On June 15, 2023, the Paris Court of Appeals confirmed the French Competition Authority’s (“FCA”) decision fining La Toque Angevine (“LTA”) about 16 million euros for colluding with two other leading manufacturers of industrial sandwiches.
On March 24, 2021, the FCA sanctioned three manufacturers of industrial sandwiches sold under private label, LTA, Snacking Services (Daunat), and Roland Monterrat, for price fixing and market allocation between 2010 and 2016 (the “FCA Decision”). The FCA granted full immunity to Roland Monterrat which was the first company to file for leniency. LTA and Daunat both requested leniency as well, in second and third position, and respectively received a 35% and a 30% fine reduction due to the added value of their disclosures.
LTA appealed, asking the Paris Court of Appeals (the “Court”) to reduce the fine to nine million euros. LTA claimed that the Rapporteur Général wrongly rejected its application for a settlement. It also challenged the determination of the fine claiming that the FCA: (i) retained the wrong value of sales; (ii) did not properly appreciate the gravity of the practice and damage to the economy; (iii) should have set the leniency rate at a higher level given evidence shared by LTA; and (iv) breached the principle of equality by imposing on LTA—but not the two other parties—a 10% fine increase for belonging to a group. The Court rejected all the pleas.
The Court confirmed the fine imposed on LTA
LTA claimed that the Rapporteur Général wrongly refused LTA’s offer to enter into settlement. The Rapporteur Général had refused LTA’s offer on the grounds that a settlement procedure would not grant any procedural gain for the investigation services. LTA claimed that the Rapporteur Général cannot arbitrarily and without motivation refuse to settle with a party due to the principles of transparency and predictability. LTA also claimed that the Rapporteur Général’s refusal breached the principle of equality because in other cases, parties benefitting from leniency were offered a settlement procedure.
The Court rejected LTA’s claims entirely. It reminded that the Rapporteur Général has full discretion to offer a settlement procedure (i.e., companies are not entitled to obtain a settlement, even when they benefit from the leniency procedure) under the FCA’s Procedural notice on settlement and Article L.464-2, III of the French Commercial Code. The Court went on to explain that, in this case, all the parties had been granted conditional leniency, such that the parties were not allowed to challenge the conduct anymore and had committed to put an end to the conduct. In those circumstances, the Rapporteur Général could lawfully consider that a settlement procedure would not bring any additional procedural gains. Second, the fact that certain companies in distinct proceedings benefited from both leniency and settlement procedures cannot constitute a breach of the principles of equality. This principle applies between companies involved in the same proceedings, not by reference to companies involved in distinct proceedings. Finally, the Court held that LTA was in a position to appreciate the nature and level of the fine in light of the legal criteria set out in the French Commercial Code and the FCA’s leniency notice, such that the Rapporteur Général’s refusal to settle did not create legal uncertainty.
The Court also rejected all the pleas put forward by LTA on the determination of the fine. In particular:
- Value of sales. The Court reminded that according to well-established case law, the relevant sales for the calculation of the fine are those realized in the market affected by the conduct (here, the sales generated by industrial sandwiches under private labels sold to mass-market food retailers), not those affected by the conduct (here, the sales generated by the cartelized tenders).
- Gravity. The Court held that the absence of retaliatory measures cannot mitigate the gravity of the conduct, while the fact that the practices were relatively sophisticated and had been kept secret did contribute to the gravity of the conduct.
- Fine increase for belonging to a group. The Court upheld the 10% fine increase, the maximum legal amount, which it held was not disproportionate in light of the group’s resources and the gravity of the practices and damage caused to the economy by the cartel. Furthermore, the Court found that the FCA applied a higher percentage to LTA, whose group has greater financial resources than Daunat.
- Leniency rate. The Court upheld the leniency rate because, in particular, the evidence brought by LTA did not establish the infringement or extend its scope or duration, but simply supported the existence of the infringement.
Takeaways The Court’s judgment confirms that the FCA holds a wide margin of discretion when deciding whether to offer a settlement procedure and that a leniency applicant is not entitled to a settlement—quite to the contrary, settlement is likely to bring limited procedural gains once one leniency application, and even more so for several leniency applications, has been accepted. Furthermore, the Court’s judgment confirms that chances of success on appeal are more limited after a leniency application, as the scope of the appeal is generally limited to claims on the procedure and the calculation of the fine.
 Paris Court of Appeals, judgment of June 15, 2023, No. 21/08411.
 FCA Decision 21-D-09 of March 24, 2021, regarding practices implemented in the sector for the manufacturing and marketing of retailers’ own-brand label sandwiches.
 FCA, Procedural notice of December 21, 2018, regarding the settlement procedure.
 Paris Court of Appeals, judgment of June 15, 2023, paras. 71-84.
 CJUE, judgment of April 23, 2015, C-227/14 P, LG Display et LG Display Taiwan / Commission, paras. 53 et seq.
 Paris Court of Appeals, judgment of June 15, 2023, paras. 147 and 149-153.