Cour de cassation, France2004 – 2007

Recent developments in competition case-law

ACLE, Amsterdam, 11 April 2008

Jacqueline Riffault-Silk Judge, Commercial Chamber

* French Judiciary in charge of reviewing Competition Council’s decisions since 1986

* Regulation, main source of competition case-law, and a powerful incentive for private actions

* French Supreme Court decisions in competition law : rarety, continuity and openness

IntroductionMain features of French structures

Openness : the articulation between EU & domestic procedure in competition matters, and between regulation and negotiated measures

Part One : Questions of procedure, continuity and openness

Continuity : the divide between judicial and administrative competence, the organisation of the proceedings, the rights of the defence

* Determining the relevant market* Qualifying the practices* Defining the responsible entity* Assessing the sanctions

Part 2 : Substantive Law, Under the Rationale of Economics

Questions of procedure (1)

NCA controls the activities of public bodies when of economic nature (production, distribution, services), unless exercised with State powers or in the general interest (Trib. Conflits, 18 Oct. 1999, Paris Airports v. TAT)(Com. 19 Apr 2005, Desoeuvre, non detachable acts)(Com. 6 Feb 2007, The Oliver Tree Company),(Com. 14 March 2006, Privileg Company & al, detachable acts)

1 – Division of the competence between administrative courts and the judiciary

Questions of procedure (2)

Art. L 462-7 com : time limitations of 3 years now 5 years (Ord. 4 Nov 2004)Interruptive effect on all interested parties of appeals made by any of them against search and visit decisions

Com. 7 March 2006, Estuary Motorway construction

2 – Prescription (time limitations) and « saisine in rem »

Questions of procedure (3)

Guaranties modelled on criminal procedures(Art. 6 ECHR, Art. 14 UN Pact for Civil Rights, French Constitutional Council, 30 Dec. 1987)

Com. 23 June 2004, « Banks » case Com. 22 Feb 2005, Socarel Cy & al.Com. 13 July 2004, Normandy Bridge constructionCom. 29 June 2007, SFR & al.

3 – Rights of the Defence

Questions of procedure (4)

Art. 561 CPC gives full jurisdiction to the CA→in comp. matters, CA reviews the case on the facts and on the law→when quashing an NCA decision, it must retake the case.

Com. 30 May 2000, Canal Plus, Com. 4 Dec 2001, France TelecomCom. 27 Sept 2005, Beton Travaux Cy (cassation)Com. 31 Jan 2006, Colas Mediterranee (cassation)

4 – Appeals

Questions of procedure (5)

Reg. 1/2003, art. 16 : the national courts may suspend the proceedings when the same case is pending before the CommissionCom. 17 Jan 2006, Spea v/ Peugeot SAInterim measures (L.464-1 com): what rules to be applied when art. 81 & 82 EC are applicable ? ECJ 17/1/90, Camera care;TPICE 24/1/92, La Cinq; a. 8 Reg.1/03Com. 14 Dec 2004, Pharma Lab; 8 Nov 2005, Neuf Telecom:cass Com. 28 Jan 2005, Orange Caraïbes (reasonable presumption)…but another possibility lies in negotiated procedures (NMPP)

5 – Cooperation v/ procedural autonomy

Questions of procedure (6)

Specificity of the transaction procedure, which differs from the civil one (art. 2044 civ).→ NCA not bound by the proposal of the Rapporteur general→ no cumulative reductions (transaction and simplified procedure (art. 464-2-III & L. 464-5 com)

Com. 22 Nov 2005, CalculatorsCom. Opinion, 11 Jul 2005; Com. 28 Nov 2006

6 – Negotiated procedures

Part Two - Substantive Law, Under the Rationale of Economics

The extent of the control exercised by the Cour de Cassation :

Checks correct application of the law and the motivation of appealed decisions (legal basis), in which law and economics are complementary

Substantive Law and the Economics (1)

Court of Appeal may review the analysis of NCA and substitute another motivationFactual analysis, bound by economic doctrine and the principle of legal certainty

Com. 28 June 2005, Novartis PharmaCom. 6 Dec 2005, Roquefort cheese market

1 - Determining the relevant market

Substantive Law and the Economics (2)

* Abuse of dominant position : squeeze prices on mobile telephone market by integrated dominant operators, followed by agreements with their international counterparts to bill their competitors for international rerouting, characterize ACP, regardless of any other possibility for the competitors to avoid this blockage

Com. 10 May 2006, Etna association

2 - Qualifying the anticompetitive object/effect of anti-competitive practices ACP

Substantive Law and the Economics (3)

* Implicit agreements in oligopolistic markets : retrospective non-public information on their activity, exchanged by operators on regular basis, is not sufficient per se to assess an adequate reduction of their commercial autonomy and consequently characterize ACP

Com. 29 June 2007, Bouygues Telecom & al.Comp. ECJ, 28 May 1998, John Deere Ltd v Commission

Substantive Law and the Economics (4)

Principles of economic and functional continuity of the enterprise where ACP were enacted ECJ, 8 Jul 1999, Enichem Anic Spa→ in the case of a merger, the absorbing company responds for ACP enacted in the absorbed one, Com. 28 Jan 2003, Domoservices maintenance→regardless any agreement excluding such a transfer, provided all the activities have been transferredCom. 28 Feb 2006, EFS; Com. 22 Feb 2005, Socarel

3 - Defining the responsible entity

Substantive Law and the Economics (5)

Fines up to 10 % worldwide turnover of the firm3 principles : motivation, proportionality, individualisation (+ reiteration since L. NER 15 May 2001)→seriousness of the ACP, harm to the economy (duration of ACP, structural and conjonctural effects, size of the market), →personal situation of the firm (size and financial position, power of influence …)All these elements must be assessed with reference to the caseCom. 23 Apr 2003, Interflora; 14 March 2006, France TelecomCom. 6 March 2007, Estuary Motorway construction

4 – Assessing the sanction (art. L. 464-2 com)

CONCLUSION

Interaction of domestic and european rules

Harmonisation enhanced by Reg. 1/2003

Richness of Competition Law, core of EU construction and State Members development