2006 - Autorité de la concurrence

Transcription

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Annual Report
RA Conseil de la Concuren#A5073
6
Overview
200
Rapport
Competition at the service
of the
consumer
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An
of
institution at the service
the economy
4
Interview with Bruno Lasserre,
President of the Conseil de la concurrence
Prevention
A dynamic organisation
A European dimension
Enforcing
competition
rules
16
Commitment procedure
The annual report for 2006 can be viewed at www.conseil-concurrence.fr and ordered
from the Documentation française: 29, quai Voltaire 75 344 Paris cedex 07
Tel: +33 (0)1 40 15 70 00 – Fax: +33 (0)1 40 15 68 01 • www.ladocumentationfrancaise.fr
Regulation
Interim measures
Providing
vision
an expert’s
26
Advisory activity
Opinions in 2006
service to consumers
at the best price
34
Sanctions
Leniency procedure
Decisions in 2006
1 Annual Report overview 2006
This document is in no way binding on the Conseil de la concurrence
and is solely intended to provide the public with general information
on its activities.
Sanctions
Guaranteeing choice and
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in figures
Review
Activity
Pending cases
Number of pending
cases
at 31/12/2005
77decisions (on the merits + interim measures + discontinuances/
withdrawals) and
30 opinions were rendered.
Cases on the merits
Activity in figures
Interim
measures
3
76
161
Interim measures
5
15
14
6
Adherence to Injunctions
2
0
0
2
14
28
31
11
198
103
121
180
Number of companies
or entities sanctioned
71
Amount of penalties (€ m)
189,1
119
(1)
51,2
111
64,8
(1)
of which € 174.4 million in the mortgage banking & finance sector
(2)
of which € 534 million in the mobile phone sector
Over the long term, the indicator of
the number of cases pending has
been moving downwards as shown
in the histogram below.
61
88,5
137
137
50,2 754,4
178
(2)
2002 2003
Leniency
(1)
Commitments
(2)
198
2000
2001
2002
2003
2004 2005 2006
0
2
4
2
1
1
1
5
4
7
0
0
0
6
6
2003
2004
2005
Number of appeals
filed
27
19
23
28
15
Number of decisions
upheld
19
17
18
22
5
•Dismissals, withdrawal,
inadmissibility
18
16
14
16
5
•Partial review /
upheld on the merits
1(1)
1(2)
4(3)
6(4)
Review (partial or total)
6
1
3
3
-
2
1
2
2
1
Total appeals examined
27
19
23
27
6
0
0
0
1
9
70 %
89 %
78 %
81 %
-
Cases pending
% decisions upheld /
total appeals examined
Leniency opinion
Procedures initiated (publication of commitment proposals)
2006
Annulment (partial or total)
(4)
(2)
254
2002
(1)
(1)
296
2004
2005
180
2006
Appeals to the Paris The Conseil de la concurrence
its decisions to the parties
Court of Appeal notifies
concerned and to the Minister of
128,2
Success of alternative procedures
Negotiated settlement
335
2003 2004 2005 2006
The Conseil de la concurrence intervened in all sectors of the economy: building and civil engineering, distribution,
media, telecommunications, pharmaceutical industry, agriculture, etc.
In recent years, the amount of the penalties
imposed by the Conseil de la concurrence
has continued to increase, the years 2000
and 2005 being atypical in view of the
exceptional penalties imposed.
381
or the sixth consecutive year, the
number of cases pending has substantially fallen and is now very clearly
below the threshold of 200 cases that
the Conseil de la concurrence had
succeeded in coming under in 2005.
Sanctions
2000 2001 2002
417
F
Discontinuances/Withdrawals
34
Closed cases
60
Total
Decisions
on the merits
40
New cases
Number of pending
cases
at 31/12/2006
177
Opinions
Opinions
30
2006
decision 02-MC-04 - (2) decision 03-MC-02 - (3) decisions 04-D-07, 04-D-18, 04-D-39 and 04-MC-02 decisions 05-D-19, 05-D-26, 05-D-43, 05-D-58, 05-D-67 and 05-D-75 - (5) figures up to 30/05/07
(5)
Economy. They have one month
in which to file an application for
annulment or review with the Paris
Court of Appeal.
On the date of drafting of this
document, all of the decisions
with respect to appeals against
decisions rendered in 2006 are
not yet known, since some cases
are still pending before the Court
of Appeal.
However, a qualitative assessment
over the past 4 years shows that
the Conseil de la concurrence’s
decisions are, in their great majority, upheld by the Paris Court of
Appeal.
2 3 Annual Report overview 2006
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2006
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Interview with
Bruno Lasserre
The
consumer
Two landmark decisions
or opinions for consumers
in 2006
Sanctions against manufacturers
and distributors of perfumes
and cosmetics
as the first beneficiary of competition policy
By imposing a retail price on their distributors,
the manufacturers deprived consumers
of the possibility of benefiting from price
competition between the various points
of sale.
Defence of a brand name can in no event
serve to justify restrictions on the principle
of the free fixing of prices. This is why
the fines totalled almost € 45 million.
By its nature the market economy fosters competition
and ensures that consumers end up winning, in terms
of prices and the diversity of the products and
services offered.
Whenever competition does not work well on a market,
it is clearly consumers who end up footing the bill
sooner or later.
In your opinion, do French people
adhere to the notion of the market
economy?
Paradoxically, yes and no. As consumers, the French
value competition which they see as a mechanism
from which they can benefit. To get the best price
there must be competition between companies or
distributors. But these consumer reflexes do not
always carry over when they put on their citizen
hats. When what is involved is to debate economic
organisation, citizens’ trust in the market economy
remains fragile.
KNOWN FOR ITS POLICY OF SANCTIONS, THE CONSEIL DE
LA CONCURRENCE IS DETERMINED TO USE ALL OF THE MEANS
IN ITS ARSENAL TO ALLOW CONSUMERS TO BENEFIT FROM
THE MARKET ECONOMY.
THE REVIEW WITH BRUNO LASSERRE, PRESIDENT OF THE CONSEIL DE LA CONCURRENCE.
Ensuring the free play of competition:
is it that simple for consumers?
You’re right, it’s not always straightforward! Competition
requires consumers to spend more time seeking out
information, so as to be able to make pertinent
choices. But this culture is now rooted: today nobody
will hesitate to compare the competing offers of highspeed Internet operators before taking out a subscription
or those of airline companies before travelling.
Favourable opinion by
the Conseil concerning class
action by consumers
A class action makes consumers into
a veritable ally of the public authorities
in their fight against anticompetitive practices,
since it contributes to increasing
the dissuasion and efficiency of
their action.
It also enables striking a new power
balance between powerful companies
and consumers, who are isolated
by nature.
Some people reproach the Conseil
with placing the consumer over
the competitor. Does it?
Unlike sectorial regulators, our role is not to create
the competitive landscape but to ensure that competition is working. The importance, diversity and
number of suppliers are of course signs of healthy
competition. But a competition authority’s objective
is not to protect an inefficient competitor at any cost.
One of the virtues of competition is actually to spur
the efficiency of companies, inducing them to lower
their costs and pass on gains in productivity to the
consumer through more competitive prices, innovations or broader offers.
How is the action of the Conseil de la
concurrence beneficial to consumers?
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12
So it is completely independent vis-à-vis government
or companies. In fact, the Conseil has not shied away
from levying heavy sanctions against government
owned companies.
In time, can the Conseil become
a regulatory authority?
Protection of economic public
order, acting on a completely
independent basis
Do your European alter egos have similar
powers of sanction to yours?
All European competition authorities enjoy a power of sanction
quite similar to ours. The methods of calculation of penalties are
tending to move closer even if application on a case-by-case
basis sometimes shows differences.
In this respect, the Conseil is one of the most active authorities
in terms of the number of decisions handed down and the
amounts of the penalties imposed. Actually, all of the authorities
are in agreement as to the essential role of “advocacy”, meaning
the promotion of a competitive culture among public authorities,
companies and consumers.
“It’s an illusion
to believe we can be
efficient internationally
while remaining
protected on the
domestic market.”
Is the Government really obliged
to consult you?
When consultation is mandatory, not to consult us when
this is required by law would mean that the government
would be running the risk of having its decree reversed
by the Conseil d’Etat.
When consultation is optional, the Conseil’s role is basically preventive.
When implementation of a reform entails risks for competition, it is in a government’s interest to anticipate the
pro or anticompetitive effects of the contemplated
reform before making a decision.
The term regulatory authority only applies to part
of our activities since contrary to sectorial regulatory
authorities, we give priority to sanctions. Additionally,
we focus exclusively on the competitive operation
of markets. We are not involved in granting licenses
or approving prices for example.
Doesn’t your action risk weakening
national companies?
Absolutely not! To be able to succeed, companies
need a competitive environment at home. It’s an
illusion to believe we can be efficient internationally
while remaining protected on the domestic market.
The fact of being spurred on in their own home field
incites companies to innovate, develop their R & D,
come up with new product ranges, all of these
being initiatives that help them in their international
strategy.
COMPETITION ADVOCATE
AND EDUCATOR
Developing pedagogical education
on competition consists in concretely
explaining to companies
and consumers the benefits they can
derive from a more competitive
operation of the market. It is also part
of the Conseil’s role to continually
serve as the advocate for competition,
to pass the message that more
competition is the guarantee
of a more efficient economy
at the service of all.
3
11
13
6
1
10
9
The Conseil is an independent institution. It acts
in the name of the State but is not under the
government’s authority. Its decisions are only subject
to review by the Paris Court of Appeal.
Bruno Lasserre
Interview with
Is the Conseil sufficiently
independent from Government?
The Conseil in 2006
The Conseil de la concurrence has seventeen members. They
are appointed by decree, upon the proposal of the Minister
of Economy, for a term of office of six years. They may not
be removed from office other than in the cases strictly defined
in Articles L. 461-1 and L. 461-2 of the Code of commercial
law (Code de commerce).
A collegial institution, the Conseil can sit in plenary session,
as a section or as a standing committee. To validly deliberate,
the plenary session must comprise at least eight members
and the other panels three.
17 members appointed for 6 years
• Bruno LASSERRE, Judge at the Conseil d’Etat (Administrative
Supreme Court), President (1)
• Philippe NASSE, Honorary senior experienced magistrate
at the Cour des comptes (Court of Accounts), Vice-President (2)
• Françoise AUBERT, Honorary member of the Cour
de cassation (Civil Supreme Court), Vice-President (3)
• Anne PERROT, Professor of economics science at Paris I
University, Vice-President (4)
• Marie-Madeleine RENARD-PAYEN,
Judge at the Cour de cassation (5)
• Bernard PIOT, Honorary Vice-President of the Paris Tribunal
de commerce (Commercial Court) (6)
• Edmond HONORAT, Judge at the Conseil d’Etat (7)
• Pierrette PINOT, Judge at the Cour de cassation (8)
• Martine BEHAR-TOUCHAIS, Professor of law at Paris V
University (9)
• Reine-Claude MADER-SAUSSAYE, President of the
Confédération de la consommation, du logement et du cadre
de vie (Consumer Confederation for Housing and Living
Environments) (10)
• Emmanuel COMBE, Professor of management at Paris I
University, professor affiliated to ESCP-EAP (11)
• Jean-Pierre BIDAUD, Honorary President of the Chambre
de métiers (Chamber of Trades) of Haute-Vienne (12)
• Bruno FLICHY, former CEO of Crédit du Nord (13)
• Jacques RIPOTOT, President of Francap distribution (14)
• Christian CHARRIERE-BOURNAZEL, Attorney (15)
• Carol XUEREF, Director of Legal Affairs and
Development at Essilor International SA (16)
15
14
7
4
2
8
5
16
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Dissuasion, negotiation, promoting
responsibility, a very handy toolbox
How do you feel about the policeman image that the Conseil
de la concurrence has with companies?
It’s true; our work typically consists in imposing penalties. You can’t have an efficient competition
policy without a credible dissuasive role that is fully assumed by the competition authority.
Before engaging in anticompetitive behaviour, companies measure the economic benefit they
can derive from that strategy. That’s why they need to factor in the risk of a high fine in their
economic calculations. However, alongside sanctions the Conseil de la concurrence has been
developing alternative or complementary instruments, relying on cooperation or negotiations
with companies: negotiated settlements, commitments and leniency. These instruments allow us
to move faster, to be more efficient and to involve companies in ways of restoring competition.
In 2006, the Conseil de la concurrence published its
leniency program. Isn’t this program “ethically” shocking?
Unlike other European authorities who created themselves their leniency program,
in France this decision was made by Parliament and was the subject of a democratic
debate in Parliament. By making this decision, the lawmaker reasoned in purely economic terms. It should be understood that a cartel destroys value, for the economy,
for competitors and for consumers. If, to identify and dismantle a cartel, it is necessary
to leave the companies blowing the whistle on the cartel get off scot-free, the price
is largely worth it since the increased competitiveness of the market represents
a significant compensation.
Salient events
in 2006
Decisions in business
time
With a number of cases pending
that has been brought down
to 180, the Conseil has set itself
the priority objective of deciding
swiftly within lead times
compatible with business time.
• Permanently stabilize the number
of cases pending at around
165 a year, while contributing
to rejuvenating and speeding
up the handling of cases.
• Broadening the scope
of intervention of the Conseil
de la concurrence, including
in new economic sectors.
• Stepping up the fight against
cartels by relying on the success
of the leniency program.
• Using the Conseil’s new internal
organisation and in particular
its transversal services to ensure
greater efficiency.
“The Conseil has not hesitated to levy high
penalties, specifically in the mobile phone,
perfume and building and civil engineering
sectors, which clearly reflect its well
thought-out dissuasion policy.”
Increasingly varied sectors
The success of negotiated procedures
The Conseil de la concurrence confirmed
its very general mission of intervening
in all sectors of the economy. In 2006,
new sectors were prominent in
the Conseil’s activity: publishing and print
media, retail and wholesale distribution,
as well as the energy sector.
The leniency program has been very well received and allows us to fight
more efficiently against cartels. The commitment procedure has also met
with the interest of companies, specifically in the following three fields:
- reconciling intellectual property law and competition law
- market access, specifically in certain sectors undergoing
liberalization
- reconciling online sales with the organisation
of a selective distribution system
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4 priorities in 2007
Interview with
Bruno Lasserre
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BY ENSURING THE FREE PLAY OF MARKET FORCES, THE CONSEIL
DE LA CONCURRENCE ENDEAVOURS TO DEFEND CONSUMERS AGAINST
ANTICOMPETITIVE PRACTICES. IN THAT AIM, THE SEVENTEEN MEMBERS
OF THE COLLEGIAL BOARD, GUARDIANS OF COMPETITION, STRIVE
TO DISCIPLINE THE MARKET AT ALL COSTS!
for the Conseil de la concurrence
■ Date of birth: 1986
■ Status
Independent administrative authority acting
in the name of the State.
orga nisation
Legal Service
■ Speciality
Ensuring the proper operation of markets
and cracking down on anticompetitive practices
(cartels and abuses of dominant positions).
■ Scope of competence
Intervention in all economic sectors (building
and civil engineering, distribution, energy,
telecommunications, etc.).
■ Composition of the Conseil
17 members appointed every 6 years
by decree:
• eight members or former members
of the administrative or ordinary legal system
(Conseil d’Etat (Administrative Supreme
Court), Cour de cassation (Supreme Court),
Cour des comptes (Court of Accounts),
commercial courts);
Created over 20 years ago to accompany the price
liberalization process, the Conseil de la concurrence
acts as safeguard by ensuring the proper operation
of markets and cracking down on anticompetitive
practices by companies in all sectors of the economy,
thereby preserving consumers’ interests.
Since 2007, three new services have been added to
the Conseil de la concurrence’s regulatory arsenal.
• four personalities chosen for their expertise
in the field of the economy, competition
or consumer affairs;
• five specialists from the world of business:
production, distribution, crafts, services
and professionals.
The President and the three Vice-Presidents fulfil
their duties on a permanent basis.
■ Powers
Order emergency measures, issue injunctions,
levy fines, negotiate commitments and grant
leniency to certain repentant companies.
Issue opinions on various competition issues
and on certain merger transactions.
■ Special attributes
Its independence, collegial organisation,
strict separation of its investigation services
and decision-making body.
Staff of the
President
Helps the President act as a
spokesperson with the French
government, European and
international institutions and
other competition authorities,
on any topic other than those
related to ongoing cases. In
a general way, staff work on defining the Conseil’s
institutional positions and lead negotiations on its behalf
with the European competition network.
Thanks to this service the Conseil can fully play its role within the European network.
A veritable watchdog, it verifies the coherence of the reasoning and its compliance
with case-law so as to guarantee better legal security for the decisions taken by the
Conseil. It identifies, cross checks, and harmonizes, ensuring a regulatory watch of EC and
national case-law and of the practices of its European counterparts. It also prepares the
observations the Conseil submits to the Court of Appeal in litigation cases.
Economic service
Half-guide, half-strategist, this service provides its expertise to the investigation services
by advising them on the strategy to be followed and on the solidity of the economic rationale
and responses. It produces studies and feeds the Conseil’s ex officio referral policy by
identifying structural deficiencies in the market. It is in constant contact with the academic
world and the chief economists of other competition authorities.
Investigation, a user manual
Whenever a referral is made
to the Conseil, an investigation
is carried out on an entirely
independent basis by the case
officers (judges, economists,
lawyers, engineers, etc.) under
the aegis of the General
Rapporteur.
At all stages of the procedure,
these case officers can rely on
the expertise of the legal service
and of the economic service.
The procedural service manages, for
its part, the elements of the case files
which are now completely digitized.
At the end of in-depth inter partes
proceedings with the parties concerned,
cases are examined at a collegial
board session of the Conseil, which then
deliberates in camera. It will either
decide to impose a penalty, issue an
injunction ordering certain practices
to be changed, reject the referral
due to lack of evidence or else issue
a non-suit.
Identity sheet
A dynamic
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Referral to the Conseil: who can do this and in what cases?
• In the field of litigation (complaint),
a referral may be made to the
Conseil by the Minister of Economy,
local and regional administrations,
companies, a professional federation, a trade union organisation or
a consumer organisation. The Conseil
may also decide ex officio to open
a case should it deem this necessary.
• On an advisory basis (for an opinion),
its consultation by Government is mandatory for draft legislation regulating
prices or restricting competition. More
generally, a referral may be made to it
by Government or by Parliament, local
and regional administration, professional
federations and trade union or consumer organisations on any competitionrelated issue. In the field of mergers, the
Minister of Economy may consult
it for its opinion and such consultation is mandatory if the minister
considers that the merger restricts competition.
• Private individuals may not make
referrals to the Conseil.
Organisation of the Conseil de la concurrence
Vice-Presidents
(1)
Philippe Nasse
Françoise Aubert
Anne Perrot
INTERVIEW
2 questions
to Philippe Choné,
Chief economist
of the Conseil de la concurrence
What is the point of the Conseil having
an economic service?
Ph. Choné : Its creation is part of a general trend by
European competition authorities to increase their economic
expertise. Cases are increasingly complex and the overseers (courts) are imposing stricter standards.
(2)
F
On their side, companies are following this trend by often
submitting economic studies in litigation cases. One
of the roles of this service is notably to facilitate dialogue
with the parties’ economists and thus improve the quality
of the debate in inter partes proceedings.
Chief economist
Ph. Choné : Economic analysis has effectively become
a “must” in examining anticompetitive behaviour. Take the
example of abuses of a dominant position. The analysis
by the competition authorities is increasingly carried out
on a case-by-case basis and focused more on the effects.
What is involved is not only to assess the compliance
of the practices with the rules of law but also to assess
their impact on the wellbeing of consumers. What are
their effects (in the short, medium and long term) on incitements on companies to compete, invest and innovate?
The same trend can be observed in the field of cartels:
the increasing dearth of tangible proof requires reliance –
at least in part – on intellectual proof in establishing
practices. In all these fields, the thinking is evolving and
now relies more on economic theory.
Is competition law evolving?
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A
Europe
an
dimension
FREED FROM THE CONSTRAINTS OF BORDERS, CARTELS ARE NOW
OFTEN TRANSNATIONAL. SINCE 2004, THE COMPETITION AUTHORITIES
OF EACH EU MEMBER STATE, ORGANIZED IN A NETWORK, HAVE BEEN
WORKING TOGETHER AND ASSISTING ONE ANOTHER IN IDENTIFYING
ABUSIVE PRACTICES AND TRACKING DOWN CARTELS.
BETWEEN ONE COUNTRY AND ANOTHER…
Coordination
Strength of the network
Since 1 May 2004, the Conseil de la concurrence has been working in a network
with its European counterparts (European Competition Network, ECN). Since
then, all of the European competition authorities have been required to apply
Community rules to competition practices whenever they are likely to affect
trade between Member States. Coordination soon appeared to be indispensable
to ensure the proper operation of this decentralized system. At the start
of a procedure authorities must mutually inform each other of the cases they
have pending. Before a decision is taken there is dialogue with the Commission
so as to ensure the overall coherence of the system.
France,
1st contributor
to the network
Number of cases going through
the ECN (between May 2004
and March 2007)
•111 for France
• 74 for Germany
• 51 for the Netherlands
• 44 for Hungary
• 40 for the United Kingdom
source: European Commission
INTERVIEW
Questions
to Anne Krenzer,
ECN network coordinator
for France
What triggers a case being brought
before the network?
Mutual assistance
The cooperative advantage
The network is not only about coordination, it’s also
an important tool of cooperation between the network authorities. This cooperation may take the form
of assistance in the context of an investigation or
else consist in exchanges of information. An authority
of a Member State can thus investigate on behalf
of another authority, exchange information, including
confidential information and use it as evidence in
the proceedings. In 2005, for example, the Conseil
de la concurrence requested the assistance of the
British competition authority (OFT) in carrying out
an investigation in the United Kingdom. In 2006,
it requested the assistance of the Italian competition
authority (Autorita Garante della Concorrenza e del
Mercato) to obtain information that could be useful
to it in the context of litigation.
The fact that a company has committed an offence
that is liable to affect trade between Member States.
In this type of case, the Conseil de la concurrence
directly applies EC law. For the most part these cases
concern export or multinational companies but a
review of case-law shows that offences committed in
one country increasingly have an impact on trade between Member States
In your view, is the network a success?
Yes, indisputably. Coordination between the European
Commission and each of the competition authorities
provides the coherence that is indispensable in decisionmaking practices in Europe. The permanent contact
between authorities also allows us to share very enriching experiences and more particularly to organize
efficient and practical cooperation in the field, which is
really new.
For example, the Conseil de la concurrence participated,
alongside the OFT, in carrying out a search in the UK
of a company suspected of having perpetrated offences
having had an effect on the French market.
Making the most of experience
Dynamic of working groups
The network members meet regularly for discussions
and exchanges on horizontal or sectorial issues.
In the context of the plenary quarterly meetings,
working groups assess the activity carried out and
adopt, as the case may be, common guidelines.
There are sixteen sectorial sub-groups as well as
working groups on horizontal issues, dealing with
specific legal or economic issues: procedure,
leniency, sanctions. For example, in 2005, due to
the increasing importance of the economic dimension in the handling of anticompetitive practices, a
group was formed around that topic. Its objective is
to develop technical expertise and a common
approach in the working methods of economists
working at the competition authorities.
Mutual information
Expertise of the consultative
committees
Representatives of national competition authorities
and of the European Commission sit on these committees. The national experts examine certain cases
or issues in connection with EC competition law and
give their opinions on the draft decisions of the
Commission. In 2006, the Commission adopted twenty
decisions, basically sanctioning cartels of a European
or international dimension, decisions of which the
Conseil was informed and in respect of which it
formulated observations.
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preventi on
OVERCOMING
OBSTACLES
BY FOLLOWING
REAL BUSINESS
TIME
Upstream of sanctions,
the Conseil has instruments
at its disposal to rapidly resolve
certain market dysfunctions:
the commitment procedure
and interim measures
in urgent situations.
These two regulatory tools
contribute to freeing up
competition while respecting
economic time.
Enforcing competition
a more
rules in view of
efficient econ omy
18•21 Commitment procedure
22•25 Interim measures
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Commitm ents
Changing practices consensually
In consideration for the commitments made by the company, the Conseil de la concurrence may decide to close the case without ruling on the existence of infringement to
competition rules. Introduced by the ordinance of 4th November 2004, this procedure
allows directly channelling the behaviour of market players while quickly restoring a
satisfactory competitive situation.
Time won all round
The prerequisite: the company must make substantial, credible and verifiable commitments addressing
the Conseil’s competition concerns. If it does, the
latter may accept the commitments which then
become binding. With this negotiated legal procedure the problem can be quickly solved, saving
time and resources both for the Conseil de la
concurrence and for the company concerned.
Commitments for certain
practices only
The commitment procedure is appropriate to
resolve dysfunctions arising out of the unilateral
behaviour of a company or of certain vertical
restrictions. It is not applied to horizontal agreements (cartels), for which sanctions remain the
only response.
From the complaint to the commitment,
a signposted process
• A referral is first made to the Conseil against
a company or else it acts ex officio.
• A case officer is appointed to investigate
the case: he carries out a preliminary
assessment of the situation, which he notifies
to the company.
• Before notifying any statement of objections,
the company may request the benefit
of the commitment procedure and propose
changes to its behaviour.
• These proposed commitments are submitted
to a market test, consisting in their being
posted online for a month on the Conseil’s
website, so as to obtain the observations
of interested third parties.
• The commitments are then discussed
and negotiated in a collegial board session,
and the board may request possible
modifications.
5 questions to Anne Perrot
Vice-President of the Conseil de la concurrence
What lessons should be drawn from
the first two years of application?
The commitment procedure basically concerns what
are known as “unilateral” practices. When a contract
is liable to foreclose the market or restrict competition,
the commitment path is particularly suited since
the corrective measure – i.e. the amendment of the
contract – is targeted and its application is easy to
verify.
When the practices are recent or still ongoing, companies are quite ready to use this procedure. In assessing the commitments, the Conseil refers to three criteria: their credibility, their verifiable nature and their
ability to resolve the competition problems.
This is the type of procedure the Conseil recently chose
to successfully implement to facilitate online sales in a
certain number of sectors, such as the parapharmaceutical, jewellery or top end Hi-Fi sector.
How do you explain its success?
It should be said that this very pragmatic approach
generates significant time savings, by cutting down
on the time spent investigating and monitoring cases,
and thus on costs. If successful, the case is closed
even if in theory, an appeal is possible.
This procedure also offers an alternative to the purely
repressive logic of sanctions: it is the company itself
that proposes and defines the scope of its commitments. This is in the interest of the company since it is
the company that has the clearest picture of its market and also in the interest of the Conseil since it
obtains the company’s adherence so to speak.
Can the Conseil refuse the commitments
proposed by the company?
Yes, that has happened twice, with TDF and with
France Télécom. In both cases, an application had been
made to the Conseil for interim measures by competing companies. It preferred to grant those measures
rather than close the case based on commitments
which were too vague or inadequate to satisfy its competition concerns.
Can a commitment procedure be
applied in the case of a horizontal
agreement?
That’s out of the question! A commitment not to form
a cartel or to comply with the law is not an acceptable
“commitment” from our standpoint: it’s simply an obligation.
What happens when a company does
not comply with the commitments
made by it?
These cases are covered by the legislation. A company
not complying with its commitments faces fines.
CURBING ANTICOMPETITIVE PRACTICES ALSO GOES THROUGH
THE ADHERENCE OF MARKET PLAYERS. THE COMMITMENT PROCEDURE
ALLOWS COMPANIES TO “CORRECT THEIR COURSE” BY MODIFYING
THEIR BEHAVIOUR BEFORE ENTERING INTO A LITIGATION PHASE
AND TO PROPOSE A SOLUTION RATHER THAN RUN THE RISK
OF A POSSIBLE SANCTION.
INTERVIEW
prevention
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prevention
The democratisation of online sales
Festina in the Internet era
Three companies (Bose, Focal JM and Triangle) committed to modifying their selective distribution agreement so as to allow their authorized distributors to sell
their products over the Internet. Focal and Triangle
completely prohibited online sales while Bose imposed
restrictive terms on its distributors.
Following a complaint by Bijourama, Festina France amended its distribution
agreement by including clauses concerning online sales by the members
of its network. But the company maintained its refusal to authorize the marketing
of its products by companies selling exclusively over the Internet.
The inclusion of such clauses should enable all of the members of Festina’s
selective distribution network to know what are the acceptance criteria
and the precise terms and conditions under which online sales can take
place.
Home cinema
a click away
Commitments
at the end of the line
After inquiry
Upon a referral by 188 218 companies, the Conseil
accepted the commitments made by Pages
Jaunes (Yellow Pages), proposing the extension until
July 2006 of access to its database to new market
entrants and then to share information with them
concerning the trade names requested by certain
professionals until March 2007. This measure aimed
at avoiding a sharp drop in the quality of the information available from telephone directory services.
For its part, France Télécom committed to extending
the scope of the information it supplies to publishers
of telephone directories to all of the information
it has itself.
◗ Decision 06-D-20 of 13 July 2006
On the media side
Commitment procedures in
2006
Radio messages
Versant Outre-Mer
In the context of a complaint by Export
Presse against NMPP concerning
sales per copy of national newspapers
in DOM-TOMs (French overseas
departments and territories), the Conseil
accepted the proposals by NMPP,
which committed to introducing rates
allowing independent exporters to distribute newspapers in New Caledonia
and in French Polynesia on economically
viable terms.
◗ Decision 06-D-01 of 7 February
2006
Following a complaint filed by Canal 9,
who wanted to integrate its local
radio station Chante France within
the economic interest group Les
Indépendants, a group marketing
advertising space, the economic
interest group committed to modifying its internal rules and all of its documents so as to
specify the conditions of eligibility and membership,
facilitate the understanding of the admission and
exclusion procedures and get rid of the penalties
upon departure
◗ Decision 06-D-29 of 6 October 2006
Free press under the spotlight
Following a referral by the Minister of Economy,
Audipresse committed to no longer raising any obstacles
to the inclusion of free magazines in its audience survey
and to reviewing its rules on the non-interruption
(periodicity requirement) between two issues.
◗ Decision 06-D-40 of 20 December 2006
For more information go to:
www.conseil-concurrence.fr
Despite Bijourama’s dissatisfaction, the Conseil considered that the commitments met its competition concerns: a network organizer is free to reserve
online sales to the members of its network who have a store, provided the
criteria applied are transparent and non-discriminatory and do not lead to unwarranted restrictions on the use of this method of advertising and sale.
◗ Decision 06-D-24 of 24 July 2006
Satisfied with the commitments made by the three
companies, the Conseil, upon the referral of the
Minister of Economy, closed the case but nonetheless
requested Focal JM to modify its proposals which still
excluded two product lines from online sales. The
online sale of these products is now possible provided
the customer has previously benefited from advice
given by a professional in a store.
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Interim me asures
Lifting the obstacle bef ore it’s too late
When a referral had been made to the Conseil concerning behaviour that could be anticompetitive
and it considers that a risk of serious and immediate impact on a market exists, it can pronounce interim measures, which are emergency measures taken on a provisional basis while waiting for a decision to be taken on the merits.
Acting faster and more upstream
In this aim, it is necessary for the practice concerned to risk causing serious and immediate harm
to the referring companies, in the sector concerned or to consumers. Interim measures may take
on different forms so as to adapt to the case at
hand. They may order certain behaviour to
cease or conversely require the company to act
in a given way to restore competition (for example by removing a contractual clause, modifying
its by-laws, etc.).
In 2006, of the fifteen referrals made, three interim measures were ultimately granted (NMPP, nursery
schools, maritime transport). In three other cases, the companies proposed commitments that allowed
to rapidly come up with the sought after result.
In step with “business time”
Useful on several counts, interim measures allow:
• efficient, pertinent and fast action. By typically handing down decisions within three
months of referral, the Conseil de la concurrence intervenes in a timely manner.
The lime limit in which to file an appeal with the Court of Appeal is of 10 days
(compared to 1 month for a decision on the merits).
• immediate and effective lifting of the risks of a situation that is anticompetitive before
its effects become irreversible.
4 questions to Philippe Nasse
The Conseil de la concurrence is one
of the only competition authorities
in Europe that can order emergency
measures. Why is that?
The lawmakers wanted it that way since this is a
very effective means of action with companies and
markets. Processing litigation is a time-consuming
process. Searching for proof as well as going
through proceedings respecting the principle of
adversarial proceedings and the rights of the
defence is a complex matter: a competition investigation takes about a year while the proceedings take
another year. Yet, business time is much faster than
legal time. Interim measures are a way of reconciling the two in urgent cases.
Why does the Conseil issue so few of
them?
Well, that depends firstly on the referring parties:
in 2006, for instance, fifteen referrals were made
to us!
This being said, companies know that interim measures are exceptional and on their side they operate
a certain selection. Also, we do not always grant
these types of applications since by law these measures should only be used as strictly required to
face the urgent situation.
Don’t companies sometimes try
and instrumentalize them?
That can happen, but it’s up to the Conseil to show
proof of discernment and good judgment.
While any company has the right to refer to us, only
the Conseil decides on whether interim measures
should be ordered and what they should consist in.
If there is no serious and immediate threat of impact
on the market for instance, we will deny the application.
It’s important to understand that the role of the Conseil
is not to defend a competitor company against others
but to have fair rules prevail on the market.
Can interim measures contribute
to structuring the market?
That’s effectively what happened on the telecom market.
When high-speed Internet kicked off, France Télécom
enjoyed a technical advantage due to the infrastructures it has as the incumbent operator. Upon the
referral of competitors wishing to develop their own
offers, the Conseil ordered several interim measures,
considering that the solutions and wholesale rates
proposed by France Télécom did not leave its competitors sufficient economic space in which to grow.
These various measures contributed to fully opening
the market and facilitating the emergence of many
other operators.
WHEN A MARKET IS SERIOUSLY THREATENED,
AN INTERIM MEASURE CONSTITUTES AN IMMEDIATE
REMEDY BEFORE ADDRESSING THE MERITS.
IN AN URGENT SITUTION FASTER INTERVENTION ALLOWS
RESTORING THE RULES OF EFFECTIVE COMPETITION
SO AS TO AVOID IRREMEDIABLE HARM.
INTERVIEW
prevention
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prevention
SNCM: 48 hours to change its offer
The eviction effect
of the
RESTORING COMPETITION RULES
IN AN EMERGENCY BEFORE
THE SITUATION BECOMES
IRREVERSIBLE
The Conseil de la concurrence
ordered interim measures against
the SNCM. Two competitors,
(Compagnie Méridionale de
Navigation and Corsica Ferries)
had made a referral to the Conseil
de la concurrence concerning
the call for tenders issued by the
Corsica transportation office for
the renewal of the public service
delegation to serve Corsica from
Marseille by water transport.
NMPP,
Agreement suspended…
Upon the referral of Messageries Lyonnaises de Presse and Agora
Diffusion, the Conseil requested, as an interim measure, to suspend
application of a new interprofessional agreement liable to have
anticompetitive effects.
To guarantee the conditions of
an effective competitive bidding
process in a timely manner, the
Conseil ordered emergency measures. It ordered the SNCM to indicate, within 48 hours, the amount
of the subsidies to which it committed per line and to respond within the same time
periods to the Corsica transportation office so as
to enable a comparison of the candidates
without opposing the grant of a partial service
delegation.
◗ Decision 06-MC-03 of 11 December 2006
2006
Nursery schools, pick and choose…
Referred to by the municipality of Bouc Bel Air, the Conseil ordered the association
Bouc’Choux, manager of the nursery schools in the municipalities, to suspend
application of an amendment to the work contract of 33 of its employees, in the
context of a public call for tenders in which several other companies sought to
take over the management of nursery schools in the municipality. The amendment
had stipulated that each employee would receive a lump sum of € 100,000 as
soon as the employer’s payroll exceeded 60 persons.
A
An amendment concerning a new system of remuneration for distributors in fact relied on several
loyalty-based criteria, of a nature to evict MLP, the only competing press distribution service. Incited
by additional remuneration, the distributors risked being tempted to promote certain titles from
NMPP and from SAEM-TP to the detriment of other titles. The Conseil also stressed that it was possible
to otherwise assess the remuneration of distributors on the basis of more equitable and nondiscriminatory conditions.
◗ Decision 06-MC-01 of 23 February 2006
SNCM’s offer
The SNCM refused to commit to the
amount of the subsidy claimed for
each line, thus preventing the local
administration from comparing the
results in view of a possible “mix”. This
situation risked forcing the local administration to choose the SNCM, since
the other competitors were unable to submit
offers covering all of the lines. This is why the
Conseil considered that the submission by the
SNCM of a global and indivisible offer could
have anticompetitive effects by evicting the
partial offers made by its competitors.
Interim measures in
Transparency
across the line
lock
too many
The Conseil considered that this amendment erected a barrier to market entrance, dissuading
Bouc’Choux’s competitors from seeking market entrance: by playing on the legal obligation for a new
employer to assume all of the work contracts of the former employer, this provision placed an additional
and discriminatory cost on any potential successor of Bouc’Choux.
By suspending application of that amendment, this interim measure allowed avoiding a distortion of
competition during the call for tender.
◗ Decision 06-MC-02 of 27 June 2006
IN THE RACE TO SERVE CORSICA,
THE SNCM WAS FORCED TO CHANGE
TRACK
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regulati on
THE OPINION
OF AN EXPERT
AT THE SERVICE
OF A FREE
ECONOMY
Examining a market under
a microscope, standing back
so as to examine draft legislation
before it is voted, anticipating
the effects of mergers: these
are the advisory roles enabling
the Conseil to build an economic
environment respectful of freedom
of competition.
The opinion of an
of a
expert at the service
sound and dynamic econ omy
28•29 Advisory activity
30•33 Opinions in 2006
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regulation
Advisory activity
better to prevent…
PREPARED BY GOVERNMENT CONCERNING
TRANSACTIONS CONTEMPLATED BY COMPANIES,
THE MOST IN KEEPING WITH COMPETITION.
Mandatorily consulted by Government on draft legislation regulating prices or restricting competition,
the Conseil can also be referred to on any general competition issue by various institutions, such as sectorial regulators, and by organisations such as professional federations or consumer associations.
When the Minister of Economy considers that a
merger transaction warrants, in view of the risks it
entails of interfering with competition, a more indepth review (phase 2), he consults the Conseil
de la concurrence, which has 3 months in which
to render its opinion.
Based on its expertise, the latter will then carry
out an in-depth assessment and evaluate the
Opinions
in 2006
In 2006, the Conseil issued
as follows:
possible restrictive effects of the merger. It will
notably look whether sufficient competition
remains on the market so as to act as a check on
the new entity formed and whether other operators can easily enter the market concerned. If it
identifies interference with competition, the Conseil
will propose detailed remedies, which can take
the form for example of the disposal of business
activities or entities.
30 opinions that can be broken down
2
2
Opinions at the request of a court
Opinion on draft regulations
creating a new regime
3
Opinions on merger
transactions
7
Leniency opinions
7
Opinions on general
competition issues
8
Opinions at the request
of independent
administrative authorities
1
Opinions on draft decrees
regulating prices
Give us your opinion…
Reine-Claude Mader-Saussaye,
member of the Conseil and President
of the Confédération de la consommation,
du logement et du cadre de vie (CLCV)
In what way are the Conseil’s
opinions essential to consumers?
When an association makes a referral to the
Conseil, the opinion rendered allows it to fine-tune
its analysis, to validate a point of view and assert it.
We are often in negotiations with the professional
world and are at times confronted with diverging
positions. The opinion of the Conseil is authoritative;
it allows finding solutions and speeding up decision
making, while avoiding subsequent litigation.
Has your association already sought
opinions from the Conseil?
Yes, several times. When local and regional authorities decided to make pay-and-display machines
payable with a special card issued by the city, we
went before the Conseil to argue that consumers
would lose their freedom to choose their method
of payment and would be forced to pay out € 20
or 30 for a single-purpose card. While taking into
account the problem with the pillaging of these
devices, the Conseil issued a balanced opinion,
asking in particular that it be possible to pay with
several types of cards, so as not to make consumers captive. This was taken into account by
the professionals who adopted precise measures,
so this opinion largely contributed to shedding light
on the debate by proposing concrete solutions,
while taking into consideration actual constraints.
Can the Conseil’s opinion have an
impact on a European level?
When we asked professionals in the banking world
to introduce a universal banking service for those
most in need, banks resisted by objecting that its
introduction would be contrary to the rules of competition. So we referred to the Conseil, which came
out in favour of a universal service but without entirely following our position as to the price. Groups
of European consumers to whom we passed on this
opinion were thus able to assert it in their own
countries.
Specific case of mergers
INTERVIEW
IN THE OPINIONS IT ADOPTS CONCERNING THE DRAFT LEGISLATION
MORE GENERAL COMPETITION ISSUES SUBMITTED TO IT OR MERGER
THE CONSEIL ENDEAVOURS TO COME UP WITH SOLUTIONS THAT ARE
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regulation
Class action by consumers
Exchange of data
between hotels in the Mulhouse region
Mass charge
Information in separate lodgings
Invited to present its observations on the report by the
working group set up by the ministries of the economy
and justice, the Conseil declared being favourable to
the development of class action suits by consumers.
It considered that they can contribute to better redress
for the harm sustained due to anticompetitive practices
as much as they allow striking a new power balance
between companies and consumers.
In its opinion, the Conseil notably stressed the following points:
• an exchange of personal and confidential data can only be contemplated
in a grouped manner that does not enable identification of the individual
performance levels of the companies.
AN INITIATIVE THAT HELPS
STRIKE A NEW POWER
BALANCE
Opinions in
The fair trade sector
Fair
& competitive
Upon the referral of the Minister of Economy who sought
an opinion concerning the methods of operation of the
“commerce équitable” (fair trade) sector in France and
in particular the compatibility of the minimum purchase
price schedules for producers with competition rules,
the Conseil considered that these provisions did not restrict
competition but stressed the need to regulate the certification and awarding of “fair trade” labels.
◗ Opinion 06-A-07 of 22 March 2006
FAIR TRADE, AGRIFOOD, HOTEL INDUSTRY…
THE CONSEIL’S SCOPE OF ACTION EXTENDS
TO ALL SECTORS OF THE MARKET ECONOMY
• sufficient time must elapse before publication of the exchange of information,
so as to prevent the possibility of real-time disclosure of the choices and results
of competitors.
• the intensity of competition existing on the market should be taken into account
in assessing the lawful nature of the information exchange system.
◗ Opinion 06-A-18 of 5 October 2006
2006
Fruit and vegetables
from
Brittany
Negotiations with sellers
The UEEFL (trade association of shippers and
exporters of fruit and vegetables in the Finistère)
requested an opinion from the Conseil on the
application of competition law in the sector of fruit
and vegetables and in particular on the commercial relations between its members and CERAFEL
(agricultural economic committee of Brittany)
formed by three producers from Brittany. The
Conseil reaffirmed that an exclusive sourcing obligation imposed on traders was anticompetitive
and invited CERAFEL to modify its contractual
arrangements along these lines. It recalled that,
pursuant to case-law, all suppliers remain free to
modify the organisation of their networks, provided they do this in a non-discriminatory manner
and do not restrict the ability to be supplied in
the relevant products. Concerning the conditions
of authorisation of traders on auction markets,
the Conseil specified that arbitrary selection criteria set by producer organisations or criteria
applied in a discriminatory manner can be anticompetitive.
◗ Opinion 06-A-09 of 14 April 2006
These actions also increase the effectiveness of competition policy by making consumers into a veritable
ally of the public authorities in their fight against anticompetitive practices. However, the Conseil has stressed
that this type of measure requires satisfactory coordination between public and private actions and must
preserve the efficiency of leniency programs.
◗ Opinion of 21 September 2006
Referred to by the Chambre de commerce et d’industrie (CCI or Chamber
of Commerce and of Industry) for southern Alsace, the Conseil de la concurrence issued its opinion on a project involving an occupancy indicator intended
for hotels in the Mulhouse region. The chamber’s project consisted in organizing
an exchange of personally identifiable data between hotels in the region on a
voluntary basis (occupancy levels, number of days of activity and rooms let).
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regulation
Purchase of TPS
by Canal Plus
59 commitments at
the end of the day
Upon the referral of the Minister of
Economy, the Conseil issued a noteworthy opinion on the purchase by
group Canal Plus of the TPS satellite
bouquet, the new entity “Canal +
France” combining both the TPS and
Canal Sat satellite bouquets, the channel
Canal + and multi-theme channels.
The merger of the two satellite bouquets affecting the main markets for
pay-TV both horizontally and vertically,
the Conseil recommended that the
transaction be subject to a high number
of commitments, which it detailed in its
opinion.
Salmon market
The
The transaction was authorized by the minister
on 15 September 2006, based on the vast
majority of the commitments formulated by
the Conseil.
solution
On the market for farmed Atlantic salmon,
the Conseil de la concurrence was consulted
on the purchase of Marine Harvest NV by Pan
Fish ASA. Although the transaction did not
create a dominant position, the Conseil identified
certain risks due to the modification of the competitive balance. The purchase of Marine
Harvest by Pan Fish effectively had an incremental effect on the market share for Scottish
and Irish salmon and entailed a risk of the
increase of the price of salmon coming from
Scotland. The Conseil considered that the sale
of the Scottish fish farms, proposed by Pan Fish,
was an appropriate remedy.
◗ Opinion 06-A-20 of 20 October 2006
These commitments are intended to enable:
• access by competitors to content (limits
on term of contracts, restrictions in respect
of purchasing and assignment of rights)
• access to the channels (making several
channels available on the market)
• maintaining an attractive offer for consumers (takeover of a minimum percentage
of independent channels, maintenance
of uniform pricing, possibility of terminating
the contract).
◗ Opinion 06-A-13 of 13 July 2006
Opinions in
Scottish
2006
Opinions given to Arcep on the transposition
Unravelling the package
In the context of the market analysis under the Code of
postal and electronic communications (Code des postes
et communications électroniques) in view of the implementation in French law of the “telecom package”, the
Conseil gave a series of opinions to the regulatory authority
(ARCEP).
• Audiovisual broadcasting – wholesale market:
considering TDF’s privileged situation in relation to
other broadcasters, the Conseil declared that it was
favourable to ARCEP’s proposal to submit TDF to a separate accounting requirement for its digital TV/TNT operations and for its other broadcasting operations.
◗ Opinion 06-A-01 of 18 January 2006
• SMS – wholesale market: on the market for SMS terminations, the Conseil was favourable to “ex ante”
intervention by ARCEP (the French Telecommunications Regulator), since only it can exercise competitive pressure on retail prices. It notably recommended that ARCEP ensure that mobile operators pass on
the drop in SMS termination prices in the wholesale SMS prices they charge MVNOs (virtual operators).
◗ Opinion 06-A-05 of 10 March 2006
• Leased lines, the Conseil issued its opinion on the wholesale and retail markets.
◗ Opinion 06-A-10 of 12 May 2006
• Call termination on mobile networks in the Antilles/French Guyana region – wholesale market:
the Conseil invited ARCEP to further explicit its analysis of the competitive situation on the wholesale and
retail market.
◗ Opinion 06-A-11 of 20 June 2006
• National broadband access (high-speed Internet): the Conseil declared being favourable to the elimination of the “ex ante” regulation of this market given the developments observed on wholesale
broadband markets and encouraged the imposition of a separate accounting requirement on France
Télécom.
◗ Opinion 06-A-21 of 17 November 2006
of the “telecom package”
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sanction s
ONE OF
THE KEYS TO
DISSUASION
Certain people criticize the
sometimes spectacular sanctions
levied against anticompetitive
practices. For the Conseil
de la concurrence, there can be
no excessive severity when it
comes to protecting consumers’
wellbeing. The arsenal
of dissuasive measures
now includes whistle-blowing
on companies that are members
of cartels, which is yet another
way of winning the battle
in favour of choice, the quality
of services and prices.
choice and service
to consumers at the best price
Guaranteeing
36•37 Sanctions
38•39 Leniency procedure
40•43 Decisions in 2006
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sanctions
Cartels, dangero us liaisons
WHENEVER A CARTEL BETWEEN SEVERAL COMPANIES
DISTORTS THE PLAY OF COMPETITION ON A MARKET,
IT IS CONSUMERS’ FREEDOM OF CHOICE THAT IS
HARMED. TO PUT AN END TO SUCH PRACTICES,
THE CONSEIL DE LA CONCURRENCE WILL NOT
HESITATE TO INFLICT HIGH PENALTIES ON COMPANIES.
Developing a culture of competition
The Conseil de la concurrence increasingly communicates with the
press. Its objective is to make its decisions known so as to promote
a culture of competition and explain the meaning of its actions to
companies and to consumers.
INTERVIEW
and abuse of market power
3 questions to Françoise Aubert,
Consumers are the first victims of practices such as cartels and abuses of dominant positions. When companies do not abide by the rules of the game, they
cause serious harm to the economy: artificially high prices, distortion of awards
of public procurement contracts, inaccessible or restricted market access
for competitors.
On its side, by joining in a cartel, the company is often making a gamble. First
concerning the amount of the penalty and then concerning the likelihood
of being discovered. To be efficient, dissuasion must rely on a credible policy
of sanctions and on heightened detection.
Overall trend: increased severity
The New Economic Regulations Act of 15 May
2001 considerably increased the cap on the
fines that can be imposed by the Conseil de
la concurrence. Henceforth, the fine may in
theory go up to 10% of the worldwide turnover of the company’s group (compared to
the previous 5% of the company’s national
turnover): this is an efficient way of neutralizing
avoidance tactics (subsidiary formation, transfers of activity, etc.).
In setting the amount of the fine, the Conseil
considers several criteria:
• The seriousness of the practices
• The extent of the harm to the economy
• The company’s situation
• The possible repetition of the reproached
practices
Public procurement is often concerned
by anticompetitive practices.
Is the Conseil harsh enough?
The efficiency of the Conseil’s fight against cartels
and abuses of dominant positions in large part depends
on the level of the sanctions it levies.
Unfortunately, it’s true that every year the Conseil
has to examine cases concerning the awarding of
public procurement contracts. From memory I would
cite the Pont de Normandie case, the “Route des
Estuaires” highway construction case and more
recently the public works of Île-de-France (Greater
Paris area) case or the case involving works at
secondary schools in Île-de-France. Companies should
be clear: the trend in higher penalties is unavoidable,
especially since we will progressively be applying the
new legal cap and since leniency is also starting to
play a non-negligible role…
The Conseil motivates its decision by relying on several
criteria. A cartel between large-scale companies
will be more severely sanctioned than occasional
anticompetitive agreement between a supplier and
its distribution network. The damage to the economy is assessed depending on the market affected,
the extent of the variations in price and quantities
ascribable to the practices as well as their duration.
Sanctions also factor in the size of the company, its
role in such practices and since recently, the repetition of the practices. Application of those criteria
allows companies to gauge the extent of the sanction
and to understand how to prevent new wrongdoing
in the future.
What is the role of publication
orders?
An order to publish a summary of the decision in the
press is part of the penalty since it forces the company
to inform its competitors and the public that it
engaged in unlawful conduct. Being ordered to do so
is something to be feared by companies concerned
about their image. It also serves to warn companies
in that sector and the public of the effects of such
practices.
Getting on at the expense of consumers
Why do sanctions play such a key
role in the Conseil de la concurrence’s
policy?
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Leniency, an efficient tool
of detection
SINCE BECOMING A POSSIBILITY IN FRANCE, LENIENCY HAS MET WITH
IS A MEMBER OF A CARTEL TO BLOW THE WHISTLE AND THUS AVOID
REAL SUCCESS. IT ALLOWS A COMPANY THAT
ANY SANCTIONS…
Immunity at the end of the day
Immunity is only obtained once the procedure has
been initiated and provided that: the prohibited
agreement was not known to the competition
authorities before the whistle was blown. A member
may leave the cartel at any time so as to benefit from
that immunity. The very strong instability thus created
within cartels thus allows significantly improving the
detection of anticompetitive agreements but also plays
a preventive role, by dissuading potential “cartelists”.
A common European framework
At the end of 2006, the European Competition
Network (ECN) adopted a model leniency program.
Its objective is to facilitate the handling of parallel
applications within the European Union and to
streamline the differences between national programs
in different countries so as to offer better legal security
to companies.
A company requesting leniency will thus receive
the same treatment on the part of any authority that
is a member of the ECN.
The Conseil de la concurrence was the first national
competition authority to adapt its leniency program
to the model program, on 17 April 2007.
Success at start up
Since its entry into force in 2002, this procedure has met with a veritable success. Close
to 30 leniency applications were made and more than 75% of them met with a favourable opinion from the Conseil de la concurrence. Companies members of American
groups, but increasingly also French companies, requested the benefit of this procedure,
often upon a change in management or shareholders, with the new decision-makers
refusing to cover up practices they disavow or that expose the company to a legal risk.
Leniency, the procedure to follow
What should a company do when it wants to blow the whistle on a cartel to which it is a party?
• The company should contact either the General Rapporteur of the Conseil de la concurrence or the Director of the Directorate-General
for Competition, Consumer Affairs and Fraud Control (DGCCRF).
• It should be the first to do so and should provide concrete evidence of the cartel. The authorities must not have had prior knowledge of that cartel.
• It must fully cooperate with the authorities at all stages of the procedure, terminate its involvement without disclosing its application
to the other members and not have taken steps to coerce the other members of the cartel.
• After reviewing the case, the Conseil will either grant or refuse the leniency application.
• Generally speaking, searches and seizures will be carried out to obtain additional evidence and, following litigation proceedings
of one to two years, the Conseil will pronounce sanctions against the cartel members, with the exception of the leniency applicant.
• If the applicant was not the first but provides additional evidence not already available to the Conseil, it may benefit, under certain
conditions, from “second rank” leniency and obtain partial immunity.
For mor e information, consult the press r elease and the full French leniency pr ogram at:
www.conseil-concur rence.fr
5 questions to Thierry Dahan
General Rapporteur of the Conseil de la concurrence
How did the idea of the leniency
procedure arise?
The system created in the United States back in the
seventies and eighties was not an immediate success,
since it lacked clear and credible rules. Introduced
by the European Commission in the mid-nineties and
tested elsewhere, the system was ready when the
New Economic Regulations Act was passed in 2001.
How do you explain the interest shown
by companies in this mechanism?
Leniency minimizes the risk of the participant “leaving” the cartel, since it will escape the fine, and
maximizes the risks for those who stay. A company
who stays runs the risk of being denounced while
losing the “zero fine” effect. It’s double or nothing.
If you are not the whistleblower yourself, then you
risk being denounced by your neighbour. The temptation to leave the cartel is thus very strong. But
since you need to be the first, companies need a
clear marker in the leniency application process.
Sometimes an hour or so will make all the difference.
Are French companies as active
in the field of leniency as companies
that belong to American groups?
No. Out of the thirty applications we have received,
most were from subsidiaries of large European or
American groups. Americans have a far stronger
settlement culture and are more ethically comfortable
with “whistle-blowing”. This being said, the culture is
fast changing in France and we now see that legal
advisers have fully grasped the interest of this type
of procedure for their clients. By granting immunity
to “whistle-blowing” companies, the Conseil is not
reasoning in terms of ethics or remorse but is fol-
lowing a purely economic rationale: but let’s not
overlook the fact that cartels are extremely harmful
to the economy and to consumers. Leniency represents a very efficient way of dismantling them and
virtually all competition authorities now have a program of this type.
What happens when a company
who contacts the Conseil de
la concurrence is not the first to do so?
It loses out since it will have to pay a fine anyway.
At best, the fine will be reduced by 50%, possibly
less. The system recompenses the first arrival then
the production of additional evidence but naturally it’s
always more difficult to come up with new evidence.
What’s the status of the harmonisation
of the leniency program on
a European level?
It’s now complete with the adoption of a common
framework program.
This harmonisation had several objectives: first,
avoiding a company “going shopping” by choosing
the authority having the most favourable program.
Second, guaranteeing a certain legal security
for companies by ensuring the homogeneity of
the treatment of cases. Third, enabling simplifying
the procedures, in particular by introducing the
equivalent of a “one-stop shop”: when you report a
cartel in one country, only a “summary application”
now needs to be made, describing the practices,
the sector and the companies concerned. In a way
this protects the applicant’s “place in the queue”. To be
the first in each country, it suffices to send the
same form to each of the authorities without having
to make 27 applications.
Leniency is a new procedure introduced in the Code
of commercial law (Code de commerce) by the New
Economic Regulations Act of 15 May 2001. It offers
immunity to companies blowing the whistle on an
anticompetitive agreement in which they have participated and of which the authorities did not have
previous knowledge.
INTERVIEW
sanctions
18/07/07
11:55
Page 40
sanctions
Distribution
hunt for anticompeti tive agreements
Heat is on
A smell of complicity
for sanitary equipment
The Conseil levied a substantial fine of € 45.4 m on
13 companies operating perfume and cosmetic
brands for vertical anticompetitive agreements
with their distributors, including the three distribution
chains Marionnaud, Nocibé and Séphora. Each
supplier sets its distributors a "recommended retail
price" for each of its products, and also indicated
the maximum discount they were permitted to
practise in order to level up the retail prices of the
products concerned, thus depriving consumers of
any possibility of benefiting from competition. Each
agreement also saw the introduction of a “ pricing
control system”. This involved pressure and threats
against recalcitrant distributors.
◗ Decision 06-D-04 of 13 March 2006
The Conseil sanctioned 69 companies specializing in the trade and manufacture
of heating and sanitary equipment and 7 professional federations for a series
of anticompetitive agreements, between 1993 and 1998, aimed at evicting
major “do-it-yourself” retailers and fitters' co-operatives. Sixteen different
objections were notified to 137 companies, and the Conseil ended up imposing
fines of between € 400 and € 7,500,000 depending on the extent of each
company’s contribution to the anticompetitive practices.
IN THE FIELD OF RETAIL DISTRIBUTION,
CONSUMERS MUST BE ABLE TO HAVE
THE BENEFIT OF COMPETITION
Litigation decisions in
Furiani: pricy stands
“Pooling agreements”
in the building
and civil engineering sector
Referred to by the Minister of Economy, the Conseil de la concurrence fined three companies bidding
on the reconstruction of the western stand of the Furiani Stadium for having exchanged information
before the bids were submitted, in view of rigging the bid so as to have one of them awarded the
contract at the agreed upon price. Beyond the penalties imposed, the Conseil noted the particularly
serious nature of the practices having resulted in the public procurement contract being awarded at
a higher price than that estimated by the awarding authority.
◗ Decision 06-D-13 of 6 June 2006
In the context of the Drapo case involving software
used to share markets, the Conseil fined 34 building
and civil engineering companies a total of € 48 m for
engaging in widespread anticompetitive agreements
involving public procurement contracts in the Île-deFrance (Greater Paris) area. The companies fined had
organized “pooling agreements” so as to share out the
contracts on a geographical basis, by project type
(Eole, Meteor), by contracting authority (i.e. SNCF,
RATP) and the type of work involved.
Taxis:
Marseille licence under duress
INCREASED SEVERITY AGAINST
LARGE-SCALE CARTELS
Following a ministerial referral, the Conseil sanctioned five taxi
unions and three radio-taxi networks for having implemented
an anticompetitive agreement fixing the resale price for licences.
The entire profession organized the resale of licences, at a single
price of € 38,100, by controlling the waiting list. It made threats
of retaliation against taxi drivers who refused to play along,
thus enabling the anticompetitive agreement to continue over
a long period.
The Conseil observed that these agreements had caused particularly serious economic damage in a fastexpanding sector, involving 40 contracts representing
€ 1 billion. The Conseil imposed exemplary fines on the
majors of the sector (5% of turnover, i.e. at the time the
maximum applicable) and between 1 and 4% on the
others.
2006
18/07/07
11:56
Page 42
sanctions
Exclusivity
assessed on a case-by-case basis
A
catchy
label
The Conseil sanctioned the Fédération Nationale des Gîtes de France for having
abused its dominant position. The Federation imposed abusive exclusivity clauses
on its members. Finding the scope and the duration of the clauses to be excessive
and detrimental to the development of competing labels and to the business
freedom of members, the Conseil sanctioned Gîtes de France and requested that
it removes the restrictive clauses concerned.
Wide open screens
for the 1st time in France: the
door cartel
The Conseil de la concurrence
opens the door to leniency
Applying for the first time its new leniency program, the Conseil did not levy a fine on France Portes
company. In view of the role it had played in the cartel, the company had faced a fine of € 1.25 m.
It benefited from full immunity in return for the evidence it provided to the Conseil and its full cooperation with the competition authorities at all stages in the procedure. The evidence provided
by France Portes, as well as the evidence seized during the investigation, effectively contributed to
establishing the existence of two cartels (one cartel on flush doors and another cartel on lacquered
doors) and to identify the authors.
This procedure resulted in the dismantling of these two national cartels aimed at stabilizing prices
by drafting common minimum price grids in a context of difficult market conditions for all the companies
of the sector.
Examining practices in the sector of motion picture advertising, the Conseil
considered that the two media agencies Médiavision and Circuit
A/Screenvision had not committed any unfair practices, although together
holding a dominant position on the market and having signed various
exclusivity agreements with theatre operators. It notably observed that
competition had still been able to develop, one competitor even having
become the leader on the market for local motion picture advertising.
◗ Decision 06-D-18 of 28 June 2006
Litigation decisions in
Leniency, procedure applied
The Conseil de la concurrence imposed fines on the other companies having participated in the cartels,
namely the companies Righini, Malerba, JH Industries, Ekem, Fonmarty, Magri, Blocfer, BerkvensSvedex and Polynorm (successor of Polydex). This decision was upheld in full by the Paris Court of
Appeal.
◗ Decision 06-D-09 of 11 April 2006
2006
Leniency in
2006
Penalties in 2006
06-D-03
06-D-04
06-D-06
06-D-07
06-D-08
06-D-09
06-D-13
06-D-15
06-D-22
06-D-25
06-D-30
06-D-36
06-D-37
Total
Type of case
Heating and plumbing
Luxury perfumes
Self-catering and bed and breakfast
accommodation (Gîtes de France)
Building and civil engineering
in Ile-de-France (Greater Paris)
Public works in the Hérault
Door manufacturing (leniency)
Furiani stadium
Railways
Spark plugs
Work on the Rouen cathedral
Taxis in Marseille
Radiologists
Distribution of bicycles
Amount
of fines
in €
€ 26,120,400
€ 45,440,000
€ 10,000
€ 47,997,000
€ 600,000
€ 5,035,000
€ 718,000
€ 1,325,300
€ 300,000
€ 13,630
€ 113,850
€ 15,000
€ 580,820
€ 128,269,000
CLOSE TO 30 APPLICATIONS FOR
LENIENCY HAVE BEEN MADE SINCE 2002
LENIENCY, THE SWORD OF DAMOCLES
HANGING OVER ALL CARTELS
The full text of the decisions and press
releases are available at the Conseil
de la concurrence’s website at:
Number
and date
of decision
18/07/07
11:56
Page 44
Main fields of economic intervention
of the Conseil de la concurrence
PUBLISHING/MEDIA/PRESS
Publishing, printing
and reproduction (INSEE code 22)
Number of opinions
and decisions
11
References of opinions and decisions
06-D-01 (NMPP/Export Presse)
06-D-14 (Pool Presse)
06-D-16 (NMPP/France Action Presse)
06-D-18 (cinema advertising)
Recreational, cultural
and sporting activities
(INSEE code 92)
Economic sectors
06-D-23 (publishing of geographic maps)
06-D-29 (GIE Les Indépendants)
TELECOM/POSTAL SERVICES
06-D-39 (Impression des Pyrénées)
Postal Services
and Telecommunications
(Insee code 64)
06-D-40 (Audipresse)
06-A-02 (Bertelsmann/Clemval)
Number of opinions
and decisions
7
06-A-01 (wholesale markets for audiovisual broadcasting)
06-A-05 (wholesale markets for SMS terminations)
06-A-10 (leased lines)
06-MC-01 (MLP/NMPP)
11*
06-D-02 (bituminous coating material
in the Ardennes)
06-D-03 (heating and plumbing equipment)
06-D-07 (building and civil engineering
in Île-de-France (Greater Paris)/
Drapo software)
Manufacture of other
non-metallic mineral products
(Insee code 26)
06-A-11 (Outremer Telecom)
06-A-21 (broadband access)
VEHICLES
5
Automobile trade and repairs
(Insee code 50)
06-D-08 (Collège de l’Hérault)
06-D-13 (Furiani stadium)
Woodwork and production
of wooden articles (Insee code 20)
06-D-15 (laying and maintenance
of railway lines)
Metalwork (Insee code 28)
06-D-17 (transportation of ready-to-use
cement)
06-D-22 (spark plugs for motorcycles)
06-D-26 (Yamaha - MBK)
06-D-27 (AD net/Citroën)
ENERGY
4
Production and distribution
of electricity, gas and heat
(Insee code 40)
06-A-14 (low-voltage service boxes)
DISTRIBUTION
(RETAIL AND WHOLESALE)
Retail trade and repair
of home appliances
(Insee code 52)
Wholesale
(Insee code 51)
8
06-D-04 (perfumes)
06-D-12 (chemical commodities)
06-D-24 (Bijourama)
06-D-28 (Home Cinema)
06-A-08 (Usine Électricité Metz)
06-A-12 (separate accounting GDF – eligible customers,
non-eligible customers)
06-A-15 (DNN natural gas)
06-A-23 (separate accounting for regulated activities
of Total Infrastructures Gaz France)
06-D-25 (work on the Rouen cathedral)
06-D-33 (public procurement contracts
in the building sector in Auvergne)
06-D-11 (Turbo Europe)
06-D-19 (wholesale trade in automobile parts)
06-D-09 (door cartel)
Manufacture of machines
and equipment (Insee code 29)
06-D-10 (Stock-Com/Bouygues Télécom)
06-D-20 (directory inquiries)
06-A-13 (Canal +/TPS)
BUILDING AND CIVIL
ENGINEERING/CONSTRUCTION
Construction (Insee code 45)
Rubber and plastics industry
(Insee code 25)
References of opinions and decisions
SERVICES AND PROFESSIONS
3
Services to companies
(Insee code 74)
TRANSPORTATION
06-A-04 (detection of stolen vehicles)
06-A-22 (Reims exhibit)
3
Transportation and auxiliary
transportation services
(codes Insee 60 to 63)
HEALTH AND SOCIAL ACTION
06-A-07 (fair trade)
Insee code 85
06-A-09 (UEEFL)
06-A-19 (draft decree/delegated management
of railway infrastructures)
06-D-30 (taxis in Marseille)
06-MC-03 (service to Corsica)
06-D-31 (Heineken)
06-D-37 (bicycles)
06-D-32 (land surveyors)
3
06-D-05 (sanitary transportation)
06-D-36 (radiologists)
06-MC-02 (Bouc-Bel-Air nursery)
* of which 7 concerning public procurement contracts
Economic sectors
18/07/07
11:56
The annual report for 2006 can be consulted at www.conseil-concurrence.fr and ordered from
the Documentation française: 29, quai Voltaire 75 344 Paris cedex 07
Tel.: +33 (0)1 40 15 70 00 – Fax: +33 (0)1 40 15 68 01 • www.ladocumentationfrancaise.fr
Conseil de la concurrence
Communication Service
11, rue de l’Échelle - 75001 Paris- France -Tel.: + 33 (01) 55 04 00 00
Conception & Realization :
- Photo credit: ® Conseil de la Concurrence • TOMA : Bruno Lévy • Getty Images : Flying Colours Ltd - Stockbyte - Philippe Marchand - Ryan McVay - Betsie Van der Meer - Image Source Pink - Kay Blaschke Noel Hendrickson - Panoramic Images – Bigshots - Digital Vision - Christian Zachariasen - John A Rizzo • Fotolia : yuri_arcurs – jmlfr – Charly - objects-photographer.com – barsik – picpics – jacquespalut – andresr
Page 46

2006 - Autorité de la concurrence

Transcription

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