New FCA guidelines on fines: minor changes that could lead to higher fines

By Thomas Oster, Eliott Costet

10-2021

The French Competition Authority (FCA) recently published an updated version of its guidelines on the method for the assessment of fines (the “New Guidelines”) replacing the previous guidelines adopted in 2011. This new version takes into account the FCA’s decisional practice over the last 10 years as well as the changes resulting from the transposition of the ECN+ Directive in May 2021. These new guidelines further harmonise the method for calculating fines amongst European Competition authorities. In spite of not significantly changing the basics of the rules previously in force, there are some notable developments that could lead in practice to higher antitrust fines.

Before the application of the New Guidelines, the fine was calculated by applying a percentage to the value of sales of products concerned by the infringement taking into account the seriousness of the infringement and the damage to the economy. This amount was then adjusted based on the duration of the involvement of the party in the practices and its individual situation.

The transposition of the ECN+ Directive into French law led to the abandonment of the criterion of the damage to the economy, which was a French specificity, for the assessment of the amount of the fine. This criterion is therefore no longer referred to in the New Guidelines.

The most impactful change brought about by the New Guidelines is the change in the application of the duration multiplier. Indeed, although the FCA previously applied a duration coefficient of 0.5 per year of infringement following the first full year, it will now apply a coefficient of 1. The FCA is aligning its practice with that of the European Commission but this will lead to a mechanical increase in the amounts of fines.

The New Guidelines, in line with the practice of the European Commission, also aim to punish horizontal cartels and abuses of dominant position more severely, therefore the FCA will have the possibility to add to the basic amount of the fine a percentage of 15% to 25% of the value of sales related to the infringement, thereby further discouraging companies from participating in such practices.

Finally, the New Guidelines take into account the change resulting from the implementation of the ECN+ Directive regarding fines that may be imposed on professional bodies which may now reach 10% of their turnover or 10% of the aggregate worldwide turnover of each of their members active in the market affected by the association's infringement, where such infringement relates to the activities of its members. Previously, the maximum amount of fine that the FCA could impose on an association was €3 million. Given this increased fine exposure, the FCA had published earlier this year a dedicated study for professional bodies.

The FCA’s press release is available here (in English) and the New Guidelines here (in French).

For more information contact Thomas Oster and Eliott Costet.

 
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