by Lionel Lesur and Louise-Astrid Aberg

Following up on our prior post, on February 10, 2012, the French Competition Authority (FCA) published the final version of its framework document on compliance programs and of its Notice relating to settlements.

First, the FCA decided that the Notice of Settlement would have the legal status of a "directive" under French administrative case law. Consequently, the Notice of Settlement is legally binding on the FCA and fully enforceable against it, except if the FCA explains in its decision the specific circumstances or any reason of general interest commanding it to adopt another solution.

Second, for the Notice of Settlement, the FCA decided to relax its initial rule preventing the cumulating of a settlement reduction and a leniency reduction. The FCA adopted this principle, first put forward in the laundry detergents cartel decision (December 8, 2011), that states companies may cumulate both reductions when significant procedural efficiencies are expected from such a cumulation of both procedures. In particular, this could occur when the objections notified to a party differ from the cartel described by the party in its leniency application. Settling parties may benefit from a 10 percent fine reduction.

In addition, parties settling with the FCA can decide to adopt behavioral or structural remedies that will enable them to benefit from an additional reduction between 5 percent and 15 percent. For cartels, parties can benefit from a reduction of up to 10 percent if they commit to changing their behavior in the future, in particular, by implementing a compliance program.

The framework document on compliance programs maintains that the mere existence of a compliance program will not, in principle, be considered as a mitigating circumstance by the FCA when imposing a fine. However, an important exception to this principle has been added to the draft document for cases other than cartels, e.g. an abuse of a dominant position or a vertical restraint. In these cases, companies with a compliance program that, through their own volition, immediately ends anti-competitive behavior upon discovery through their compliance program – that is, before any inspection or investigation is conducted by a competition authority – may claim the program as a mitigating circumstance if the FCA decides to take action against the company. Consequently, in cases other than cartels, the existence of a compliance program may now, under some conditions, be considered as a mitigating circumstance by the FCA when imposing a fine. It remains to be seen how widely the FCA will apply this new rule and what will be the rate of reduction.

The FCA’s new policy may thus provide strong incentives for companies to implement compliance programs.

Click here to read The Notice of Settlement (in French), here to read the framework document on compliance programs (in French) and here to read the press release (in English).