courts. However, the burden of proof is easier for a private claimant to meet if the Competition Authority has published an infringement decision, since this constitutes irrefutable proof of an infringement (Article L481.2) and therefore fault by the defendant.

6.5 How is jurisdiction over the claim determined?

The plaintiff must bring its action before the territorially competent court in France, even if the defendant is outside the jurisdiction. In actions for breach of French competition law, the plaintiff may bring the action before the court of the place:

• where the anti-competitive practice has taken place; or
• where the damage has been suffered.

6.6 How is the applicable law determined?

Whether French law applies to the matter depends on:

• the rules of international law; and
• where the claimant and defendant are based.

In general, the following rules apply in order to determine which French courts are competent:

• The French courts in civil matters may claim jurisdiction when the defendant is French, even in cases involving non-French plaintiffs.
• In tort actions (including a private claim for breach of competition law), the plaintiff may also bring an action before the court of the place:
• • where the anti-competitive practice has taken place in France; or
  • where the damage has been suffered, even if the defendant is foreign.

6.7 Under what circumstances must security for costs be provided?

A defendant cannot apply for an order requiring the claimant to provide security for costs in commercial matters.

6.8 Are interim remedies available in competition litigation? If so, how are they obtained?

Interim injunctions are available in civil court as provisions relief and can be granted in various circumstances, but mainly where there is risk of serious and imminent damage or where the matter is urgent. The claimant must compensate the defendant if it appears that it was not entitled to such relief. To date, interim relief has not been granted to a private claimant in a competition case.

7 Disclosure and privilege

7.1 What rules apply to disclosure in your jurisdiction? Do any exceptions apply?

The parties have a duty to disclose all documents on which they wish to rely in court. Therefore, each party can decide which documents it will use to support its arguments and these documents must be disclosed to the opposing party, subject to certain exceptions detailed below.

The rules on disclosure are set out in the Code of Civil Procedure (Articles 132–137). A party that mentions a document in its pleadings undertakes to communicate it to any other party to the proceedings. If disclosure of the document is not made, the judge can be asked to make an order requiring such disclosure. The judge sets – if necessary, under penalty – the time limit and, if necessary, the terms of the communication. The judge may exclude from the case any documents which have not been disclosed in due time.

Exceptions to disclosure include the following:

• legally privileged documents (see question 7.2);
• information that is protected under other laws, such as:
• • IP and copyright infringement laws;
  • medical secrecy laws; or
  • banking secrecy laws;
• information relating to personal privacy and access to databases; and
• information protected by the legislation on trade secrets.

7.2 What rules on third-party disclosure apply in your jurisdiction?

The rules on third-party disclosure are covered by the Code of Civil Procedure (Articles 139-141). If, during the proceedings, a party intends to refer to a document held by a third party, it may ask the judge to order the delivery of a copy or the production of the document. The judge, if he or she considers this request justified, has the power to order such delivery or production, in original, in copy or in extract, according to the case, under the conditions and under such terms as he or she may set. In the event of any difficulty, or if any legitimate impediment is invoked by the third party, the judge who ordered delivery or production may, where a formal request to this effect is made, withdraw or modify the decision. The third party may appeal the decision within 15 days.

7.3 What rules on privilege apply in your jurisdiction?

Any communications (both oral and written) between client and external counsel for the purposes of legal advice or litigation are privileged and confidential. Only legal counsel are subject to this confidentiality obligation. The client is free to disclose any communications it wishes.

There is a distinction between the privilege rules that apply to external counsel and in-house counsel communications. Only external counsel communications benefit from legal privilege. Communications between in-house lawyers and their clients do not benefit from legal privilege. There is no privilege for communications between in-house legal advisers and a party or third party in litigation.

8 Evidence

8.1 What types of evidence are permissible in your jurisdiction? Is expert evidence accepted?

Both written and oral evidence is permissible. Written documentary evidence is considered the most valuable type of evidence in civil and commercial litigation in France. Oral evidence is permissible, but the courts rarely rely on it. The court will decide on the value of any written or oral evidence in the case.

Expert evidence is accepted. The court may appoint the expert at the request of a party or on its own initiative. In such case, the scope of the expert's mission is defined by the judge. The expert's report will be filed with the court and then released to both parties, which can comment on it within a fixed timeframe.

One of the parties may also volunteer its own expert report, but this is treated as other evidence disclosed by the party.

8.2 What is the applicable standard of proof?

There is no specific or required standard of proof in French civil and commercial cases. The parties must prove any claims made to the satisfaction of the judge. This gives the judge discretion as to what evidence is needed. In practice, the courts require a high standard of proof; but this is more similar to the common law standard in civil cases (balance of probabilities) than the common law standard in criminal cases (beyond reasonable doubt).

8.3 On whom does the burden of proof rest?

The claimant bears the burden of proof.

8.4 What defences are typically available in competition litigation?

Three elements are needed to prove a claim in competition litigation:

• an infringement of competition law;
• harm to the claimant; and
• causation (linking the competition infringement and the harm).

The defendant can avail of the following defences to contest each of these elements:

• The defendant can defend itself by contesting whether there has been any infringement of the competition law and contending that there is thus no fault. In relation to anti-competitive agreements, it could argue that it should benefit from an exemption because, for example, the anti-competitive agreement has pro-competitive benefits. In relation to alleged abuse of a dominant position, the defendant could argue that it has an objective justification for any alleged abuse of dominance.
• It can also argue that there have been no anti-competitive effects from the alleged behaviour and therefore that the claimant has suffered no harm.
• Finally, it could argue that there is no link between the alleged harm suffered and its alleged anti-competitive behaviour.

9 Settlement

9.1 Can the proceedings be discontinued without a full trial? If so, how; and what are the implications?

The French courts encourage settlement and a court will suspend the proceedings if the parties wish to engage in mediation or conciliation at any stage of the proceedings. The terms of any settlement are confidential and the parties are not permitted to disclose them, except in exceptional circumstances – for example, to protect a party's right in a separate and subsequent dispute.

9.2 In the case of collective actions, is collective settlement possible? If so, how; and what are the implications?

Settlement in a class action is possible and this has been the outcome in at least two class actions filed since the introduction of class actions in French law in 2014.

10 Court proceedings

10.1 Are court proceedings in your jurisdiction public or private? If the former, are any options available to the parties to keep the proceedings or related information confidential?

Court proceedings in France are public. A litigant can request private or confidential proceedings, but this possible only in limited circumstances and in civil and commercial litigation confidentiality is rarely granted. The exceptions are in cases involving insolvency proceedings. A judge can also grant confidentiality to protect trade secrets. The documents exchanged between the parties' counsel as part of the litigation are protected by professional privilege and are confidential.

10.2 How do the court proceedings unfold in your jurisdiction?

The proceedings are commenced by service of a writ or summons on the defendant at its head office. The writ must be served at least 15 days before the court date and must be filed at the registry of the relevant commercial court. Once the writ has been filed, a supervising judge will agree a timetable with the parties for the timely exchange of pleadings and production of documents, and will schedule the dates for filing of the briefs. Once the parties have exchanged all relevant documents, the judge will set a final date and schedule a trial hearing date. No additional filings can be made after this date.

At the trial, the parties argue their cases based on the written documentary evidence; they rarely use witness statements or oral evidence, although a judge can require that a witness be heard. The claimant must provide evidence that:

• there has been an infringement of competition law;
• it has suffered loss; and
• the anti-competitive agreement or behaviour has caused the loss.

After the hearing, the judge will issue a final decision. This is subject to a full appeal to the Paris Court of Appeal.

10.3 What is the typical timeframe for proceedings?

The timeframes differ, as cases tend to stop and start as the parties request stays in order to:

• gather evidence;
• respond to pleadings;
• request the appointment of experts by the court;
• engage in settlement negotiations; and
• await any developments in parallel public investigations by the Competition Authority.

For this reason, it is difficult to give an exact timescale, but it takes at least 18 months from initial filing of the case to a final decision.

10.4 What rules apply to the joinder of third parties?

A third party may join proceedings before the courts as a voluntary party to the case by:

• showing a legal interest in the proceedings;
• bringing its own claim; or
• supporting the claim by another party.

The third party will need to demonstrate locus standi like any other party, meaning that it must justify its interest in the case by demonstrating that its interest in the case is personal, existent and legitimate.

10.5 To what extent do the decisions of national or foreign competition authorities influence the court's decision?

Decisions of the Competition Authority have a direct impact on the court's ruling. Where the Competition Authority has published an infringement decision, this constitutes irrefutable proof of an infringement (Article L481.2 of the Commercial Code) and thus of fault in the case. This means that the claimant in a competition case for damages need not prove fault and need only refer to the Competition Authority's decision.

The courts are also obliged to follow decisions of the European Commission in competition cases. Any infringement decision of the European Commission is considered proof of infringement by the French courts, as they are obliged to decide cases in a way that is coherent with decisions of the commission.

In contrast, the courts are not obliged to follow or apply decisions of other foreign competition authorities; such decisions give rise only to a rebuttable presumption of infringement.

11 Remedies

11.1 What remedies are available in competition litigation in your jurisdiction?

A court can order the defendant to put an end to anti-competitive practices or modify its behaviour. It can also order interim measures at the request of the claimant.

The court can award damages to claimants for loss caused by the anti-competitive conduct. Damages are intended to compensate for actual loss and must relate to a loss suffered as a result of the anti-competitive conduct or agreement. To obtain damages, the claimant must prove:

• a fault;
• a loss or prejudice; and
• a causal link between them.

The Competition Authority is the only body that can impose a fine as a penalty for breach of competition law. The court does not have the power to impose a fine for anti-competitive conduct on defendants.

11.2 Are punitive damages awarded in your jurisdiction?

No. There are no punitive damages in France.

11.3 Will the courts consider any fines imposed by the competition authorities in deciding on the quantum of damages? What other factors will it consider in this regard?

The fines imposed by the Competition Authority do not influence the level of damages. Under French law, damages are intended to compensate victims by restoring them to the position they would have been in prior to the infringement of competition law; they are not punitive. The penalty element of the fine and the quantum are not relevant to the court's calculation of damages.

Damages are based on loss that is a immediate and direct consequence of the breach, meaning that indirect damages which are too far from the causal chain of the circumstances to be linked to the infringement will not be compensated. There is no specific definition of direct or indirect damages; this will depend on the court, the circumstances and the infringement itself. The loss must be certain, meaning that it must not be merely hypothetical.

In addition, the courts will award compensation for ‘intangible losses', which are future losses – for example, lost earnings and loss of profits. Compensation for these is calculated by reference to the probability of such losses.

12 Appeals

12.1 Can the decision of the court or tribunal be appealed? If so, on what grounds and what is the process?

The court's ruling can be appealed to the Paris Court of Appeal, which has exclusive jurisdiction to hear appeals of the rulings and judgments of the eight specialised commercial courts in competition damages cases. The parties can appeal the judgment on both facts and law within one month of notification of the judgment.

After the Court of Appeal judgment, a further appeal is possible to the Court of Cassation (the highest court), but this is only to review any legal and procedural errors in the lower courts' decisions.

13 Costs, fees and funding

13.1 What costs and fees are incurred when litigating in your jurisdiction? Can the winning party recover its costs?

Under French law, the lawyer must conclude a written fee agreement with its client that specifies:

• the amount of the fees and/or a method for determining the fees; and
• the various legal costs envisaged in bringing the action.

These legal costs can include:

• translation fees;
• experts' fees; and
• court filing fees.

The cost of bringing a claim for an infringement of competition law in France is difficult to estimate, as it depends on various factors; but it will be at least €150,000 at first instance.

The winning party can recover some of the costs. The court will usually order the losing party to bear the legal costs incurred in the proceedings – that is, the various costs that do not include the lawyers' fees (eg, court costs, translation costs, experts' fees). While the court may order the losing party to pay some of the lawyers' fees as recoverable, this may not cover the full amount. The court has discretion:

• to take into account the financial condition of the parties; and
• to set the amount that is paid by the losing party, which may not be the full amount of the lawyers' fees.

13.2 Are contingency fees and similar arrangements permitted in your jurisdiction?

‘No win, no fee' agreements with lawyers are not permitted in France. The lawyer can agree on a contingency or success fee combined with another method of remuneration (eg, hourly rates or task-based fees). This allows for fees composed of an amount paid regardless of the outcome and then an additional fee if the action is successful.

13.3 Is third-party funding permitted in your jurisdiction?

Third-party funding is permitted under French law. There are no specific regulatory or legal provisions on third-party funding in France, so any agreement is governed by the law of contract. The use of third-party funding has been explicitly endorsed by the Paris Bar Council, which has given guidance to lawyers engaging in third-party funding litigation, since rules of professional conduct on the lawyer-client relationship apply to the third-party funding relationship.

In the past, third-party funding of litigation was extremely rare; but in the last 10 years, it has become more popular, particularly in arbitration cases, consumer and competition damages claims.

14 Trends and predictions

14.1 How would you describe the current competition litigation landscape and prevailing trends in your jurisdiction? Are any new developments anticipated in the next 12 months, including any proposed legislative reforms?

More actions for damages are being brought based on infringement decisions published by the Competition Authority and by the European Commission. This is because of the implementation of the EU Damages Directive, which provides that these decisions provide irrefutable evidence of infringement. As a result, there are more and more cases based on competition authority decisions (so-called ‘follow-on damages actions').

Although there has been an uptake in class actions since the introduction of this instrument, this still is a nascent – albeit developing – area of law.

No significant legislative developments are expected in the next 12 months. The most important development in the next year is likely to be increased enforcement in the digital economy sector, as the Competition Authority actively continues its investigations into Google, Facebook and Apple. The adoption at the EU level of the Digital Markets Act in July 2022 will also have an impact on digital competition enforcement in this area.

The other trend in enforcement highlighted by the Competition Authority in its annual report is a greater emphasis on sustainability and ecology in competition enforcement.

15 Tips and traps

15.1 What would be your recommendations to parties facing competition litigation in your jurisdiction and what potential pitfalls would you highlight?

It is very difficult for a private party to gather evidence to prove anti-competitive conduct since there is no right to pre-trial disclosure under French law to gather this evidence. Consequently, private claimants are at a disadvantage in trying to prove the existence of fault in an antitrust damages case. For this reason, most of the competition litigation in France is based on follow-on damages cases, following an infringement decision by the Competition Authority.

Prior to any litigation, the claimant should explore whether the Competition Authority is investigating the alleged anti-competitive conduct by the defendant or whether it has done so in the recent past. If not, the claimant should consider whether to make a complaint to the Competition Authority. If the complaint is successful and leads to an infringement decision by the authority, this constitutes irrebuttable evidence of infringement of competition law and makes it far easier to succeed in a competition claim for damages.

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.