On May 18, 2020, the French Cour de Cassation upheld the Paris Court of Appeals’ judgment which had confirmed the French Competition Authority’s (“FCA”) fining decision against Groupement des Installateurs Français (“GIF”). The Cour de Cassation held that the FCA’s Collège could re-open the investigation to allow the FCA’s investigation services to add evidence on which they relied for establishing the statement of objections (“SO”) but that they “inadvertently omitted” to include in the case file. The defendant’s response to the flawed SO can remain in the case file despite the fact that the defendant did not have access to that evidence when preparing its response, as long as the defendant is given the chance to reply to a supplementary SO after the investigation is re-opened.
Background
This decision related to the November 24, 2016 decision of the FCA fining GIF €0.9 million. The FCA decision found that GIF had organized a territorial distribution agreement between its members—independent installers of professional kitchen supplies.
In this case, the FCA’s investigation services had issued a SO without including, in the SO’s case file, the DGCCRF report that had triggered the investigation. GIF responded to this SO without having had access to the report. When the case was transmitted to the FCA’s Collège, it found the investigation to be incomplete and decided to refer the case back to the investigation services on the basis of Article R. 463-7 of the French Commercial Code.[1] The investigation services added the report to the case file and issued a supplementary SO to GIF a month later. This supplementary SO relied, in particular, on GIF’s response to the first SO.
On appeal, GIF claimed that the procedure was flawed. It argued that, first, the FCA had misused Article R. 463-7 of the French Commercial Code, arguing that this article allows the FCA’s Collège to refer a case back to the investigation services when the “investigation” – not the “case file” – is incomplete. GIF argued that, in this case, the FCA had used this article to cover a procedural flaw (that is, the investigation services’ failure to include a key piece of evidence in the case file), not to complete the investigation. Second, GIF argued that the FCA should have removed its response to the first SO from the case file when it re-opened the investigation, and that failure to do so violated the principle of equality of arms and the right to a fair trial.
The Court of Appeals dismissed all of GIF’s claims. GIF appealed in cassation.
The Cour de Cassation ruling
The Cour de cassation rejected both of GIF’s claims. First, it upheld the FCA’s use of Article R. 463-7, confirming that the FCA can re-open the investigation for the sole purpose of adding a missing piece of evidence, and not only to carry out further investigative acts. Second, the Cour de cassation confirmed that the FCA’s investigation services could rely on GIF’s response to the first SO in the supplementary SO without violating the principle of equality of arms. The Cour de cassation considered that this situation was similar to that of the investigation services responding to the defendant’s arguments orally at the hearing, which they are legally entitled to do. It also noted that GIF had been given the chance to submit new observations in response to the supplementary SO.
Take-aways
The Cour de Cassation’s ruling raises interesting strategic considerations for situations where a defendant suspects that an important document is missing in the FCA’s file. Indeed, defendants should be aware that in such cases, they may obtain access to the missing document after the FCA’s Collège hearing, but that they will not be able to challenge the decision on the grounds of a procedural flaw or rescind any submissions made in the proceedings.
[1] Article R. 463-7 of the French commercial code provides that when it find the investigation incomplete, the French Competition Authority can decide to refer the case back in full or in part to the investigation stage. This decision cannot be appealed.