From the enforcer: Competition Authority

From the enforcer: France

Address: 11 rue de l’Echelle, 75001 Paris, France
Tel: +33 1 55 04 00 00
Fax: +33 1 55 04 02 35
Web: www.autoritedelaconcurrence.fr

Contacts

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Isabelle de Silva
President
Tel: +33 1 55 04 01 30
[email protected]

Mathias Pigeat
Chief of Staff, Head of International (Office of the President)
Tel: +33 1 55 04 02 28
Email: [email protected]

Juliette Théry-Schultz
Head of the Legal Department
Tel: +33 1 55 04 02 46
Email: [email protected]

Virginie Guin
Head of the Communications Office
Tel: +33 1 55 04 02 32
Email: [email protected]

Stanislas Martin
General Rapporteur (Investigation Services)
Tel: +33 1 55 04 00 50
Email: [email protected]

Étienne Chantrel
Head of the Mergers Unit
Tel: +33 1 55 04 00 04
Email: [email protected]

Étienne Pfister
Chief Economist
Tel: +33 1 55 04 00 73
Email: [email protected]

Questions and answers

How long is the head of agency’s term of office?

The president of the Competition Authority (the Authority) is appointed for a five-year term, which can be renewed once.

When is he or she due for reappointment?

Isabelle de Silva, formerly director of legal affairs of the Ministry of Ecology, Sustainable Development, Transports and Housing (2009–2011), member of the Press Regulation and Distribution Authority (2012), and president of the sixth chamber of the Administrative Supreme Court (2013–2016), was appointed as president of the Authority in October 2016. Her mandate expires in 2021.

Which posts within the organisation are political appointments?

None. The Authority is a fully independent agency.

What is the agency’s annual budget?

The 2019 budget was €21.8 million, a slight decrease from the previous year (€21.9 million for 2018).

How many staff are employed by the agency?

The Authority currently employs 199 persons, short-term contracts included. A satisfactory balance between legal and economic experts has been achieved.

To whom does the head of the agency report?

The law states that the Authority is independent and therefore does not report to the government. However, mechanisms have been set up, at the request of the agency itself, in order to foster its public accountability. These include the possibility for the head of agency to be heard by the committees in charge of economic affairs in both houses of the parliament (National Assembly and Senate) on any specific competition issue other than ongoing cases, as well as on overall achievements and perspectives.

Furthermore, according to article 21 of the law on the status of independent public agencies of 20 January 2017 (Law No. 2017-55), every year before 1 June, independent public agencies and public authorities must submit to the government and parliament, an annual report describing how their missions have been carried out. This annual report is made public.

Do any industry-specific regulators have competition powers?

No. The Authority has exclusive jurisdiction to enforce competition law and policy in order to make markets work for the common benefit of businesses and consumers, including in all regulated markets.

By contrast, sector-specific agencies oversee the functioning of particular industries (for example, telecoms, energy, broadcasting) and are not in charge of competition.

If so, how do these relate to your agency’s role?

The law provides for a comprehensive set of cross-consultation and referral mechanisms to allow the competition agency and sector regulators to share expertise in given cases.

May politicians overrule or disregard authority’s decisions? If they have ever exercised this right, describe the most recent example.

No. Antitrust decisions made by the Authority are binding and directly enforceable and can neither be overruled nor disregarded by any branch of government.

In the field of merger review, the Minister of the Economy can take up a case that gives rise to issues of general interest (such as national security, public health) once the Authority has taken a final decision on the merits. In such instances, the minister must base his or her decision on public policy grounds and is specifically barred from overriding the competition analysis made by the Authority. This prerogative has been exercised for the first time in June 2018, when the Authority cleared the acquisition by Financière Cofigeo of certain securities and assets of the ready meals arms of Agripole group and subjected it to two targeted divestments (a production site and the Zapetti brand) designed to maintain competition in the sector. The Minister of the Economy then decided to use its power to re-examine the operation in view of public interest grounds other than those of competition.

Does the law allow non-competition aims to be considered when your agency takes decisions?

No. French antitrust and merger law requires that the Authority focus exclusively on competition issues.

Which body hears appeals against the agency’s decisions? Is there any form of judicial review beyond that mentioned above? If so, which body conducts this? Has any competition decision by the agency been overturned?

The Paris Court of Appeal hears appeals against antitrust decisions and the French Administrative Supreme Court hears appeals against merger decisions. Judgments of the Paris Court of Appeal may be appealed before the Supreme Court on points of law only. The Paris Court of Appeal and the French Administrative Supreme Court both exercise full judicial review that can lead to either the annulment or the amendment of the challenged decisions.

Has the authority ever blocked a proposed merger? If yes, please provide the most recent instances.

No. However, a notification can be withdrawn in the course of the review carried out by the Authority. The Authority seeks to ensure that competition on the market at stake is not significantly lessened as a consequence of the proposed merger and can ask the parties to offer remedies to address competition concerns. If the stakeholders feel they are not in a position to come up with appropriate commitments, they may choose to forego the planned operation. In 2019, four mergers were abandoned by the notifying parties following investigative actions from the Authority.

Has the authority ever imposed conditions on a proposed merger? If yes, please provide the most recent instances.

Yes. In 2019, nine mergers were cleared subject to conditions (Alsa France SAS - Alsa and Moench/group Dr. Oerker (manufacture of products intended for desserts); Marie Brizard Wine & Spirits/Compagnie Financière Européenne de Prises de Participation (production and marketing of spirits); RATP Développement and Keolis (transport); Mondadori France/Reworld Media (media); Coopératives agricoles D’Aucy et Triskalia (cereal collection…); France Télévisions, TF1 and Métropole Télévision (media); NDIS/SAFO (food retail…); Distribution de Matériaux pour les Travaux Public/groupe Frans Bonhomme (trading of building material); Audilab and its affiliate /group William Demant (hearing aids)), representing 3.33 per cent of the total number of mergers cleared in 2019.

The mergers unit carefully negotiates and scrutinises the commitments proposed by the parties.

Has the authority conducted a Phase II investigation in any of its merger filings? If yes, please provide the most recent instances.

The Authority initiated three Phase II investigations in 2019. The reviews are still ongoing for two of them and the Authority cleared the acquisition of Hexagone Santé Méditerranée by Elsan (health facilities) subject to commitments in February 2020.

Has the authority ever pursued a company based outside your jurisdiction for a cartel offence? If yes, please provide the most recent instances.

The Authority goes after cartelists based outside France whenever the effects of the offences were felt on the French economy. The latest case is that of a cartel among the main fruit-compote manufacturers for pricing agreement and market sharing, who by way of a decision of 17 December 2019, were fined a total of up to €58.3 million. The cartel was brought to the Authority in early 2014 by the companies from the Dutch group Coroos, which applied for leniency, and dawn raids were carried out in September 2015 by the investigation services of the French Competition Authority with the cooperation of the Dutch competition authority. These led to finding extensive evidence, which completed the evidence brought by the leniency applicant.

Do you operate an immunity and leniency programme? Whom should potential applicants contact? What discounts are available to companies that cooperate with cartel investigations?

The Authority has had guidelines detailing its leniency programme since April 2006, the latest revision of which, in April 2015, brought it in line with the revised European Competition Network Model Leniency Programme.

The person of contact is Stanislas Martin, general rapporteur, head of investigation, and his adviser Anne Krenzer. The outcome of this programme has been very positive. Thanks to leniency applications, the Authority was able to detect and punish severe infringements to competition law, among which the fruit-compote cartel in 2019, mentioned above.

Full immunity may be awarded to the first applicant to provide information that allows the Authority to either obtain a judicial warrant for the conduct of dawn raids or to establish the infringement, when it could not have done so without said information. Partial immunity, capped at 50 per cent, may be awarded to subsequent applicants or to a first applicant when the Authority already had sufficient information.

Is there a criminal enforcement track? If so, who is responsible for it?

The law provides for criminal enforcement against individuals, as opposed to companies, that are subject to administrative enforcement by the Authority. If the Authority believes that a case warrants criminal enforcement in addition to administrative enforcement, it can refer it to criminal courts. The Authority has done so in some instances concerning hardcore infringements (bid-rigging and cartels). It has, however, stated that its policy is not to refer leniency applicants to criminal courts.

Does the authority conduct criminal investigations and prosecutions for cartel activity? If not, is there another authority in the country that does?

No, except when it receives a letter rogatory from a magistrate (following a revision brought about by the Law of 17 March 2014).

Are there any plans to reform the competition law?

The Authority will see its powers reinforced as a result of the Directive (EU) No. 2019/1 (ECN+ Directive), adopted on 11 December 2018, which is meant to empower the competition authorities of the member states to be more effective enforcers and to ensure the proper functioning of the internal market. The Authority will, for example, be in a position to prioritise cases depending on its priorities and to start proceedings at its own initiative to issue interim measures, which could until then only be issued on the basis of a complaint. The directive is in the process of being transposed into national law.

The directive must be transposed within two years.

When did the last review of the law occur?

The Authority saw in 2019 the results of its efforts in modernising its merger control regime that it launched back in 2017 with the adoption of the Decree No. 2019-339 of 18 April 2019 on the simplification of merger notification and the implementation of the online-only notification system for certain merger transactions as of October 2019.

The Authority also received new powers in the antitrust area with Decree No. 2019-1247 of 28 November 2019 following the adoption of the Law on growth (PACTE) of 22 May 2019, which authorises the Authority to have access, under specified conditions, to certain phone data for the purposes of conducting investigations.

The Law for Growth, Activity and Equal Opportunities of 6 August 2015 (also known as the Macron Law) introduced a series of improvements to the Authority’s procedures, such as revamping its settlement procedure to allow parties and the investigative services to settle on an anticipated maximum amount of fine, and adjustments to its merger control procedures, as regards, inter alia, the possibility to impose renewed remedies in the face of non-compliance or to suspend the time period in Phase I when information is missing.

Under this new law, new missions are entrusted to the Authority. It will now establish, by means of mandatory opinion, the rate-fixing method for seven regulated legal professions: judicial auctioneers, commercial court registrars, bailiffs, court-appointed administrators, court-appointed liquidators, notaries and lawyers. It can also, either ex officio or at the government’s request, issue an opinion on the draft joint decrees of the ministers for justice and for the economy, which fix the rates charged for the services provided, on the basis of the aforementioned rate-fixing method. Moreover, the law makes provision for the Authority to map out the areas where new offices are needed so as to improve proximity or provision of services and those where new establishments could imperil the pursuit of operation of existing offices and the quality of services provided. The map and the recommendations of the Authority will be reviewed every two years.

The Authority has also been entrusted with new powers, following the adoption of the law of 29 December 2016 regarding regulation, accountability and simplification in the urban transport sector, which creates new per se infringements.

Furthermore, a law on independent public agencies was enacted on 10 January 2017. It consolidates in one single status applicable to all independent public agencies the rules governing their internal organisation, preventing conflicts of interest as well those pertaining to their relations with parliament and government.

The most recent review concerns the transposition of Directive 2014/104/EU of 26 November 2014, the ‘damages directive’. The directive has been transposed into French law by Order No. 2017-303, dated 9 March 2017, and its implementing decree of the same date. These texts provide for specific rules on the interaction between private and public enforcement of competition law.

Law No. 2018-938 of 30 October 2018 strengthened the Authority’s means of controlling the purchasing and reference listing offices by granting it new courses of action.

Do you have a separate economics team? If so, please give details.

Yes, it is made up of nine members and is headed by Étienne Pfister (chief economist), who took office on 1 May 2013. A PhD economist and a graduate of the University of Paris, Étienne Pfister was formerly an economist in the economics team and a deputy rapporteur general at the Authority. Prior to that, he was an assistant professor of economics in the University of Nancy and a researcher at the Bureau of Theoretical and Empirical Economics (BETA) in Strasbourg. Étienne Pfister is assisted by Cédric Nouel de Buzonnière.

Has the authority conducted a dawn raid?

Yes. In 2019, the Authority conducted eight dawn raids.

Has the authority imposed penalties on officers or directors of companies for offences committed by the company? If yes, please provide the most recent instances.

No, the Authority has no power to do so, but it may pass on the case, if it suspects the commission of a criminal offence, to the public prosecutor (under article L.420-6 and L.462-6 of the French Commercial Code), which is entitled to impose penalties on individuals.

What are the pre-merger notification thresholds, if any, for the buyer and seller involved in a merger?

The combined aggregate worldwide turnover of all participating entities must be above €150 million (first threshold) and the domestic turnover of at least two participating entities must be above €50 million each (second threshold). To be notified in France, the merger must not reach the European thresholds set by the EU Merger Regulation No. 139/2004 (in that case, the merger falls within the scope of the European Commission’s exclusive jurisdiction).

For mergers in the retail sector, thresholds are, respectively, €75 million worldwide for all participants and €15 million individually for at least two participating entities in the retail sector in France.

In the French overseas territories, the thresholds are respectively, €75 and €15 million, except for retail mergers €75 and €5 million in the retail sector.

Are there any restrictions on investments that involve less than a majority stake in the business?

No.

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France: from the enforcer's competition economists

Address: 11, rue de l’Echelle, 75001 Paris, France
Tel: +33 1 5504 0000
Fax: +33 1 5504 0033
Web: www.autoritedelaconcurrence.fr

Contacts

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Emmanuel Combe
Vice President
Tel: +33 155 04 00 54
Fax: +33 155 04 00 33
Email: [email protected]

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Etienne Pfister
Chief Economist
Tel: +33 1 55 04 00 73
Fax: +33 1 55 04 00 66
Email:[email protected]

Questions and answers

How many economists do you employ?

The French Competition Authority (the Authority) employs 27 economists.

Do you have a separate economics unit, or ‘bureau’?

Yes. The Authority has had a dedicated economic team since 2006.

Since then, the team has continued to expand. It now comprises nine people, seven of them with a PhD in industrial economics. Together with the Board (which includes an experienced PhD economist) and the Investigation Services, the chief economist’s team has tremendously stimulated economic debate with parties, and created a trend towards a more effect-based approach. The Authority has adopted a line of sound economic reasoning and is committed to its continued development in merger and antitrust cases.

Do you have a chief economist?

Etienne Pfister has been chief economist of the Authority since May 2013 – he holds a PhD in economics from the University of Paris I. Before joining the economics unit in 2007, Mr Pfister had been an assistant professor at the University of Nancy and a lecturer at the Faculty of Sciences Politiques in Paris. His main research interests covered patent and innovation strategies by firms as well as competition policy. In 2010, Etienne Pfister became deputy chief economist and at the end of the same year, deputy general rapporteur of the Authority, leading a team of 10 to 12 case handlers with a particular focus on vertical relationships and retailing. As the chief economist, Etienne Pfister is assisted by Cédric Nouel de Buzonnière, a trained engineer from the Ecole Polytechnique and the National School of Statistics and Economic Administration.

To whom does the chief economist report?

To the president of the Authority (Isabelle de Silva) or the General Rapporteur (Stanislas Martin), depending on the type of activity.

Does the chief economist have the power to hire his or her own staff?

Yes, with the agreement of the general rapporteur, he can hire his own staff. His team has seven highly skilled economists and one financial expert in addition to the chief economist.

How many of your economists have a PhD in industrial economics?

Seven of them have PhDs.

Does the agency include a specialist economist on every case team? If not, why not?

No. Economists are extremely valuable assets and must therefore be focused on cases where their intervention is most useful. In practice, all cases involving economic issues include a specialist economist. However, not assigning a member of the chief economist’s team to a case does not mean that no economic assessment is undertaken, as many case handlers are economists (both in the antitrust units and in the mergers unit) and many members of the board (college) are themselves economists.

Is the economics unit called on to be a ‘second pair of eyes’ during cases – is it one of the agency’s checks and balances?

All complex cases in which economic questions are to be solved are systematically reviewed by one or more economists. The economic unit provides assistance in the preparation and analysis of cases (including at early stages of the procedure). It facilitates the interaction with the economists chosen by the parties in antitrust and merger cases and analyses the studies and reports they submit to the Authority.

How much economic work is outsourced? What type of work is outsourced?

Usually, no economic work is outsourced. The Authority includes a large number of economists that may be called upon when specific expertise is required.

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