On December 9, 2021, the French Competition Authority (the “FCA”) imposed a €100,000 fine on Mayotte Channel Gateway (“MCG”), the manager and operator of the Longoni port in Mayotte, together with its parent company, Société Nel Import Export, for refusal to comply with an FCA request for information.
Background
In 2018, the FCA opened an investigation into alleged practices implemented in the maritime transport sector in Mayotte. In this context, dawn raids were carried out in November 2019 on the premises of MCG and its former subsidiary, port-handling company Manu‑port. Subsequently, in December 2020, the FCA Investigation Services sent a request for information to the president of MCG, specifying that the deadline to respond was set on January 25, 2021.
Despite receiving three reminders from the case handlers, two of which explicitly outlined the penalties incurred in case of failure to reply, as well as two extensions of the deadline that increased the total time limit within which to respond to ten weeks, MCG did not respond to the request for information, leading to the issuance of an obstruction report in June 2021. At the time of the oral hearing which followed the obstruction, i.e., in October 2021, MCG still had not provided any element of response.
The FCA’s analysis
Articles L. 450-1 and L. 450-3 paragraph 4 of the French Commercial Code entitle the FCA Investigation Services to collect any information, document, or evidence necessary for the purposes of an ongoing investigation. Further, consistent EU and French case law states that any company under investigation by a competition authority must respond to requests for information actively, diligently, and in good faith.[1]
Both Article 23(1) of Council Regulation (EC) No. 1/2003 of December 16, 2002 and Article L. 464-2, paragraph V, of the French Commercial Code provide that obstructing an investigation may give rise to fines. These provisions also specify that obstruction may be characterized by any behavior that hinders or delays the progress of an antitrust investigation. In other words, obstruction is not limited to the intentional misleading of investigators but also extends to negligence or passive behavior that is likely to compromise the effectiveness of an investigation.[2] Refusal to provide information or documents under request within the required time limit, as well as the failure to rectify an incorrect or incomplete reply, may therefore amount to obstruction. In this respect, in the recent Akka case, the French Constitutional Council confirmed that “any hindrance to the conduct of investigation or inquiry measures, that is attributable to the company [under investigation], whether intentional or resulting from negligence, amounts to obstruction.”[3]
In the present case, the FCA’s Collège found that by deliberately and repeatedly failing to respond to the request for information sent by the investigation services in December 2020, MCG had obstructed the ongoing investigation. The FCA further held that MCG’s parent company, Société Nel Import Export, should be held liable for its subsidiary’s behavior. The two companies were therefore imposed a €100,000 fine, jointly and severally.
Over the past three years, the FCA has been increasingly relying on the French Commercial Code’s provision on obstruction to ensure the effectiveness of its investigative and fact-finding powers. It is now clear that the duty for investigated companies to actively and loyally cooperate with an investigation entails an obligation to respond to information requests in a timely manner. This is the FCA’s fifth obstruction sanction decision in four years.[4]
[1] See Court of Justice’s judgment of October 18, 1989, Orkem v. Commission (Case 374-87). See also FCA Decision No. 17-D-27 of December 21, 2017, relating to obstruction practices implemented by Brenntag.
[2] See judgment of the Court of First Instance of November 9, 1994, Scottish Football Association v. Commission (Case T-46/929). See also FCA Decisions No. 17-D-27 of December 21, 2017, relating to obstruction practices implemented by Brenntag, and No. 19-D-09 of May 22, 2019, relating to obstruction practices implemented by the Akka group.
[3] French Constitutional Council Decision No. 2021-892 QPC of March 26, 2021, Société Akka technologies et autres.
[4] See FCA Decision No. 19-D-09 of May 22, 2019, and No. 17-D-27 of December 21, 2017, referenced above. See also FCA Decisions No. 21-D-16 of July 9, 2021, relating to obstruction practices implemented by Nixon, and No. 21-D-10 of May 3, 2021, relating to obstruction practices implemented by Fleury Michon.