On October 14, the French Competition Authority (FCA) launched a two-month public consultation for guidelines on settlement and compliance programs. Both these guidelines have been highly anticipated since they were first announced last May.
The draft settlement guidelines contain details on the FCA’s approach and decisional practices which were developed under the control of the French courts. Among the guidelines, the FCA determined that settlement is possible in all cases where infringement on competition law has taken place, including cartels, vertical restraints and single firm conduct. In the event of infringement, settlement becomes an option only after the parties have been formally charged. Once parties fully acknowledge their participation in anticompetitive conduct, the casehandler in charge of the matter would decide whether to respond positively to their request for a settlement. Parties retain the same procedural rights that they would in an ordinary procedure; in particular, they would be granted access to file. The FCA would reward parties who wish to settle with a fine reduction of 10 percent. In contrast to the settlement procedure of the European Commission (EC), it would not be possible to cumulate both a settlement reduction and a leniency reduction. However, parties settling with the FCA may decide to adopt behavioral or structural remedies which would enable them to benefit from an additional reduction of 5-15 percent. With regard to cartels, parties would benefit from a reduction up to 10 percent if they commit to changing their behavior in the future, in particular, by implementing a compliance program.
The draft guidelines elaborate further on the benefits of implementing a compliance program. The FCA clarifies several instances in which a compliance program would enable a party to benefit from a reduction of its fine. In the course of ordinary proceedings resulting in the imposition of a fine, the existence of a compliance program or the lack of it would not act as an attenuating or an aggravating circumstance. However, in the case of a settlement procedure, the commitment to implement a compliance program would be considered a commitment by the company to change its behavior in the future and would, thus, enable the party to benefit from a reduction of its fine. In this sense, the FCA and the EC agree that implementing compliance program would not have a significant effect on a fine that is set outside of a settlement procedure. The FCA only differs with respect to the specific context of a settlement procedure.
A fine reduction of up to 10 percent may not be easy to obtain. A compliance program would only be considered by the FCA if it includes the following characteristics: (i) the company’s top executives are strongly committed to the program, (ii) the company has designated persons to oversee the program and take charge of its implementation, (iii) the company has taken effective measures to implement information, training and awareness programs, (iv) the company employs effective control, audit and alert mechanisms and (v) the company has an effective monitoring mechanism. These requirements are prerequisites without which parties would not be able to claim a reduction of their fine on the basis of their foreseen compliance program. Please note, however, that satisfying these prerequisites is not necessarily enough to obtain a reduction of their fine.
Some may argue that a 10 percent reduction would not be enough to encourage companies to spend time and resources implementing compliance programs. However, the FCA’s vision is that such programs would enable companies to detect cartels more easily in the future and, thus, be the first in line to apply for leniency.
It remains to be seen whether these two sets of guidelines will be adopted at the end of the public consultation. If adopted, they could become useful tools for French competition lawyers and provide incentives for companies to implement compliance programs..
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Italy’s new Prime Minister, Mario Monti, has named the members of his new cabinet, which will start to work on economic reforms next week, once the Italian Parliament has passed its final vote of confidence on Monti.
All the new cabinet members are high profile individuals from academia, industry and the public sector, none are politicians or affiliated with any political party.
Antonio Catricalà, current Chairman of the Italian Competition Authority, was named under-secretary to the Prime Minister’s office and Secretary of the Council of Ministers. There are a number of potential candidates to take Catricalà’s role at the Italian Competition Authority, including Lorenzo Bini Smaghi (former member of the ECB’s Executive Board) Luigi Fiorentino (current Secretary General of the Italian Competition Authority) and Pasquale de Lise (current President of the Council of State, the higher court for administrative cases in Italy).
In addition to Catricalà, with whom McDermott Italian lawyers have worked on many antitrust cases before the Italian Competition Authority, we have also crossed paths with other members of Monti’s new cabinet including Corrado Passera, the current CEO of Intesa-San Paolo, who has been appointed as head of the newly-formed Ministry of Economic Development, Infrastructure and Transport; Elsa Fornero, also a board member of Intesa-San Paolo, who has been named head of the Ministry of Welfare and Francesco Profumo, the current President of the Politecnico University in Turin, who has been named head of the Ministry of Education.