On November 25, 2020, the FCA chose to depart from its long-standing decisional practice on intra- group bidding.[1] Following the European Court of Justice’s ruling in Ecoservice projektai,[2] the FCA concluded that intra-group bids to tenders no longer fall within the ambit of competition law.
Background
Until the Decision, the FCA and the Paris Court of Appeals had consistently held that the submission of seemingly independent, but actually coordinated, bids from companies part of a single group could constitute a violation of Articles 101 TFEU and L. 420-1 of the French Commercial Code, under the principle that subsidiaries presented as independent and competing against each other should thus be deemed autonomous.[3]
On May 17, 2018, the ECJ handed down a preliminary ruling in which it held that Article 101 TFEU does not apply where the agreements or practices it prohibits are carried out by undertakings which constitute a single economic unit and that there is therefore no need to examine whether the submission of such tenders constitutes conduct in breach of Article 101 TFEU.[4]
The FCA’s decision
In May 2019, the FCA launched an investigation against bidders that participated in a call for tender issued by the public entity France AgriMer (“AgriMer”) for the supply of agricultural and seafood products to charities and subsidized grocery stores. From 2013 to 2016, four subsidiaries belonging to the Ovimpex group (i.e., Ovimpex, Etablissements Dhumeaux, Mondial Viande Service, and Vianov; the “Ovimpex subsidiaries”) submitted separate and allegedly non-coordinated bids in response to AgriMer’s calls for tenders.
In February 2020,[5] the FCA notified a statement of objections to the Ovimpex subsidiaries alleging that they had coordinated their bids to AgriMer’s tenders between 2013 and 2016. The investigation services relied on the existence of a framework agreement between the Ovimpex subsidiaries assigning to Dhumeaux the drafting of the bids on their behalf, as well as declarations from employees at the Ovimpex group.[6] The Decision indicates that the relevant tenders amounted to more than €290 million. The Ovimpex subsidiaries did not dispute the facts brought against them and agreed to a settlement.
At the hearing in September 2020, the FCA’s investigation services and Government Commissioner however pled in favor of abandoning the objection while relying on “a recent change in EU case law” on agreements on the submission of public procurement tenders between companies part of a same group.[7] The FCA’s Collège followed the investigation services’ proposal.
In its Decision, the FCA first recalled EU and French case law according to which (i) Articles 101 TFEU and L. 420-1 of the French Commercial Code do not apply to agreements and practices implemented within a single economic unit,[8] and (i) the presumption of decisive influence that a parent company exercises over the conduct a subsidiary when the subsidiary is wholly-owned by the parent company.[9] The Decision then notes that under settled French case law, the prohibition of restrictive agreements also applied to agreements concerning undertakings of a same group in a situation where these undertakings would submit separate bids in a call for tender. Guided by the “first” ECJ ruling on this topic, the FCA therefore reconsidered its decisional practice.[10]
Applying this change in law to the case at hand, the Decision recognizes that the Ovimpex subsidiaries are wholly-owned by Ovimpex, parent company between 2013 and 2016. The Ovimpex subsidiaries therefore constitute a single economic unit under competition law, even if they submitted separate bids to AgriMer’s tenders. As a result, the FCA closed its investigation.
The FCA however made clear that parallel bids by several companies of the same economic group remain subject to public procurement rules.
[1] FCA, Decision 20-D-19 of November 25, 2020 regarding practices adopted in the sector for the procurement of food products by the national public body France AgriMer (the “Decision”).
[2] Šiaulių regiono atliekų tvarkymo centras and Ecoservice projektai UAB (Case C-531/16) EU:C:2018:324 (“Ecoservice projektai”).
[3] E.g., Paris Court of Appeals, société Maquet, October 28, 2010, No. 2010/03405 and FCA decision No. 18-D-02 of February 19, 2018.
[4] Ecoservice projektai, para. 28-29.
[5] The exact date of notification of the statement of objection is unclear (see February 4, 2020 at para. 4, and January 28, 2020 at para. 39).
[6] AgriMer Decision, paras. 21-35.
[7] Decision, para. 44, free translation.
[8] The Decision refers to Imperial Chemical Industries Ltd v. Commission (Case 48-69), EU:C:1972:70 and several FCA decisions (No. 91-D-12, No. 92-D-68, No. 99-D-18, and No. 07-D-12).
[9] The Decision refers to Akzo Nobel NV e.a. v. Commission (Case C-97/08 P), EU:C:2009:536, Arkema SA v. Commission (Case T-168-05), EU:T:2009:367, and FCA decisions No. 09-D-36 and No. 10-D-39.
[10] FCA Decision, para. 66.