On 27 December 2018, the French Competition Authority (FCA) released guidelines on the conditions for implementing the settlement procedure applicable to businesses that do not dispute a notified breach of competition law (Settlement). These guidelines, based on the FCA's practice and case-law, could provide useful information to litigants. They apply to any cases in which a statement of objections was sent after 7 August 2015.
Expected procedural efficiencies
The Settlement procedure was introduced in the French Commercial Code under article L.464-2 III on 6 August 2015 and has already been applied in 12 cases. Regarded as a "much appreciated tool" for businesses, the Settlement procedure is praised by the FCA, which highlights the "input of negotiated practices by which the businesses decide to cooperate".
The FCA expects these guidelines to create procedural efficiencies and especially to be a way to reduce procedural timelines. Moreover, the "constructive behaviour" of applicant businesses is said to be key in the predictability of fines, faster compliance and reduction of litigation costs.
Request to implement the settlement procedure and conditions of validity
A Settlement can be sought by any business against which competition law enforcement proceedings were initiated before the FCA pursuant to Articles L. 410-3, L. 420-1 to L. 420-2-2 and L. 420-5 of the French Commercial Code or Article 101 or 102 TFEU, and which has received a statement of objections.
A documented request for Settlement must be sent to the General Rapporteur as soon as possible, even before the notification of the statement of objections. No particular motivation is required.
However, for the request to be valid, the company must waive its right to challenge the competition law infringements set forth in the statement of objections. Such waiver takes the form of a "clear, complete unambiguous and unconditional" declaration by which its author indicates that it does not challenge the existence of all the alleged practices, nor their legal qualification or their accountability. However, the waiver does not constitute an admission or an acknowledgement of liability.
The request for Settlement does not affect leniency applications and therefore does not prevent the applicant from benefitting from a total or partial exemption of fines as a result of leniency.
Proceedings before the Investigation Services
The appropriateness of the request is assessed by the General Rapporteur on a case-by-case and discretionary basis. Should the case be considered suitable for the implementation of a Settlement, discussions may be initiated with the concerned parties. The General Rapporteur may inform other addressees of the statement of objections of on-going discussions with a view to concluding a Settlement.
The Settlement offer takes into account "substantial, credible and verifiable" commitments proposed by the concerned parties and/or potential leniency applications and sets the minimum and maximum amount of the contemplated fine. The FCA's Guidelines on the setting of fines may be used as a reference but will not be binding on the FCA Board's decision.
The agreement between the Rapporteur and the parties is registered within a Settlement report, which has to be drafted and signed within two months from the receipt of the statement of objections.
No document transmitted by the parties relating to the implementation of the Settlement procedure will be included in the case file, whether or not the procedure resulted in the signature of a Settlement report. The Settlement report cannot be disclosed to the other parties involved in the case or to third parties. This may have an impact on potential private enforcement claims.
The FCA Board's decision
The FCA Board examines the facts and the objections notified in the statement of objections, as well as the Settlement report. Each party is heard by the Board and may submit observations.
The Board may either impose a fine within the range set by the Settlement report and up to the limit set forth by the law or refer the matter back for investigation. Such referral for investigation invalidates the Settlement report previously signed.
Osborne Clarke comment
The new guidelines are certainly a welcome tool for any companies seeking to reach a settlement with the FCA, but moreover, the FCA's aim of assisting companies who do not dispute alleged breaches is reflective of a more general aim by both the Commission and national competition authorities to reward co-operation; a trend we expect to see continue in 2019.