In a 350-page decision dated December 29, 2023, the French Competition Authority (“FCA”) sanctioned four professional associations and eleven undertakings, in their capacity as members of these associations, for having implemented a collective strategy to prevent market players from competing on the presence or absence of Bisphenol A (“BPA”) in food containers (the “Decision”). [1] The total fine amounts to €19,543,400.
Background
BPA, a synthetic chemical employed in the production of resins, is commonly utilized in the interior lining of metal cans and metal lids used in the food and beverage industry. In reaction to the publication of certain scientific studies that pointed out the potential risks to human health, France passed a law on December 24, 2012 that banned the use of BPA in all food packaging as of January 1, 2015,[2] thereby allowing for a transitional period of two years.
On October 5, 2021, the FCA notified a statement of objections to several trade associations and close to thirty undertakings across the entire food supply chain, including can manufacturers, canned-food suppliers and distributors.
The Decision
In its Decision dated 29 December 2023, the FCA fined four professional organizations, three can manufacturers and eight canned food suppliers a total of €19,543,400 for having coordinated their behavior between 2011 and 2015 to limit the competition risks associated with the “BPA-free” transition. This strategy included (i) an agreement not to communicate on the absence or presence of BPA in food-grade materials and (ii) an agreement to harmonize the launch date of BPA-free products on the market, which together constituted a single, complex and continuous infringement.
The practices. The practices primarily consisted in the adoption of a communication and monitoring strategy by the professional associations in the food industry, which was implemented by their members. The common strategy prevented members from communicating on the absence or presence of BPA in food-grade materials during the transitional period. The Decision refers to the associations’ communication initiatives advising members against competing on the BPA-related aspect, their attempts to rally retailers on the issue, and to letters sent to industry players who made use of “BPA-free” claims.
Separately, the practices also included a collective refusal to supply retailers with BPA-free cans before the cut-off date of January 1, 2015.
A by-object restriction. The FCA found that the practices constituted a restriction of competition by object. To reach such a conclusion, the Decision found that the absence or presence of BPA was in and of itself a competition parameter influencing consumer choices. The FCA then went on to highlight that the practices aimed to prevent economic players from gaining a competitive edge over each other by highlighting the absence of BPA in their products, thus restricting a competition parameter. The FCA Decision also brushed aside the argument that the objectives behind the practices were legitimate, noting that they aimed to ensure that no player would gain a competitive advantage by substituting products containing BPA with products without BPA.
The FCA also dismissed all arguments made with respect to the specific context of the practices, such as the uncertainties caused by the legal landscape at the time, particularly whether “BPA-free” claims were allowed in French consumer protection law, and the lack of scientific consensus on the risks of BPA for human health.
No infringement for a number of entities. While the statement of objection was notified to almost thirty undertakings, only eleven were found to have infringed competition law. The FCA considered that there was insufficient evidence to conclude that some of them had adhered to the collusive agreement. Others were cleared from any wrongdoing without the FCA having to assess their potential participation in the collusive agreements, as they benefitted from the 10-year statute of limitations.[3]
The fines. To set the amount of the financial penalties, the FCA deviated from its fining guidelines and imposed a lump-sum penalty, given that (i) the practices were established against various companies and associations of various economic weight and (ii) the professional associations did not generate a turnover that could be used as a basis for calculating a fine.While finding that the practices were particularly serious, the FCA also considered the substantial uncertainty created by the “BPA-free” transition.
Take-aways
This is the first decision in France that sanctions communication-related behaviors as a stand-alone by-object restriction of competition.
The Decision is also testimony to the FCA’s position that there is no pre-established list of competition parameters that may lead to by-object infringements of competition law. In the present case, the FCA held that the quality of food packaging (i.e., the presence or absence of a particular chemical component in the packaging) inherently constitutes a “qualitative” competition parameter.
This finding aligns with a broader global trend observed in recent competition law enforcement which expands the scope of competition law to address broader societal goals such as sustainability, health, data protection, and workers’ rights.
Finally, the Decision also demonstrates the FCA’s heightened interest in enforcing competition law against professional associations, in line with its 2021 study on the application of competition law to professional bodies.[4]
[1] FCA Decision No. 23-D-15 of December 29, 2023, relating to practices in the sector of the manufacture and sale of foodstuffs in contact with materials that may contain or may have contained Bisphenol A.
[2] Law No. 2012-1442 of December 24, 2012 aimed at suspending the manufacture, import, export and marketing of any food packaging containing bisphenol A.
[3] Under Article L.462-7 of the French Commercial Code, the FCA is prohibited from imposing sanctions for anticompetitive practices that occurred more than ten years prior to the end of the practice.
[4] See FCA press release, The Autorité de la concurrence publishes a study on professional bodies, January 27, 2021, available here. See also FCA press releases regarding recent decisions: The Autorité de la concurrence sanctions the French National Confederation of Tobacconists (Confédération nationale des buralistes de France) for organising boycott practices aimed at hindering the distribution of FDJ games by the Florajet florist network, September 27, 2023, available here [see our September 26, 2023 Antitrust Watch Blog https://www.clearyantitrustwatch.com/2023/09/the-french-competition-authority-fines-french-tobacco-shops-trade-union-for-boycotting-practices-in-the-distribution-of-gambling-games/]; Several entities sanctioned in bakery equipment distribution sector, April 25, 2023, available here [see our April 2023 French Competition Law Newsletter (https://www.clearygottlieb.com/-/media/files/french-competition-reports/french-competition-newsletter-april-2023.pdf)]; Fisheries and aquaculture sector: the Autorité de la concurrence fines the Association réunionnaise interprofessionnelle de la pêche et de l’aquaculture (Reunionese Interprofessional Fisheries and Aquaculture Association) for implementing an anticompetitive agreement on price and control of production and outlets, November 16, 2022, available here.