On June 13, 2019, the Paris Court of Appeals ruled that an undertaking can challenge the proportionality of a fine set by the FCA within the range agreed with the Rapporteur Général during a settlement procedure.[1]
Under the settlement procedure, companies can negotiate the range of their fine with the FCA’s investigation services if they accept to fully cooperate and waive their rights to challenge the FCA’s objections. The settlement procedure was introduced in 2015 to accelerate proceedings, reduce the number of appeals, and reduce uncertainty as to the fine amount for companies. During the settlement procedure, the Rapporteur Général proposes a range for the fine,[2] and the FCA’s Collège then imposes a fine within that range.
In this case, the FCA had found that three distributors of veterinary medicinal products had concluded “non-aggression” pacts to allocate customers. It also found that the distributors and their professional association, FDMV, had colluded to set the compensation amount that the French government was to pay for various vaccination campaigns. The companies had asked the FCA to benefit from the settlement procedure. In its decision, issued on July 26, 2018,[3] the FCA fined the distributors and the professional association a total amount of €16 million for the two cartels.[4] Three Alcyon, the company that received the highest fine (i.e., €10 million), appealed the FCA’s decision, claiming that the FCA had violated the principle of proportionality when setting the amount of its fine.
In its ruling, the Paris Court of Appeals ruled that the settlement procedure does not prevent undertakings from challenging the final decisions, as long as they do not challenge the range of the fine in itself.[5] The Court added that an undertaking cannot be deemed to have waived its right to challenge the proportionality of the fine during the settlement procedure when the fine has not yet been imposed.[6] In this case, however, the Court rejected Alcyon’s claims, finding that the fine was proportionate to the damage to the economy, as well as to the gravity and duration of the infringement.
[1] Paris Court of Appeals, 5-7, June 13 2019, 18/20229.
[2] In the present case, the General Rapporteur and the undertaking agreed on a range of €6 million to €11 million.
[3] French Competition Authority, Decision No. 18-D-15 of July 26, 2018 regarding practices implemented in the distribution of veterinary medicinal products sector.
[4] The undertakings which have been fined are Alcyon France and Alcyon, Coveto, Centravet, Hippocampe Caen, Agripharm and Chrysalide, Coveto Limoges, Véto Santé, Elvetis and Neftys Pharma and the Federation for the distribution of veterinary medicinal products (Fédération de la Distribution du Médicament Vétérinaire).
[5] Paris Court of Appeals, op. cit., para. 46.
[6] Paris Court of Appeals, op. cit., para. 47.