On 21 December 2017, the French Competition Authority ("FCA") applied for the first time Article L.464-2 V of the French Code of Commerce allowing for the imposition of fines in cases of procedural obstruction. It, subsequently, fined Brenntag € 30 million for obstructing an on-going investigation.
Brenntag is a German chemicals distributor that has been the subject of various complaints filed by its competitors on the French market, such as Gaches, Solvadis and Chimiphar. These competitors argued that Brenntag was involved in various anticompetitive practices (e.g., predatory pricing, horizontal agreements, and pressure on suppliers not to deal with Brenntag's competitors). Following these complaints, the FCA opened several proceedings, some of which have already led to the imposition of fines.
However, the FCA has not yet been able to conclude its investigation into unilateral and vertical practices (i.e., predatory pricing and exclusive dealing) due to, according to the FCA, Brenntag's conduct. The FCA noted that Brenntag provided incomplete and insufficiently precise information in response to requests for information, often with a one- or two-year delay. Brenntag also refused to communicate decisive elements required by the FCA to assess the functioning of the market despite the additional extensions of time granted (e.g., accounting extracts, invoices, explanation of methodology used to compute data, etc.).
In response, Brenntag counter-argued that the FCA's requests for information were disproportionate and unreasonable. It further stated that certain information was unavailable and that, in any case, the legal criterion for an obstruction required evidence of an intentional element. In its decision dated 21 December 2017, the FCA rejected these arguments. It emphasised that the requests for information only included detailed non self-incriminating questions, underlined the obligation on Brenntag to actively cooperate with the FCA, and affirmed that obstruction could be the result of negligence without the need to prove any intentional element.
In order to calculate the amount of the fine, the FCA relied on the maximum ceiling of 1% of the world annual turnover, as stated in Article L.464-2 V of the French Code of Commerce and under EU competition law (i.e., Recitals 23 and 29 and Articles 18 and 23 of Regulation 1/2003). The FCA also pointed to the "particular gravity" of the obstructive behaviour that rendered impossible the adoption of any decision on the alleged practices, especially because the FCA was unable to determine whether Brenntag had a market share above 50%. Further, the FCA took into account the annual turnover of the Brenntag group (i.e., Brenntag AG and its 99.4%-owned subsidiary Brenntag SA) to ensure a sufficient deterrent effect. Finally, noting that the annual worldwide turnover of the Brenntag group was € 10.3 billion, the FCA imposed a fine of € 30 million for which Brenntag AG and Brenntag SA were found jointly and severally liable.
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