On February 10, 2021, the French Cour de cassation (the “Cour de cassation”)[1] appeared to put an end to the “Packaged Flour” legal saga, as it dismissed yet another appeal seeking to reform the French Competition Authority’s 2012 prohibition decision.[2] The judgment constitutes a strong incentive for companies to expressly and publicly distance themselves from cartels, as it confirms that a company’s inertia after attending a single meeting may be taken into account to determine the duration of its participation in the infringement even if that company refrains from participating in subsequent anticompetitive meetings.
Background
On March 13, 2012, following a four-year investigation, the FCA fined 17 millers for participating in two anticompetitive agreements, one of which was a Franco-German cartel which lasted from 2002 to 2008 (the “Infringement Period”). On appeal, the Paris Court of Appeals held that the FCA had incorrectly assessed the duration of two millers’ participation in the cartel, namely GoodMills Deutschland GmbH (“GoodMills”, formerly VK-Mühlen) and Grands Moulins de Paris. Specifically, the Court noted that both GoodMills and Grand Moulins de Paris had only attended the sixth meeting out of the twelve meetings that took place during the Infringement Period, and that the other cartel members stopped inviting them to subsequent meetings after a certain point, thereby showing their understanding that GoodMills and Grand Moulins de Paris had ceased to participate in the infringement before the end of the Infringement Period. As a result, the Court ruled that participation in the cartel had only lasted 10 months for GoodMills and five weeks for Grands Moulins de Paris, and accordingly reduced the fines imposed by the FCA.[3]
The Cour de cassation’s ruling
Despite obtaining a significant fine reduction on appeal, GoodMills took the view that the duration of its participation was even shorter than what the Paris Court of Appeals had decided. Indeed, the Court held that GoodMills had participated in the infringement until the eleventh meeting, i.e., the first meeting for which it did not receive any invitation, even though GoodMills had previously not been invited to the eighth and ninth meetings. GoodMills thus appealed the Paris Court of Appeals’ decision on two grounds.
First, GoodMills claimed that the absence of public distancing could not by itself, in the context of a cartel continuing over time through successive collusive meetings, constitute a sufficient proof of its ongoing participation in the infringement, given that (i) GoodMills only attended a single meeting, (ii) it was not up to GoodMills to decide whether or not invitations to anticompetitive meetings should be sent, and (iii) the Court of Appeals had not referred to additional factual evidence showing that GoodMills was otherwise implementing the anticompetitive agreement.
Second, GoodMills considered that the Paris Court of Appeals had failed to take into account the irregular frequency in the invitations. According to GoodMills, even assuming that the reception of invitations to anticompetitive meetings combined with an absence of explicit distancing may be sufficient to characterize a company’s participation in an infringement, such participation cannot be considered as uninterrupted unless it can be based on facts sufficiently close in time.
The Cour de cassation dismissed both pleas. The Court ruled that the Court of Appeals’ reasoning did not merely rely on GoodMills’ absence of public distancing and was sufficiently justified by factual elements showing the company’s continuous participation in the infringement. In other words, while the lack of explicit distancing may not amount to participation in itself, the failure of other cartelists to understand that the company has implicitly distanced itself from the infringement may suffice to characterize an infringement.
Implications
The Cour de cassation’s ruling makes it clear that once companies start participating in collusive practices, explicit and public distancing is highly recommended. Failing this, companies run the risk of being fined as though they still were fully implementing the anticompetitive agreement even if they stop attending anti-competitive meetings.
[1] French Cour de cassation, Commercial Chamber February 10, 2021, Judgment no204 FS-D.
[2] FCA Decision no. 12-D-09 of March 13, 2012, regarding practices implemented in the packaged flour sector.
[3] From €17.1 million to €5.7 million for GoodMills and from €11.8 million to €334,537 for Grands Moulins de Paris.