Three years after the introduction of a settlement procedure in its legal arsenal, the FCA has issued guidelines on the conduct of settlement proceedings (the “Settlement Notice”). The Settlement Notice aims at clarifying the framework under which companies may be granted fine reductions in the context of antitrust investigations. However, several questions are still pending, including the determination of the final amount of the fine by the FCA’s Collège and the impact of settlement proceedings on follow-on damages claims.
On December 27, 2018, the FCA published the final version of its procedural notice on the scope of application and conditions for the implementation of settlement proceedings.
The settlement procedure was introduced into the French Commercial Code by the law of August 6, 2015, for economic growth, activity and equal opportunities (the “Macron Law”). It replaced the former non-objection procedure (procédure de non-contestation des griefs) and allows companies that do not dispute the objections notified against them to benefit from a reduced fine.
Increased legal certainty for companies willing to use the settlement procedure
In contrast to the non-objection procedure, which granted companies a reduction of a certain percentage of the fine that would normally have been imposed, without the amount of this fine being known, the settlement procedure aims to offer more foreseeability. Indeed, the settlement procedure allows the investigation services and the undertaking to agree on minimum and maximum amounts for the fine. The FCA Collège then decides on the final amount of the fine. On this point, the Settlement Notice indicates that the Collège must comply with the established fine range – which may, however, be broad.
The Settlement Procedure also provides certain details on the terms of the procedure. Companies wishing to benefit from the settlement procedure must make a request to the Rapporteur Général (Lead Case Handler) and reach an agreement within two months of receiving the statement of objections. On the merits, the company must refrain from contesting the reality, the legal qualification and any liability regarding all of the objections brought against it, as well as the proceedings which led to the statement of objections. The terms of the settlement are then formalized in minutes, signed by the undertaking, which contain a declaration that the undertaking does not contest the allegations brought against it, any commitments proposed and the fine range. During the session before the Collège, the undertaking retains the right to submit observations relating to the final determination of the fine amount.[1]
Finally, the Settlement Notice clearly asserts that the decision as to whether or not to implement the settlement procedure rests with the Rapporteur Général, who shall assess this on a case-by-case basis, particularly with regard to the procedural gain for the FCA (reduced length of proceedings, simplified case handling etc.). In particular, when objections are notified to several undertakings, the investigation services favor the settlement procedure when all undertakings so request. The Notice also provides that the settlement procedure may be combined with partial fine immunity granted under leniency.
Pending issues
Despite the clarifications it provides on the various stages of the procedure, the Settlement Notice remains silent on certain points. In particular, as opposed to settlement proceedings before the European Commission, the Notice does not provide for any negotiation as to the scope of the alleged practices. Indeed, the settlement procedure is only available after the statement of objections has been issued; therefore, discussions with the investigation services take place after the objections have been established. Thus, the French system is not intended to jointly assess the scope of the objections and therefore does not offer any procedural gain until the statement of objections has been sent.
In addition, with regard to the determination of the fine range, the Settlement Notice only indicates that neither the investigation services nor the FCA Collège are required to apply the standard method for calculating fines, as presented in the sanctions notice of May 16, 2011.
Similarly, while the Settlement Notice offers companies the option to propose commitments, which the Rapporteur Général may potentially take into account, it does not specify which types of commitments could give rise to a reduced fine. It merely specifies that commitments relating to the implementation of compliance programs generally do not justify a reduced fine. The question of the factors taken into account in determining the final amount of the fine therefore remains open.
Finally, while the Settlement Notice notes that the waiver of the right to contest objections is neither an admission nor an acknowledgment of company liability, it is not entirely explicit on the question of follow-on damages claims that may be initiated as a result of a settlement decision, even though this decision establishes the undertaking’s participation in an infringement. The Notice only indicates, in accordance with the provisions of the Damages Directive, that the settlement minutes may not be disclosed to third parties. However, there is no guarantee regarding third-party access to the statement of objections, or to the level of detail in the decision – although, in practice, the arguments concerning the calculation of sanctions have been relatively concise in the 12 settlement decisions adopted, to date, by the FCA.
[1] These observations, which must not, under any circumstances, call into question the facts and qualifications retained by the investigation services, may concern the gravity of the acts in question, the damage caused to the economy or any aspects specific to the concerned undertaking (for example, mitigating circumstances).