Criminal repression of competition law: establishing institutional links between the French National Financial Prosecutor’s Office and the French Competition Authority
On February 23, 2022 By Jérémy BERNARD
New stage in the criminal repression of competition law: establishing institutional links between the French National Financial Prosecutor’s Office and the French Competition Authority
In its Summary 2021, presenting its activity during the year 2021, the French National Financial Prosecutor’s Office reveals that, following the extension of its jurisdiction to include competition law offences, it has established institutional links with the French Competition Authority without giving the details of these links.
1. The decriminalization of French competition law began with Article 17 of French Law No. 77-806 of 19 July 1977 concerning the control of economic concentration and the repression of anticompetitive agreements and abuses of a dominant position, which empowered the Minister in charge of economy affairs to impose administrative sanctions on anticompetitive agreements, and abuse of a dominant position. French Ordinance No. 86-1243 of 1st December 1986 on the freedom of pricing and competition amplified the decriminalization by entrusting the sanction of anticompetitive practices, namely anti-competitive agreements, abuses of a dominant position and abuses of economic dependency, to an independent commission called the French Competition Council (Conseil de la concurrence), now the French Competition Authority (Autorité de la concurrence).
2. However, the decriminalization to which French Ordinance of 1st December 1986 proceeded was not total since Article 7 of the French Ordinance maintained a criminal touch by qualifying as an offense the fraudulent, personal, and determining participation in the design, organization, and/or implementation of an anticompetitive practice. This provision was included in Article L. 420-6 of the new French Commercial Code (Code de commerce) introduced by French Ordinance No. 2000-912 of 18 September 2000 relating to the legislative part of the commercial code. Its scope was later extended by Article 3(I)(4°) of French Law No. 2016-1920 of 29 December 2016 concerning to the regulation, accountability, and simplification in the industry for the public transportation of individuals.
3. To date, Article L. 420-6 of the French Commercial Code punishes with a maximum four year imprisonment and/or a fine of Euros 75,000 the act, for any natural person, of fraudulently taking a personal and determining part in the design, organization, and/or implementation of an anticompetitive agreement referred to in Article L. 420-1 of the same Code, an abuse of a dominant position or an abuse of economic dependency prohibited by Article L. 420-2 of said Code, and/or any of the concerted or unilateral practices related to the public transportation of individuals prohibited by Article L. 420-2-2 of this Code.
4. However, this provision has been scarcely used by prosecutors as a basis for prosecution and applied by criminal courts to convict defendants, despite reports made by the French Competition Authority based on Article 40 of the French Criminal Procedure Code (Code de procedure pénale).
5. This is undoubtedly the reason why Article 13 of French Law No. 2020-1672 of 24 December 2020 relating to the European Public Prosecutor’s Office, environmental justice and specialized criminal justice amended Article 705 of the Criminal Procedure Code to include Article L. 420-6 of the French Commercial Code in the list of offenses against which the French National Financial Prosecutor’s Office has jurisdiction to initiate proceedings, on which the investigating judges (juges d’instruction) specialized in financial matters of the Judicial Court of First instance (Tribunal judiciaire) of Paris can investigate and that this Court has the mission to suppress. The French National Financial Prosecutor’s Office, the investigation judges of the Judicial Court of First Instance of Paris specialized in financial matters, and this Court have competing jurisdiction with the one of the local prosecutor’s offices, investigating judges and judicial courts of first instance. The French Parliament sought to “ensure the best possible effectiveness in the fight against anticompetitive practices” and to “allow a centralized and specialized treatment of this complex prosecution” (draft law concerning the European Public Prosecutor’s Office and specialized criminal justice, explanatory memorandum).
6. Seizing on this new competence, the French National Financial Prosecutor’s Office and the French Competition Authority established institutional links, the existence of which was made public by the former in its Summary 2021. Without disclosing the details, the French National Financial Prosecutor’s Office limited to specifying that these links are intended to coordinate the intervention of the two agencies with the “shared objective of ensuring efficiency and consistency in the handling of administrative procedures and criminal prosecutions, particularly in terms of sanctions” (French National Financial Prosecutor’s Office, Summary 2021, p.14).
7. The Summary 2021 of the French National Financial Prosecutor’s Office does not mention the existence of an equivalent institutional cooperation with the Directorate General for Competition, Consumer Affairs and Fraud Repression (Direction générale de la concurrence, de la consommation et de la repression des fraudes, hereinafter the “DGCCRF”), although the latter has a competing jurisdiction with the one of the French Competition Authority to initiate and conduct competition investigations, but not to sanction anticompetitive practices with the exception of the so-called micro-anticompetitive practices (known as “micro-PAC”). This is undoubtedly the reason why the French National Financial Prosecutor’s Office has probably sought first to forge links with the French Competition Authority: the latter is the main body in charge of sanctioning infringements to competition law. One may only call for the establishment of an institutional cooperation between the French National Financial Prosecutor’s Office and the DGCCRF in a near future.
8. Is the establishment of institutional links between the French National Financial Prosecutor’s Office and the French Competition Authority a sign of an upcoming increase in prosecutions based on Article L. 420-6 of the French Commercial Code? As the global trend has recently been for the (re)criminalization of competition law to strengthen the effectiveness and dissuasive nature of sanctions in this field, one can anticipate future criminal proceedings against anticompetitive practices in France. This movement could nevertheless be restricted by to the limited resources allocated to the French judicial system.
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