The French Competition Authority (FCA) published on 10 February 2012 its procedural notice concerning the French settlement procedure (the Notice). This Notice, by proposing a summary of the FCA’s case law, is aimed at introducing more transparency and predictability in the application of procedural rules. While companies may find this procedure to be in their interest and on occasion may even have no other procedural choice, they should not be misguided into thinking that this procedure will open an avenue for the negotiation of their sanction, which ultimately will be determined by the decision-making body (the Collège) of the FCA.
The French settlement procedure may appear attractive. It enables a company suspected of anticompetitive practices (anticompetitive agreement or abuse of a dominant position) to forego any challenge to the statement of objections it receives and, in exchange, to obtain a reduction in fines of 10%, which can go up to 25% if the company also proposes commitments for the future, such as the implementation of a compliance program (which in itself allows for up to a 10% reduction). Furthermore, the maximum amount of the fine is reduced by half.
Despite its apparent advantages, this procedure is subject to several major pitfalls. While the Notice deserves credit for the clarification of applicable rules, it is regrettable that advantage was not taken of the opportunity to overhaul some of these rules and in particular to remove certain limiting factors as ultimately, the French settlement procedure does not provide many options to companies which have recourse to it.
Thus, the predictability is rather relative, given that companies negotiate with the investigating services of the FCA, a body which does not decide on the final amount of the fine. The amount of the fine will actually be calculated by the "Collège" of the FCA, which is not bound by the proposal of the investigating services. The Notice only provides that the case can be sent back to the investigating services and follow the ordinary procedure if the "Collège" of the FCA intends not to follow the recommendation of the head of the investigation services in a direction which is not favourable to the company. As a result, the time saving factor is reduced and the company may find that its position of defence is weakened.
Furthermore, the French settlement procedure should not be considered equivalent to the settlement procedure available before the European Commission or other national competition authorities such as the OFT in the UK. Companies which have recourse to the French settlement procedure do not have any visibility on the final amount of their sanction as they can only negotiate a percentage of reduction of the fine, without knowing the absolute amount of the fine. If the intention was to provide improved predictability, the Notice could have, at the least, allowed for a negotiation of an absolute value of the fine.
Moreover, the Notice does not take the opportunity to review the articulation between the standard procedure and the French settlement procedure when only some of the undertakings concerned use the French settlement procedure. Quite to the contrary, the Notice confirms the still controversial French Supreme Court’s approach in the “temporary work” case under which the company which challenges the statement of objections finds itself, because of the recognition by the other companies of the accuracy of the facts, deprived of the possibility to demonstrate that there has, in fact, been no infringement. As a result, the FCA does not need to demonstrate the accuracy of the infringement but only the individual participation of the undertaking which challenges the claims made against it in the anticompetitive practices in question.
Given the irreversible effects for the rights of the defence, companies should thus carefully weigh the interest of using the French settlement procedure, at least when they have the choice to do so, which is not really the case anymore as soon as other parties to the same procedure have decided to make use of the procedure.