JANUARY 2013
Legal Focus
companies concerned, as soon as they are willing to negotiate with the Authority a number of commitments in order to modify their practices and address the competition issues so identified. Indeed, this mechanism enables the Competition Authority to issue, after a fast-track process, a decision making the commitments binding and put an end to the case without prosecuting the companies.
Microsoft's failure to fulfill promises it made three years ago to offer consumers a choice of browsers could now see the software giant landed with a significant fine for competition violations. What is the approach of the French competition authorities on this subject?
This specific issue gave rise so far to a limited number of decisions under French law, even though the Competition Authority regularly uses the settlement procedure as mentioned above.
However, in 2011, the Authority took a decision which is a warning for the companies having taken commitments to fully comply with them. Indeed, the Authority pointed out that non-compliance is a serious competition breach. Nevertheless, in this case, taking into account the specific circumstances, the Authority imposed a small fine. This being said, this issue is clearly one of the priority of the Authority and the risk of hefty fines is actual.
What do you feel are the main challenges in competition enforcement?
Under both EU and French law, one of the main challenges is undoubtedly the question of damages actions allowing the victims to obtain compensation for the harm they have suffered. Competition authorities consider that such claims may help to deter companies from violating competition rules. In practice, these claims still face several issues, such as the evidence of the anticompetitive practice, the evaluation of the damages suffered, the costs and the duration of the proceedings.
Concerning the calculation of the damages, it is clear that our legal system is different from the US one and does not rely on punitive damages. Full compensation is the guiding principle in the European legal framework; however, the way to calculate not only the actual loss but also the loss of profit, which implies to evaluate the situation of the victim in a hypothetical scenario (what would have been its situation in the absence of the anticompetitive practice?), should be facilitated.
In addition, interaction between leniency programs and actions for damages should be
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taken into account. To ensure that leniency remains attractive, a limitation of the civil liability of the leniency applicants and protection against disclosure of their statements should be considered.
Another challenge is probably the compliance programs which are supported by the French Competition Authority. Compliance programs are programs whereby companies express their commitment to comply with competition rules. Such programs include measures set up to create a culture of compliance (training, awareness actions), as well as internal alert and audit mechanisms for preventing, detecting and processing possible wrongdoings. This year, the Authority released guidelines on its approach, which improves transparency and legal certainty. It detailed the conditions under which it may grant a fine reduction to a company ready to carry on or improve a compliance program.
How could legislative frameworks be altered to ease these challenges?
In France, the question on whether to adopt a specific legislation allowing collective actions in antitrust matters has been discussed for several years; it could arise next year. When such legislation is issued, the number of actions for damages should increase significantly. Today, individual actions are introduced only in case the victims have suffered serious damages and are able to devote resources to legal actions. LM
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contact details:
Muriel Perrier Partner
Vivien & associes
3 rue de Monttessuy - 75007 Paris tel: + 33 1 45 02 39 50
Email:
muriel.perrier@
va-fr.com Website:
www.va-fr.com
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