France: Competition Newsletter June 2019

Last Updated: 26 June 2019
Article by Emmanuelle van den Broucke and Alexia Delaunay

The European Commission fines AB InBev €200 million for restricting cross-border sales

On May 13, 2019, the Commission fined Anheuser-Busch InBev NV/SA ("AB InBev"), a Belgian beer company, nearly €200 million for abuse of its dominant position between 2009 and 2016 on the Belgian beer market by hindering the cross-border sales of its beer (Jupiler). However, AB InBev benefited from a 15% fine reduction in return for its cooperation with the Commission when it expressly admitted the facts and the offense and proposed a remedy.

In its decision, the Commission first noted that AB InBev holds a high market share and has the ability to increase prices independently from other beer manufacturers. The Commission also noted the existence of significant barriers to entry and limited buyer power of retailers. It thus concluded that AB InBev held a dominant position on the Belgian beer market.

The Commission then noted that AB InBev had abused its dominant position by applying a deliberate strategy consisting of restricting the parallel trade of its beers from countries where they are sold cheaper, such as the Netherlands or France, to the Belgian market, where they are sold for a higher price, the aim being to maintain higher prices in Belgium.

For these purposes, AB InBev used four processes. It (i) changed the packaging of some products to make it harder to sell them in Belgium (notably by removing the French version of the mandatory information on the label when labelling in both languages is mandatory in Belgium); (ii) limited the volume supplied to a wholesaler in the Netherlands; (iii) refused to sell some products to a Dutch retailer unless it agreed to limit its imports to Belgium; and (iv) prohibited another retailer from applying the same promotions to its clients in Belgium as in the Netherlands.

The Commission therefore concluded that AB InBev had abused its dominant position by depriving European consumers of the benefits of the single market: namely the possibility to have more choice and to get a better deal. It made AB InBev's commitment, consisting of offering its products in France and the Netherlands with double labelling in French and Dutch with respect to the mandatory information, binding for the next five years.

This decision adds to recent cases where the Commission sanctioned sales restriction practices on cross-border sales, such as the Guess decision of January 25, 2019

The CJEU confirmed the imposition of two sanctions for the same practice on the grounds of national and European competition laws

In a preliminary ruling dated April 3, 2019, the Court of Justice of the European Union ("CJEU") concluded that a national competition authority could impose on a company two separate fines for the same offense.

In this case, the Polish Competition Authority had imposed two fines on a Polish insurance company for abuse of a dominant position: one on the grounds of national law and the other on the grounds of European law.

The doubly fined company objected to this cumulation of penalties, considering that it was contrary to the ne bis in idem principle.

However, according to the CJEU, this principle does not apply when a national competition authority bases its ruling, in the same decision, on national law and European law, provided the fines are proportionate to the nature of the offense.

The French Competition Authority hands down its first sanction decision for obstruction during a dawn raid

On May 22, 2019, the French Competition Authority adopted a decision whereby it sanctioned obstructions during a dawn raid on the grounds of Article L464-2 of the French Commercial Code.

In November 2018, the Authority carried out dawn raids in the sectors of engineering and technology consulting, IT services and software publishing, in particular, in the premises of two companies of the Akka Technologies group. During these dawn raids, two incidents were observed consisting, on the one hand, of a breach of seals, and on the other hand, of the alteration of the receipt of emails by employees.

In its defense, Akka, which did not dispute the facts, raised a series of arguments to contest the application of Article L464-2 of the French Commercial Code.

In response, the Authority first argued that the French Commercial Code gave a sufficiently precise definition of the offense in respect of the obligations relating to the definition of administrative sanctions and that the list of offenses referred to was not exhaustive. The Authority further recalled that it was an objective offense that did not require in any way the demonstration of an intentional element. Finally, the Authority referred to the French Constitutional Council's decision of July 8, 2016 that validated an administrative fine imposed by the Authority for obstruction, whereas these facts could also be the subject of a criminal sanction. This refers to the Brenntag decision in which the latter was fined €30 million in 2017 for withholding information in the context of a request for information.

The Authority pointed out in its decision that compliance by the visited companies with the provisions on obstruction is of critical importance to guarantee the effectiveness of its powers of inquiry, investigation and prosecution. Therefore, it tried to set a sufficiently deterrent fine given the seriousness of the offenses. Accordingly, taking into account the financial penalty cap of 1% of the turnover defined by Article L464-4 of the French Commercial Code, the Authority imposed a fine of €900,000 jointly and severally on all the companies of the group.

However, this procedure remains autonomous and independent from the investigation of the merits, which alone will establish the guilt or innocence of the group with respect to the alleged practices that led to conducting the dawn raid.

The Authority thus has its first sanction decision for obstruction during a dawn raid, following on from the decisions already handed down by the European Commission for a breach of seals in the cases of E.ON Energie in 2008 (€38 million) and Suez Environnement in 2011 (€8 million), and for alteration of the receipt of emails in the case EP Investment Advisors in 2012 (€2.5 million).

The French Competition Authority launches a thematic study on trade union and professional bodies

On May 28, 2019, the Authority announced the launch of a thematic study on trade union and professional bodies. This study follows on from the publication on January 14, 2019, of the European Directive ECN+ that raised the upper limit of the fine for trade union and professional bodies in case of anticompetitive practice to 10% of the sum of the member companies' turnover (compared to €3 million before).

Given this increase in sanctions, this study aims to heighten the trade union and professional bodies' awareness of competition law, since they may be acting as cartel's facilitators between their members.

The interested stakeholders have until October 15, 2019 to send their contribution to the Authority and the study should be published in the second quarter of 2020.

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