On January 5, 2022, the Paris Court of Appeals annulled a €2 million damages award that the Paris Commercial Court ordered feminine hygiene products company Vania to pay Carrefour[1] as a result of its participation in a cartel in the body care sector, which resulted in maintaining artificially high prices between 2003 and 2006, and for which Vania was fined €45.03 million by the French Competition Authority (“FCA”) in 2014.[2]

In substance, the Paris Court of Appeals held that the EU Damages Directive[3] (the “Directive”) was not applicable at the time of the infringement, and that accordingly, Carrefour should have proved that the overcharge resulting from the anticompetitive practice had not been passed on[4] to consumers, which in this case it failed to do.

The Court observed that the Directive, which introduces a presumption that the victim of anticompetitive practices has not passed on the overcharge caused by the infringement to its customers, and which therefore shifts the burden of proof to the defendant to prove that the overcharge was in fact passed on to consumers, was transposed into French law only in March 2017.[5] However, since the infringement occurred between 2003 and 2006, the changes introduced by the Directive, which, according to the court, were material, could not apply retroactively to the case.

The Court of Appeals also confirmed that the damages claim was filed on time, reminding that, with respect to a cartel decision, the statute of limitation period starts from the time the FCA makes its decision of the infringement public, and that Carrefour had correctly established the existence of an infringement based on the FCA’s decision.

Implications

The Court of Appeals’ ruling (still subject to appeal before the Cour de Cassation) provides similar conclusions to that of its April 2021 ruling on Carrefour’s damage claim against Johnson & Johnson Santé Beauté France in relation to the same infringement. It also follows another decision from the Court of Appeals handed down in November 2021 in the dairy products case,[6] where it also considered the passing-on defense and the substantial nature of the presumption introduced by the EU Damages Directive, preventing its retroactive application.


[1]      Paris Court of Appeals ruling of January 5, 2022 (no. 19/22293).

[2]      See FCA Decision No. 14-D-19 of December 18, 2014, relating to practices implemented in the cleaning products and insecticides sector and in the hygiene and body care products sector. This decision was confirmed by a Paris Court of Appeals ruling of October 27, 2016 (no. 2015/01673), which reduced the fines for Procter & Gamble and Henkel, but which was later partially overruled in the Cour de Cassation ruling of March 27, 2019 (no. 16-26.472).

[3]      Directive 2014/104/UE of the European Parliament and of the Council of November 2014 on certain rules governing actions for damages under national law for infringements of the competition law provisions of the Member States and of the European Union.

[4]      “Passing-on” is an economic concept whereby an injured party passes on its actual loss resulting from an antitrust infringement to the next level of the supply chain (“overcharge”), by increasing the price of its products or services sold to its own customers.

[5]      Order no. 2017-303 of March 9, 2017 on actions for damages due to anticompetitive practices and decree no. 2017-305 of March 9, 2017 on actions for damages due to anticompetitive practices.

[6]      Paris Court of Appeals ruling of November 24, 2021 (no. 20/04265).