In a ruling dated December 2, 2021, the Paris Court of Appeals overturned a 2010 decision in which the French Competition Authority (the “FCA”) had fined 11 major French banks for colluding on check handling fees, possibly bringing the 11-year saga to an end.  The ruling confirms that the concept of by-object restriction should be interpreted restrictively, in line with a judgment issued by the French Cour de cassation in the same case in 2020.


On September 20, 2010, the FCA imposed a 385 million euro fine on 11 French banks for agreeing to fix interbank fees for processing checks.[1]  This mechanism, which required the check beneficiary’s bank to pay a fixed fee to the issuer’s bank in order to offset the losses associated with the digitalization of the check-processing system, was deemed to amount to a restriction of competition by object.

In 2012, on appeal by the banks, the Paris Court of Appeals (the “Court of Appeals”) annulled the FCA Decision for failure to demonstrate that the introduction of interbank fees had an anticompetitive object.[2]  However, this ruling was quashed by the Cour de cassation, which found that the judges had not properly examined all of the parties’ pleas, and the case was remanded back to the Court of Appeals.[3]

On December 21, 2017, in its second appeal ruling, the Court of Appeals upheld the FCA Decision.  The Court of Appeals found that the fixed interbank fee in fact amounted to a by-object restriction because it did not correspond to any actual service, therefore artificially increasing the costs of check processing and thus the price of the services provided to final customers.  The Court of Appeals further considered that the fee restricted the banks’ ability to determine their own pricing policies.[4]

This second ruling was challenged by the banks before the Cour de cassation, which found that the banks’ conduct had been improperly qualified as a by-object infringement.  In line with consistent EU case law,[5] the Cour de cassation held that in the absence of past experience, the Court of Appeals could not assume that the costs associated with check-processing fees would necessarily be passed on to final customers or that fixing these fees would crystallize the market structure.[6]  As a result, the case was remanded once again to the Court of Appeals.

Absence of “by-object” restriction

In its ruling of December 2, 2021, the Court of Appeals followed the Cour de cassation’s reasoning and accordingly found that the banks’ conduct did not qualify as by-object infringement because it did not reveal, in itself, a sufficient degree of harm to competition.  In particular, the Court of Appeals held that the FCA should not have relied on a general assumption that costs are passed on to customers to presume that the interbank fee would be passed on to the banks’ customers.

The Court of Appeals subsequently examined the legal and economic context of the impugned agreement and found that it did not require the banks to pass on the fees, nor did it prevent the banks from bilaterally negotiating different terms and conditions for check processing with their customers.  In addition, the Court noted that the agreement’s objectives, which were to (i) maintain a financial equilibrium between the various banks (as the check-processing system was likely to have a greater impact on issuers’ banks, i.e., on banks providing mostly retail banking services), and (ii) ensure that the digitalization of the check-processing system would not favor the use of checks over more efficient means of payment, such as credit cards or interbank payment orders, could not be considered illegitimate.  Consequently, the Court held that the interbank agreement’s inherent harmfulness was not easily detectable in light of past experience and case law, especially since no such agreement had ever been examined by European or national competition authorities.

No restriction by effect

Regarding the potential effects of the agreement on competition, the Court of Appeals considered that the FCA’s counterfactual analysis was flawed due to the fact that the FCA compared the existing situation to a situation where the banks (i) would not have agreed on fixing interbank fees and (ii) where the acceleration of check processing, which caused the treasury imbalance that the agreement was intended to fix, would nevertheless have occurred.  According to the Court of Appeals, the FCA should have used a scenario where neither event took place given that the interbank fee was necessary to allow the acceleration of check processing.  The FCA should thus have factored in the gains and losses associated with the check‑processing acceleration in its effects analysis.

The Court of Appeals noted that there was no evidence that the interbank fee and acceleration of check processing translated into a price increase for the various categories of check issuers and therefore concluded that the FCA had not established that the interbank fee had significantly reduced competition on the market.

Clarifications regarding the Court of Appeal’s jurisdiction

The case also raised the question of whether the Court of Appeals can rule on the effects of alleged anticompetitive practices in cases where the FCA has found a by-object infringement and consequently has not conducted an effects analysis in its decision.

In this respect, the Court of Appeals recalled that pursuant to articles L.464-8 of the French Commercial Code and articles 561 and 562 of the French Code of Civil Procedure, it is entitled, when ruling on appeals from FCA decisions, to reach a new decision on the existence of the objections notified by the FCA.  This means that the Court’s own reasoning may replace the grounds of the FCA’s decisions, provided that the parties’ right to adversarial proceedings is complied with. In the present case, given that by-object and by-effect agreements are not autonomous infringements, but rather alternative categories of the same infringement, the Court of Appeals had jurisdiction to rule on the effects of the banks’ conduct regardless of the fact that the FCA had not tackled the issue in its decision.

It remains to be seen whether the FCA will, yet again, challenge the Court of Appeals’ annulment decision.

[1]           FCA Decision No. 10-D-28 of September 20, 2010, relating to prices and associated conditions applied by banks and financial institutions for processing checks submitted for encashment purposes (the “FCA Decision”).

[2]           Paris Court of Appeals ruling of February 23, 2012 (No. 2010/20555).

[3]           Cour de cassation judgment of April 14, 2015 (No. 12-15.971).

[4]           Paris Court of Appeals ruling of December 21, 2017 (No. 15/17638).

[5]           See the Court of Justice’s judgments of September 11, 2014, Groupement des cartes bancaires v European Commission (Case C‑67/13 P) and of November 26, 2015, SIA “Maxima Latvija” v Konkurences padome (Case C-345/14).

[6]           Cour de cassation judgment of January 29, 2020 (No. 18-10.967 and 18-11.001).