On February 15, 2023, the French competition authority (the “FCA”) deemed inadmissible Interflora’s application for review of injunctions imposed in 1986 and 2001 decisions (the “Decision”).
Background
In 1986, the Ministry of the Economy considered that Interflora had abused its dominant position in the flower delivery market by imposing a clause preventing members of its network from belonging to a competing network and ordered Interflora to remove the clause from its internal rules.[1] Years later, competitors complained that Interflora was rewarding members of its network based on certain criteria, including limiting their operations or making sales exclusively under the Interflora brand. In 2001, the Competition Council fined Interflora for abuse and ordered it to stop applying these criteria.[2]
In December 2020, Interflora requested that the FCA review the injunctions imposed by the 1986 and 2001 decisions, claiming that they had become obsolete due to significant market changes.
The FCA’s lack of jurisdiction to review injunctions
While the FCA’s investigation services initially assessed Interflora’s request on the merits and took the view that it should be rejected because of Interflora’s persistent dominant position on the flower delivery market,[3] the FCA’s Collège eventually rejected Interflora’s request due to lack of jurisdiction. The FCA’s Decision took three aspects into consideration.
- Although the FCA has jurisdiction to impose sanctions, including injunctions, and monitor companies’ compliance with injunctions, there is no statutory or regulatory provision allowing it to revise a sanction decision that has acquired the force of res judicata,[4] as is the case for the 1986 and 2001 decisions.
- Companies subject to injunctions must comply with those injunctions “within a reasonable timeframe”. The Decision concludes that Interflora did comply with the injunctions imposed in 1986 and 2001 within a reasonable timeframe.
- Once injunctions are imposed and the decision imposing the injunctions is final, companies cannot ask the FCA to reassess the validity of the injunctions and issue a negative exemption decision concluding that no competition law infringement has occurred (particularly when the conduct at stake is likely abusive, given that Article 102 TFEU does not allow for any individual exemption). Instead, the companies themselves must assess the validity of the agreements they enter into and the behaviour they adopt in light of antitrust rules, in general, and the injunctions imposed on them to remedy anticompetitive practices.[5] The FCA only assesses compliance of practices with antitrust rules if its investigation services open a fully-fledged investigation (entailing the risk of sanctions).[6]
Takeaway
In abuse of dominance cases, when the FCA orders a company to cease abusive conduct or modify its conduct, it typically does not set a time-limit for the application of the injunctions. The injunctions apply as long as the firm holds a dominant position on the relevant market. The Decision confirms that a company cannot seek confirmation from the FCA that it no longer holds a dominant position and that the injunctions imposed on it are therefore no longer applicable. Instead, the company must practice self-assessment and bear the risk of being found non-compliant should the FCA open an investigation. By contrast, in merger control proceedings, the FCA can impose injunctions (i) in the absence of commitments (or in the absence of sufficient commitments to maintain effective competition) in Phase II[7] or (ii) if the merging parties fail to comply with commitments.[8] Article L. 461-3 of the French Commercial Code provides that the FCA’s President or a Vice-President appointed by him can adopt decisions revising injunctions imposed in Phase II, but makes no mention of injunctions imposed for failure to comply with commitments. In practice, the FCA has agreed to review and lift injunctions when they were no longer deemed necessary to maintain effective competition in both scenarios.[9]
[1] Decision of the Minister of the Economy No. 86-4/DC of February 6, 1986.
[2] Competition Council Decision No. 00-D-75 of February 6, 2001.
[3] Decision, para. 4.
[4] Decision, paras. 31, 33-34.
[5] Decision, para. 36.
[6] Decision, para. 38.
[7] Article L. 430-7, III. of the French Commercial Code.
[8] Article L. 430-8, IV. of the French Commercial Code.
[9] See, for instance, (i) in the SFR/Altice case, Decision No. 19-DCC-199, para. 240 and Decision No. 22-D-15, para. 147; and (ii) in the Vivendi/TPS and CanalSatellite, Decision No. 17-DCC-92 of June 22, 2017.