Resolutely committed in a time of crisis

Continued sustained activity

Despite a particularly complicated context on account of the Covid-19 epidemic, representatives of the European Commission and national competition authorities (NCAs) met 18 times in 2020 in the context of the European Competition Network (ECN). This illustrates the strong desire of its members to safeguard European cooperation in the area of competition, and to confront the exceptional circumstances. The work focused on convergence in merger control and antitrust, abuse of dominant position and illegal horizontal and vertical practices. The question of implementing competition law in the specific context of the public health crisis was also a central issue.

Immediate responsiveness to support economic activity

From March 2020 on, the European Commission and the European Competition Network set up a temporary framework to assess possible anticompetitive practices that might have been implemented in the context of cooperation between companies to respond to emergency situations arising from the pandemic. This framework also took into account the impact of the crisis on merger control, as well as the progress of investigations into anticompetitive practices.
The European network indicated that this extraordinary situation may trigger the need for companies to cooperate in order to ensure the supply and fair distribution of scarce products to all consumers. In the current circumstances, the ECN will not actively intervene against necessary and temporary measures put in place in order to avoid a shortage of supply.
Companies that had any doubts as to the compatibility of these cooperation initiatives with competition law could at any time contact the Commission or the relevant national competition authority for informal advice.

At the same time, it is of utmost importance to ensure that products considered essential to protect the health of consumers in the current situation (e.g. face masks and sanitising gel) remain available at competitive prices. The ECN will therefore not hesitate to take action against companies taking advantage of the current situation by cartelising or abusing their dominant position.

In this context, the ECN wished to point out that the existing rules allow manufacturers to set maximum prices for its products. It should be noted that, under French law, article L. 410-2, paragraph 3, of the French Commercial Code (Code de commerce) provides that (translated) “The provisions of the first two paragraphs [relating to freedom of pricing] do not prevent the Government from adopting, by decree in the Council of State, temporary measures to prevent excessive price increases or decreases, in response to a crisis situation, exceptional circumstances, a public disaster or a manifestly abnormal market situation in a given sector”. To meet demand and tackle the sharp rise in the selling price of sanitising gels or solutions since the emergence of the coronavirus in France, the Government decided to make use of this provision. As such, it promulgated various decrees regulating the prices of these products and extending manufacturing authorisations in order to tackle shortages.

Message of the ECN to companies on what they can do in the face of the Covid-19 epidemic, Press Release of the Autorité de la concurrence, 23 March 2020

Covid-19 Section of the website of the Autorité de la concurrence

The new powers conferred on the Autorité by the Directive

Adopted in 2019, European Directive n° 2019/1, known as “ECN+” (European Competition Network) has allowed major advances to strengthen competition policy. This directive enlarges the resources available to national competition authorities and provides for the creation of a “common set of powers” enabling them to enforce competition rules more effectively within the European Union. All competition authorities will now have the same powers at European level, ensuring a more effective enforcement of anticompetitive practices.

In France, the publication of Act 2020-1508 of 3 December 2020 on various provisions for adapting economic and financial legislation to European Union law (the DDADUE Law), which allows the ECN+ Directive to be transposed by ordinance, marks the next step in the modernisation of the Autorité and its powers.

The power at the Autorité’s disposal to implement interim measures on its own initiative will be particularly useful, to allow it to intervene even more rapidly in the practices that are the most harmful to the economy. The Autorité has already had the opportunity to test the effectiveness of this tool in the mass retail distribution sector, as the Egalim Law now gives it the possibility of starting proceedings on its own initiative in the case of mergers between large purchasing offices. This new possibility, which will now be extended to all sectors, may prove particularly valuable in the digital sector, given the difficult-to-overturn effects of certain practices on highly evolving markets.

The transposition will also mark an important step in the European harmonisation of penalties and will result in the concept of damage to the economy being taken out of the equation when the penalties imposed by the Autorité are calculated. The applicable regime will therefore be in line with the regime in force at European level.

As regards leniency, the Directive will facilitate a significant step forward, with full harmonisation of NCA leniency programmes for the most serious ‘secret cartel’ infringements. The leniency provisions of the Directive will be in line with the “Model Leniency Programme” adopted by the ECN in 2006.

The transposition also includes provisions on the Autorité’s investigatory powers in relation to access to digital data and the admissibility of evidence.

Supplementary provisions to the Directive enhancing the Autorité’s means of action

The DDADUE Law, which entered into force on 6 December 2020, provides for complementary measures to the ECN+ Directive, aimed at enhancing the effectiveness of the Autorité’s action and enabling it to safeguard the smooth performance of its tasks.

First, the law clarifies the provisions relating to the Autorité’s investigatory powers in the context of dawn raids, in two respects: it mandates the presence of only one judicial police officer per site visited and provides for competence over all the sites visited of the liberty and custody judge who authorised the dawn raid in the first place.

Secondly, it gives the Autorité additional means to reduce the time taken to process cases involving litigation, while still respecting the adversarial principle. The legislative provisions streamline procedures before the Autorité by allowing more frequent use of the simplified procedure, by increasing cases that can be examined by a single member of the Board, and by adjusting the criteria for the allocation of powers between the DGCCRF (Directorate General for Competition Policy, Consumer Affairs and Fraud Control) and the Autorité in the area of micro anticompetitive practices.

Finally, certain provisions are intended to make the Autorité’s exercise of its powers in French overseas territories more flexible, by enabling it to act on market structure (through wider use of structural injunctions). The injunctions will no longer apply solely to retail stores, but now also to wholesale operators. Moreover, the implementation of the injunctions will no longer require the identification of an “impairment of effective competition” but only a “competition concern”. Also in the French overseas territories, the law provides for provisions to stimulate competition in the distribution of products where there is an exclusive import agreement situation. In addition to the existing ban on exclusive import agreements in French overseas territories, it will now be prohibited for a wholesale-importer or wholesaler-retailer or for a group of undertakings in which at least one of the entities performs one of these activities, to apply discriminatory conditions relating to products or services for which there is a de facto exclusive import agreement to an undertaking in which it does not hold any of the capital.

Press release, 20 November 2020