15 October 2015

French Constitutional Council rules that two French antitrust provisions are constitutional

On 14 October 2015, the French Constitutional Council (the Council) published its decision on two priority issues of constitutionality (the QPC) raised by two French millers (Grands Moulins de Strasbourg and Axiane Meunerie) regarding the French Competition Council’s (the former French Competition Authority, FCA) power of self-referral and the financial penalty cap calculation method.

The millers were fined by the FCA in 2012 in the “Flour” cartel case and again in 2014 following a Paris Court of Appeal decision. In the course of their appeal before the French Supreme Court, the millers raised that there were shortcomings in antitrust provisions which failed to protect their constitutional rights. The French Supreme Court agreed to refer the QPC to the Council in July 2015, ruling that these questions were serious.

The millers challenged:

  1. the FCA’s power to launch investigations against certain anticompetitive practices on its own initiative; and
  2. provisions setting the upper limit of the fines.

Grands Moulins de Strasbourg and Axiane Meunerie argued that the FCA’s power of self-referral breached the principles of independence and impartiality. The Council decided in 2012 that the FCA’s powers in place since the 2008 reform were constitutional, and the millers emphasised the difference between the system prior to and after 2008 to underline the unconstitutionality of the pre-2008 provisions.

Regarding the fines, the millers first argued that the provision setting the fine cap at “10 percent of the annual worldwide turnover before taxes chosen in the period between the year before the cartel started and the last complete year before the decision” neglected the principle of proportionality. Secondly, they challenged the possibility for the FCA to take into account the consolidated or combined turnover of the infringing company with its group, claiming it was violating the principle of individualisation of the sanction.

According to the Council:

  1. the powers of the FCA to investigate and to penalise, in place before 2008, were kept sufficiently separate from each other for the FCA to remain independent and impartial; and 
  2. the provisions on setting the upper limit of the fines were not manifestly disproportionate, were made to ensure that companies do not artificially ensure a smaller amount of fine, and were aimed at taking into account the size and the financial capacity of a company within a group.

Therefore, the Council ruled both provisions were constitutional.

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