Cartel practices are covered by the rules on anticompetitive agreements between competitors set out in the French Commercial Code (Articles L. 420-1 et seq.) and in EU law (Articles 101(1) to 101(3) of the Treaty on the Functioning of the European Union – TFEU).

Prohibition principle

Article L. 420-1 of the French Commercial Code prohibits agreements which have the object or effect of preventing, restricting or distorting competition on the national market, in terms similar to the prohibition of anticompetitive agreements under EU law (Article 101(1) TFEU).

French authorities and national courts must apply EU law, in parallel with national law, where trade between EU Member States is likely to be affected. Where both national and EU law are applicable, the application of national law cannot lead to the prohibition of agreements that EU law does not prohibit or exempts.

Exemption mechanisms

French and EU law also contain similar individual exemption mechanisms (Article L. 420-4 of the French Commercial Code and Article 101(3) TFEU) which are based on a balancing of the restrictions of competition contained in an agreement against the efficiencies brought about by that agreement. While certain forms of cooperation between competitors are likely to meet the conditions for individual exemption, this will generally not be the case for cartels aimed at aligning prices or sharing markets.

In theory, certain categories of agreement or certain individual agreements may be exempted by decree (Article L. 420-4 II of the French Commercial Code). This option is rarely used in practice, particularly because of the risk of contradiction with EU law.

EU block exemption regulations (BERs) are directly applicable in France when the practice is also covered by EU law. Where this is not the case, the BERs are used by the French authorities and courts as an analysis guide.

French law also exempts from the prohibition on cartels practices which are the necessary consequence of a law or regulation adopted for its application (Article L. 420-4 I.1° of the French Commercial Code).

Criminal liability of individuals

French law imposes criminal penalties on individuals who have played a personal and decisive role in the design, organisation, or implementation of a cartel. Those persons are liable to 4 years’ imprisonment and a fine of €75,000 (Article L. 420-6 of the French Commercial Code).

French and EU law prohibit agreements whose object or effect is to restrict or distort competition. If an agreement has an anticompetitive ‘object’ (i.e. if the agreement itself reveals a sufficient degree of harm of competition), it will be punishable regardless of its actual effects.

A cartel between companies that are not established in France or the EU may be punished, regardless of where it is implemented, if it has the object or effect of restricting competition on French territory or within the internal market.

The applicability of EU law to anticompetitive conduct implemented outside the EU is justified if it is foreseeable (likely effects) that the conduct at issue will have an immediate and substantial effect in the EU (ECJ, 6-9-2017, case C413-14 P, Intel).

In France, cartels are mainly investigated by the French Competition Authority (Autorité de la concurrence – ADLC) or by the Directorate General for Competition of the Ministry of the Economy (DGCCRF).

The Ministry of the Economy informs the ADLC of investigations launched by the DGCCRF before they are initiated, and without delay after the conclusion of these investigations. The ADLC may then decide to take over the practices ex officio and resume the investigation.

If the ADLC does not take over the practices ex officio, the Minister for the Economy may himself impose sanctions for cartel practices not covered by EU law and implemented by companies whose turnover does not exceed EUR 50 million individually and EUR 200 million collectively (so-called “micro-PAC”).

Investigations may also be carried out by the criminal investigation courts if the individuals involved in the cartel are held criminally liable.

National courts (in particular commercial courts) have jurisdiction to declare anticompetitive agreements null and void or to award damages, without having to rely on a previous decision by the ADLC or the Minister for the Economy.

• Referral to the ADLC (Article L. 462-5 of the French Commercial Code)

In addition to its power of self-referral (ex officio) on the proposal of its General Rapporteur (Head of Prosecution), the ADLC may be seized of facts likely to constitute a cartel practice, in particular by:

• the Minister for the Economy,
• third-party companies with a sufficient interest to act,
• local and regional authorities, professional and trade union organisations, approved consumer associations and the Autorité de Régulation de la Communication Audiovisuelle et Numérique (Audiovisual and Digital Communication Regulatory Authority).

In cartel cases, the ADLC often opens cases ex officio following a leniency application from one of the cartel members.

• Competition investigation (Articles L. 450-1 et seq. of the French Commercial Code)

A cartel investigation can give rise to several types of investigation:

• a ‘simple’ investigation: used to request the production of documents required for the procedure, within a reasonable time, and to hear the company’s representatives or employees on site or when summoned,
• a ‘heavy’ investigation, carried out with judicial authorisation, at the request of the European Commission, the Minister for the Economy or the General Rapporteur of the ADLC. The ‘heavy’ investigation allows for dawn raids and seizures of evidence (also called ‘visit and seizure operations’). The fact that a simple investigation has initially been carried out does not prevent subsequent dawn raids and seizures from being carried out with judicial authorisation.
• more rarely, a criminal investigation ordered by an examining magistrate to seek evidence of a criminal offence against competition law. The powers of investigators acting in this context are different from those under the French Commercial Code.

In competition matters, as in criminal matters, the rule is that of “freedom of evidence”.

• Ordinary procedure before the ADLC (Articles L. 463-2 and R.463-11 et seq. of the French Commercial Code)

Hearings – The rapporteur in charge of the case conducts hearings, in particular to gather the observations of companies suspected of cartel practices on the evidence collected. The persons interviewed may be assisted by external counsel.

Statement of objections – The General Rapporteur notifies the objections to the parties involved, the plaintiff, the ministers concerned and the Government Commissioner (representative of the State). They may all consult the file (subject to protected business secrets) and have two months to submit their observations.

The accused companies are required to inform the ADLC without delay of any change in their legal situation that is likely to affect the conditions under which the objections may be imputed to them. They may not seek to escape liability if they have not provided such information in good time.

Final report – The General Rapporteur then issues a final report, except in case of a simplified procedure (Article L. 463-3 of the French Commercial Code), a leniency procedure or a settlement procedure. It contains an analysis of the objections notified in the light of the information in the file and the observations received. The parties have two months to submit a statement in response.

Hearings – The case is heard at a meeting of the ADLC’s College, during which it is submitted for judgment. The ADLC College generally hears the General Rapporteur, the Government Commissioner and the parties involved. The ADLC may also hear any person whose testimony it deems likely to contribute to its information.

Decision of the ADLC – At the end of the cartel proceedings, the ADLC may:

• order those concerned to put an end to the cartel,
• impose on them any structural or behavioural corrective measure proportionate to the infringement committed and necessary to effectively bring the infringement to an end,
• accept commitments. This possibility is theoretical, as the ADLC has indicated that it does not intend to accept commitments for cartel practices (ADLC Communication of 2 March 2009 on competition commitments),
• impose financial penalty, immediately or in the event of failure to comply with injunctions or undertakings,
• impose daily penalty payments,
• order publicity measures.

In the event of a ‘heavy’ investigation authorised by a national judge, the officers in charge of the investigation may:

• carry out dawn raids at all premises (business premises and homes), in the presence of the occupier of the premises or their representative,
• seize original documents and any data media and, where applicable, their means of decryption (held or accessible). In France, computer searches involve the entirety of hard disks or computer messaging systems,
• read the documents before they are seized,
• place seals on all commercial premises, documents and information media for the duration of the visit to these premises,
• during the visit, interview the occupier of the premises or his representative in order to obtain any information or explanations that may be useful for the purposes of the investigation,
• hear a person in respect of whom there are reasonable grounds for suspecting that he has committed or attempted to commit an offence.

An appeal may be lodged with the Court of Appeal within 10 days against either the court order authorising the ‘heavy’ investigation and/or the conduct of the search and seizure operations.

Following the ‘heavy’ investigation, the investigation generally continues in the form of a ‘simple’ investigation, in particular to request the production of additional documents or to interview company representatives about the documents seized. It is not possible to avoid these hearings, on the risk of being charged with the offence of opposing duty. However, the person interviewed has the right not to incriminate himself.

Whether in the field of advice or defence, consultations sent by a lawyer to or intended for his client and correspondence exchanged between the client and his lawyer are covered by professional secrecy (Article 66-5 of law no. 71-1130). This protection also applies to correspondence exchanged with a foreign lawyer (Paris Court of appeals, 8-11-2017, no. 14-13-384).

However, in competition cases, the Supreme Court has limited the exemption from seizure to lawyer-client correspondence relating to the exercise of the rights of the defence – including however correspondence that does not directly concern the investigation that gave rise to the seizure (Cour de cassation, 25-11-2020, no. 19-84.304; Cour de cassation, 20-01-2021, no. 19-84.292).

The confidentiality of lawyer-client correspondence also covers documents internal to the company searched, the essential purpose of which is to transcribe the confidential data contained in the correspondence sent by the lawyer and covered by confidentiality (Supreme Court, 26-01-2022, No. 17-87.359). Apart from this hypothesis, the in-house lawyer’s internal correspondence is not covered by legal privilege.

Cases of full immunity from financial penalties are known as “type 1 cases” (Article R. 464-5-1 of the French Commercial Code and ADLC Communication of 15 December 2023 on the French leniency programme).

Full immunity is granted when the following cumulative conditions are met:

• The company applying for leniency discloses its participation in the cartel;
• It satisfies the conditions for cooperation laid down by law (Article R. 464-5-4 of the French Commercial Code). These conditions are detailed in Question 3.4;
• It is the first to provide the ADLC with sufficient information to enable it to:
  • carry out dawn raids, for example by making it possible to identify the places, dates and purpose of contacts or meetings between cartel participants (type 1A case). This is the case where, at the time the request is received, dawn raids or criminal searches have not already been carried out, provided that neither the DGCCRF nor the ADLC already have in their possession sufficient information to enable such dawn raids or criminal searches to be carried out;
  • establish the existence of the cartel, provided that no other company has already benefited from a type 1A exemption. This is the case where neither the DGCCRF nor the ADLC already have in their possession sufficient information to establish the existence of the cartel (type 1B case).

An undertaking that has taken measures to force other undertakings to participate or continue to participate in the cartel is excluded from the benefit of the full immunity.

Cases of partial exemption from fines are known as “type 2 cases” (Article R.464-5-2 of the French Commercial Code and the ADLC Communication of 15 December 2023 on the French leniency programme).

Partial exemption from fines is granted when the following cumulative conditions are met:

• The company applying for leniency discloses its participation in the cartel;
• It satisfies the conditions for cooperation laid down by law (Article R. 464-5-4 of the French Commercial Code). These conditions are detailed in Question 3.4;
• It provides information that has significant added value in establishing the existence of the cartel, compared to that already in the possession of the DGCCRF or the ADLC.

The reduction in the penalty granted in the case of a type 2 partial exemption may not exceed 50% of the amount of the penalty. Penalty reduction ranges are provided for depending on the order in which the applications are received:

• first company to provide significant added value: reduction of between 25 and 50%;
• second company to provide significant added value: reduction of between 15 and 40%;
• other company providing significant added value: maximum reduction of 25%.

Yes. The company may request that it be granted a period of time, during which its application will remain in the order in which it was received, to enable it to gather information in support of its application. In principle, the period granted is one month. An extension may be granted on a case-by-case basis.

In addition to the conditions set out under Questions 3.1 and 3.2, the immunity/leniency applicant is required to meet the cumulative cooperation conditions set by law (Article R. 464-5-4 of the French Commercial Code):

• terminate its participation in the cartel, except for what would, in the opinion of the ADLC, be reasonably necessary to preserve the integrity of the investigation;
• provide the ADLC with full, permanent and prompt cooperation as soon as its request is filed and throughout the investigation and enquiry procedure. This implies in particular making its current legal representatives and employees available to the ADLC, as well as making reasonable efforts to do the same with its former legal representatives and employees.
• Not to have, prior to the leniency application, destroyed or falsified evidence of the cartel, nor to have disclosed its intention to make an application or the substance thereof, except to other competition authorities.

In order to encourage leniency applications, directors, managers and other members of staff of the company who incur criminal liability are exempt from penalties if the company has benefited from a full immunity from fines under the leniency procedure and if they have personally actively cooperated with the ADLC and the public prosecutor (Article L. 420-6-1 of the French Commercial Code).

Exemption from punishment is not granted to directors, managers and other members of staff if the undertaking’s application for leniency is made after the initiation of administrative or judicial proceedings relating to their participation in a cartel.

France does not have an ‘amnesty plus’ programme. A company’s eligibility for leniency is assessed on a market-by-market basis, depending on its rank in the proceedings and the extent of its cooperation.

On the other hand, if a type 2 leniency applicant is the first to provide decisive information enabling the ADLC to establish additional factual elements leading to an increase in the financial penalties imposed on the cartel members, the ADLC does not take this into account when determining the amount of the penalty imposed on the applicant that provided this information.

The commitment procedure, under which the ADLC accepts commitments from companies to put an end to its competition concerns (Article L. 464-2 I of the French Commercial Code), is not applied in cartel cases, as the ADLC considers that the infringement of economic public policy requires the imposition of financial penalties.

However, a settlement procedure may be implemented in this type of case after the statement of objections has been served (Article L. 464-2 III of the French Commercial Code, ADLC Communication of 21 December 2018 on the settlement procedure). The undertaking requesting a settlement must waive its right to contest the objections, their qualification and their imputability, in an unambiguous statement recorded in official minutes. Implementation of the settlement also implies the cessation of the sanctioned practice.

If the company wishes to propose behavioural or structural commitments in addition to waiving its right to contest the objections, its request for a settlement must state this and be accompanied by the information necessary to enable the ADLC to assess the substantial, credible and verifiable nature of these proposals.

When the conditions for a settlement are met, and if the General Rapporteur of the ADLC considers it appropriate, he submits a settlement proposal to the undertaking in the form of a fine range, which is not predetermined but depends on the facts of each case. The final penalty is imposed by the ADLC College, without the need for approval by a judge.

The ADLC prefers to use the settlement procedure in cases in which all the accused companies settle. This is the only way that the ADLC can dispense with producing a final report (the second stage of the written adversarial procedure after the statement of objections has been sent).

The settlement procedure may be combined with the leniency procedure. It may be proposed by the General Rapporteur of the ADLC, if he deems it appropriate, in particular with regard to the behaviour of the undertaking having obtained the conditional benefit of the leniency procedure and the objective of simplifying and accelerating the procedures.

The maximum amount of reduction that can be obtained is not determined by the Commercial Code, but the benefit that results for an undertaking from the implementation of a settlement procedure cannot be equivalent to the benefit of a total or partial exemption from penalties granted under leniency (ADLC Communication of 21 December 2018 relating to the settlement procedure).

The settlement procedure is confidential. Settlement materials are not included in the investigation file, whether the settlement procedure is successful or not. If the procedure is successful, the settlement official minutes signed by the company may not be disclosed to the other parties to the procedure or to third parties (ADLC Communication of 21 December 2018 on the settlement procedure).

The main advantage of settlement is a reduction in the fine, which may come in addition to a partial exoneration as a result of a leniency procedure. Since the procedure is simplified, the company that has settled saves on its procedural costs and on the indirect costs associated with mobilising internal teams to defend the case. Finally, the fact that it has settled can be highlighted in its communications when the ADLC’s decision is announced.

However, the French settlement procedure is open to a number of criticisms:

• The company must acknowledge the facts, and the content of the settlement is highly constrained by the findings of the investigation team on the facts, their qualification or their imputability as established in the statement of objections.
• This recognition facilitates claims for damages by third parties, even though settlement materials are not disclosable to third parties.
• The range of penalties proposed by the General Rapporteur may be wide, which does not make the amount of the fine much more certain.
• An appeal cannot call into question the acknowledgement of the facts recorded in the settlement official report. The only thing that can be challenged on appeal is the amount of the penalty imposed by the ADLC College, even if it falls within the range initially proposed, and the regularity of the procedure.

EU law organises cooperation between the European Commission and the national competition authorities (NCAs) of the Member States (Regulation 1/2003 and the 2004 Commission Communication on cooperation within the ECN).

A cartel case is likely to be dealt with by several NCAs in parallel, in particular when the intervention of a single NCA would be insufficient to put an end to the entire infringement or to sanction it appropriately. The European Commission will be competent to deal with a cartel case mainly when the cartel affects competition in more than three Member States or when a new competition problem arises that requires uniform treatment within the EU.

Regulation 1/2003 has created the European Competition Network (ECN), which enables NCAs and the European Commission to:

• inform each other of new cases likely to affect trade between Member States;
• coordinate and assist each other in investigations and exchange information on open cases. This allows the ADLC to request assistance from other EU NCAs during dawn raids outside France. It can also carry out dawn raids in France on behalf of another NCA or the European Commission;
• to provide each other with information and to use as evidence of a cartel any element of law or fact, including confidential information collected by the Commission or another NCA for the same purpose;
• ensure the coherence of European competition policy. This is all the more important as all NCAs are directly competent to implement European competition law (Articles 101 and 102 TFEU).

The ECN+ Directive of 2019, transposed into French law in 2021, has further strengthened European cooperation between national competition authorities (mutual information obligations between NCAs, extension of assistance between authorities for dawn raids, notification of procedural acts and recovery of penalties).

With regard to leniency, the ADLC accepts that a company that has applied for full imminuity/leniency to the European Commission may submit only a summary application.

There are administrative, civil and criminal penalties.

• Administrative penalties: injunctions and fines (Article L. 464-2 of the French Commercial Code)

The ADLC may order the parties concerned to put an end to the cartel, or impose on them any corrective measure of a structural or behavioural nature proportionate to the infringement committed and necessary to effectively bring the infringement to an end.

Companies that take part in a cartel face fines of up to 10% of the worldwide turnover of the group to which they belong.

The maximum amount of the fine for an association of undertakings is 10% of its worldwide turnover. Where the infringement by an association of undertakings relates to the activities of its members, the maximum amount of the fine is 10% of the sum of the worldwide turnover of each member active on the market affected by the association’s infringement.

• Civil penalty: nullity (Article L. 420-3 of the French Commercial Code)

Any undertaking, agreement or contractual clause relating to a cartel practice is null and void. Only a judge can declare this nullity. The ADLC has no jurisdiction to do so.

• Criminal penalties: criminal liability of individuals (Article L. 420-6 of the French Commercial Code)

French law imposes criminal penalties on individuals who have played a personal and decisive role in the conception, organisation, or implementation of a cartel. Those persons are liable to 4 years’ imprisonment and a fine of €75,000.

Financial penalties are assessed in the light of the seriousness and duration of the infringement, the situation of the company sanctioned or the group to which the company belongs, and the possible repetition of anticompetitive practices. They are determined individually for each company sanctioned and reasons are given for each sanction.

The ADLC may decide to reduce the amount of the financial penalty imposed on a company if, during the proceedings, it has paid compensation to the victim of the cartel in execution of a private settlement.

There is a rebuttable presumption that a subsidiary, whose capital is wholly or almost wholly owned by its parent company, does not autonomously determine its conduct on the market and forms a single undertaking with the parent company. Consequently, the parent company is held jointly and severally liable for the commission of the infringement and is jointly and severally liable for the payment of the fine, unless it demonstrates, based in particular on the economic, legal and organisational links it has with its subsidiary, that they do not constitute the same economic entity (Cour de cassation, 18-10-2017, case no. 16.19-120).

Actions for damages in competition matters have benefited from a special regime since the transposition into French law of European Directive 2014/104/EU (Articles L.481-1 et seq. of the French Commercial Code). The regime applies to both individual actions and group actions brought by approved consumer associations.

Both national and European cartels are covered by the regime. There is no centralised private action at EU level and it is up to the national courts of the Member States to rule on claims for damages arising from a cartel.

The rules of evidence are simplified for natural or legal persons who have suffered damage as a result of the cartel:

• Any cartel practice found and attributed to a person by a decision of the ADLC or an appeal court that has become final on this point is presumed to have been irrefutably established against that person. This also applies to practices that have been the subject of a leniency or settlement.
• On the other hand, an equivalent decision by an NCA or a court in another Member State is merely evidence of the practice and does not create an irrebuttable presumption of competitive misconduct. The same does not apply to final decisions of the European Commission, whose findings on the existence of a cartel and its attribution are binding on French courts.
• With regard to cartels, the law also establishes a rebuttable presumption of actual damage, in order to facilitate compensation for victims (Article L. 481-7 of the French Commercial Code). This is supplemented by a rebuttable presumption that the extra costs incurred by a supplier or direct or indirect customer as a result of the cartel have not been passed on to its own direct co-contractors.

French antitrust damages regime also grants special access to evidence held by the ADLC, which takes account of business confidentiality and seeks to preserve the effectiveness of alternative procedures (leniency, settlement).

The Commercial Code sets out a non-exhaustive list of losses that can be compensated (Article L.481-3):

• the loss resulting from the additional cost of the cartel, provided that it is not passed on to a subsequent direct contractor;
• the lost profit resulting in particular from the reduction in sales volume linked to the partial or total passing on of the additional cost;
• loss of chance;
• moral damage.

Decisions of the ADLC can be appealed only before the Paris Court of Appeals on their merits.

Decisions of the Paris Court of Appeals can be appealed before the Supreme Court (Cour de cassation) solely on grounds of law, including by the ADLC itself or by the Minister for the Economy.

The ADLC decisions may be appealed within one month to the Paris Court of Appeal (L.464-8 of the French Commercial Code).

An appeal may also be lodged against a decision to impose interim measures, but only within ten days of its notification. In such case, the Paris Court of Appeal must rule on the appeal within one month (Article L. 464-7 of the French Commercial Code).

In both cases, the appeal does not have suspensive effect. The companies concerned must comply with the ADLC’s decision, unless they obtain a stay of execution from the First President of the Paris Court of Appeal, if he considers that the decision entails excessive consequences or if new facts have come to light.

The judgment of the Court of Appeal may be appealed on grounds of law to the Supreme Court (Cour de cassation) within one month of its notification. The appeal does not have suspensive effect.

The ADLC is usually fairly active in sanctioning cartels. This has been comparatively less the case since the beginning of 2023.

The Autorité de la concurrence has fined several professional bodies and eleven companies, prosecuted as members of these bodies, for implementing a collective strategy aimed at preventing manufacturers from competing on the issue of the presence or absence of bisphenol A in food containers (tins, cans, etc.). The cumulative amount of the penalties has nearly been EUR 20 million (ADLC, Decision no. 23-D-15 of 29 December 2023).

The ADLC sanctioned a cartel between six companies active in the nuclear waste sector, in the context of invitations to tender issued by the French Atomic Energy Commission (CEA), for an amount of more than EUR 31 million (ADLC, Decision no. 23-D-08 of 7 September 2023). In general, the ADLC is very active in sanctioning cartel practices affecting public procurement.

Recent decisions by the ADLC have focused on vertical agreements (Montres Rolex, Thés Mariage Frères, Chocolats de Neuville) or abuse of a dominant position (Sony). The Rolex case resulted in a penalty of more than EUR 91 million.

However, a number of sectors have recently been subjected to dawn raids (medical biology, graphic cards, production and distribution of consumer goods, distribution of electrical cables, rail transport and digital mobility tools) which could lead to sanctions in the future.

Labour markets seem to be a new field for competition law enforcement. At the end of 2023, the ADLC reported that it had sent a statement of objections to companies in the engineering, technology consulting and IT services sectors for having concluded and implemented “no-hire” agreements, aimed at prohibiting each other from soliciting and hiring their respective staff.

The ADLC has just updated its Communication relating to the French leniency programme (ADLC Communication of 15 December 2023) to take account of changes linked to the transposition of the ECN+ Directive (Directive (EU) 2019/1 of 11 December 2018, known as “ECN+”).

For 2024 and 2025, the ADLC has announced that its main objectives will be the competitive operation of digital markets, the integration of sustainability into competition law and policy, and the protection of purchasing power.

With regard to digital markets, the ADLC intends to play an active role in implementing the Digital Markets Act (DMA) alongside the European Commission. As a reminder, the obligations of the DMA will apply from 6 March 2024 to gatekeepers and essential platform services designated by the European Commission. The Commission has already initiated several proceedings against gatekeepers. The ADLC will also remain very active in the ex-post prosecution of anticompetitive practices by digital players.

In terms of purchasing power, the ADLC will be looking at consumer goods, transport, energy and overseas territories.