A modernised European competition regulation

To confront the new challenges of market regulation in Europe, competition law and policy are being modernised, adapted and harmonised for even more efficient and faster application. In France, these developments resulted in 2021 in the transposition of the ECN+ Directive, which enhances the powers and tools of the Autorité, the revision of the procedural notice on fines, which is a further important step towards the convergence of the rules applicable to fines within the Internal Market, and the adoption of the Digital Markets Act, which will ensure comprehensive regulation of the major players in the digital sector. Not to mention the cooperation mechanisms that are continually being strengthened between authorities and are leading to greater convergence.

Transposition of the ECN+ directive, significant progress and enhanced powers

Directive (EU) 2019/1 of 11 December 2018 to empower the competition authorities of the Member States to be more effective enforcers and to ensure the proper functioning of the internal market, the ECN+ directive, was transposed into domestic law with Ordinance 2021-649 of 26 May 2021.

This text strengthens and extends the powers of the Autorité and the other national competition authorities of the European Union, for the benefit of the consistent application of European competition law. The Autorité’s prerogatives, which were already largely aligned with the high standard established by the ECN+ Directive, have nevertheless advanced significantly.

  • The Autorité will now have the option to set its own priorities and reject complaints that do not correspond to these priorities. This “discretionary jurisdiction” power will allow it to better allocate its resources, which can be fully devoted to the rapid resolution of the most important cases.
  • The Autorité will now have the possibility of starting proceedings ex officio to impose interim measures, no longer simply following a request made by a company, incidentally to an application on the merits. The Autorité will therefore be able to intervene without delay, on its own initiative, when it identifies any conduct that could harm competition, in particular in sectors where market conditions are rapidly evolving.
  • The possibility for the Autorité to issue structural injunctions (e.g. the divestiture of a subsidiary or business) in the context of litigation, is fully established, thereby aligning its powers with those of the European Commission.
  • The directive harmonises the leniency procedure at the European level. This procedure, whereby a company which discloses a serious infringement of the competition rules to the Autorité may apply for an exemption from the financial penalty incurred, is now fully enshrined in national positive law and largely takes over the terms of the leniency programme implemented so far by the Autorité in a soft law framework. Another important advance: the incentive for companies to expose possible secret cartels is further strengthened by the fact that immunity from criminal penalties (or a reduced fine) may also be obtained, under conditions, by natural persons belonging to the staff of the company which first submitted a leniency application.
  • The possibility for the Autorité to access the data of companies which are the subject of an investigation, regardless of where the data is stored, and to access the encryption keys, is fully established, in order to safeguard the effectiveness of investigations, in the face of new methods of data protection and the latest storage methods for computer data. In addition, the new provisions subject the Autorité’s proceedings to the “freedom of evidence” standard, applicable in criminal matters, which will broaden the scope of admissible evidence.
  • The system of financial penalties is now more of a deterrent and better harmonised at European level. Organisations – now “associations of undertakings” – are no longer subject to a specific penalty regime for infringement of the competition rules (they previously benefited from a fine ceiling of €3 million), but are now subject to a much higher ceiling, equal to 10% of the total turnover of the companies belonging to the association. This will apply in particular to professional trade associations and professional bodies.
  • The criteria for determining the amount of the fines will now be unified and aligned with those used by the European Commission, based solely on the traditional notions of the seriousness and duration of the infringement, with the reference previously made in the law to the notion of “harm to the economy” being removed.
  • Finally, European cooperation between national competition authorities has been strengthened (mutual information obligations between the authorities of the European Competition Network, extension of assistance between authorities, in particular for inspections, notification of procedural documents and recovery of fines) (Ordinance 2021-649 of 26 May 2021).

Revision of the procedural notice on fines, modernisation and harmonisation

On 30 July 2021, the Autorité issued a new procedural notice on fines, which repeals and replaces the previous notice of 16 May 2011. The principle of publishing the methodology for calculating financial penalties is part of a transparency approach designed to meet the needs of companies for legal certainty and predictability. The new procedural notice is therefore an important further step towards the convergence of competition rules and will promote a consistent application of penalties within the internal market.

This update, which follows up on a public consultation, first draws, the consequences of the new applicable statutory provisions resulting from Ordinance No. 2021-649 of 26 May 2021 transposing the ECN+ Directive. Moreover, the Autorité has made a number of additional adjustments based on its work over the past ten years, the case law of the review courts and the practice of the European Commission.

Among the key developments in the new procedural notice are:

  • the reference to the notion of harm to the economy has been eliminated;
  • the ceiling of fines, €3 million, has been eliminated for associations of undertakings and the fining regime of up to 10% of turnover has been aligned;
  • details on the method for calculating the basic amount of the fine have been added, also for the cases justifying an adaptation of this method, in particular in the presence of two-sided or multi-sided markets, which are crucial in the digital economy;
  • the indicative list of factors that the Autorité may take into account in assessing the seriousness of practices has been updated, and now explicitly includes innovation and the environment among the parameters of competition affected by the infringement;
  • the possibility of adding to the basic amount an additional amount of between 15% and 25% of the value of sales for the most serious practices of horizontal agreements and abuses of dominant positions;
  • taking into account the duration of the infringement as a parameter in its own right for calculating fines, by aligning the coefficient for taking into account the duration with that provided for in the European Commission’s guidelines and, when the infringement period is less than one year, by calculating the duration on a pro rata temporis basis of the undertaking’s participation in the infringement;
  • taking into account new mitigating circumstances as criteria for individualising the fine, in particular when the undertaking has implemented compensation measures during the course of the proceedings that specifically benefit the victims of the practice;
  • the possibility of increasing the fine where it is clear from the evidence at the Autorité’s disposal that the estimated illicit gains made by the undertaking concerned as a result of the infringement in question exceed the amount of the financial penalty which the Autorité could impose;
  • taking into account, in the assessment of repetition, of fines imposed by other EU competition authorities and by the European courts.

The digital markets act, the complementary tool to competition policy

The Digital Markets Act (DMA) aims to combat certain practices implemented by major digital platforms that are deemed harmful to two guiding principles: contestability and fairness of markets.

This new legislation will represent a structuring pillar in the regulation of digital platforms in Europe. It will benefit user companies that depend on these platforms to offer their services in the single market, who will benefit from a fairer business environment; innovators and technology start-ups, who will have new opportunities to compete and innovate in the online platform environment; and finally consumers, who will benefit from a wider choice of services of better quality, more opportunities to switch providers if they wish, direct access to services and fairer prices.

The DMA was drafted on the principle of self-enforcing regulation: once the digital platforms covered by this text have been designated by the Commission on the basis of objective qualitative and quantitative criteria as ‘gatekeepers’, they will be subject to rules that are precisely laid down in the text, in advance, without the need for the Commission to demonstrate the existence of a dominant position, abuse, or to define a market. These obligations and prohibitions were, for the most part, enacted by analysing anticompetitive practices that had been fined in the past by various competition authorities in Europe, as well as on the basis of various studies and sector-specific inquiries, and cover many components:

  • access to data and data mining;
  • the opening of mobile ecosystems and the free choice of end users;
  • interoperability;
  • targeted advertising;
  • bundled offers ;
  • transparency obligations.

International convergence

In addition to a strong presence in European and international fora (ECN, ICN, OECD, UNCTAD), the Autorité also participates in the work of the G7 competition authorities (Canada, France, Germany, Italy, Japan, United Kingdom, United States).
The adoption of a common understanding “on competition in the digital economy”, under the French presidency and signed in Chantilly in 2019, was a first step in building a common and ambitious vision around digital issues.

The initiative has been set out for the long term, with the competition component of the G7 cooperation being continued in 2021 under the UK’s G7 presidency, resulting in the creation of the “Compendium of approaches to improving competition in digital markets”. This document identifies and compiles the decision-making and advisory practice in the digital economy of the competition authorities of the G7 countries, the European Commission’s Directorate General for Competition and the competition authorities of four guest countries (Australia, India, South Africa and South Korea).

The collection of experiences of each is structured around four areas:

  1. The responses of competition authorities to competition concerns raised by digital markets (decisions, opinions, sector enquiries or technical studies).
  2. The professionalisation of the competition authorities’ services with the creation of specialised teams on digital issues.
  3. The development of legislative reform proposals at national or European level.
  4. The importance of cooperation at national level between regulators or international level between competition authorities (Press release of 29 November 2021).

For example, gatekeepers will have to allow user companies to access data generated by their activities on their platform, or allow user companies to promote their offerings and enter into contracts with their customers outside their platform. They will, however, be prohibited from preventing consumers from accessing the services of companies outside their platforms, or from giving the services and products they offer a more favourable treatment in terms of ranking than comparable services and products offered by third parties on their platform.

Regarding the acquisitions component, the DMA imposes an obligation on gatekeepers to notify any proposed acquisition in which the target assets provide services in the digital sector or any other economic sector that makes it possible to collect digital data. This information will be communicated by the Commission to the competent national authorities, which will be able to use it for merger control purposes, relying on the referral possibilities provided for in Article 22 of Regulation 139/2004.

The DMA will therefore constitute a powerful complementary tool to competition law and will effectively reinforce the fight against some of the most harmful practices implemented by very important gatekeepers.

The Autorité has been strongly committed to an ambitious and effective DMA, being involved in the negotiations from the outset, in order to promote an active role for national competition authorities in implementing the text, with the aim of ensuring optimal coordination between competition law and the DMA, to ensure that the DMA is as effective as possible. This involvement was demonstrated, firstly, by the Autorité’s participation in interministerial discussions aimed at determining the position of the French authorities at the Council of Ministers, and secondly, by discussions with its European counterparts, which resulted in the publication of a joint document by the ECN members. The Autorité also participated, under the aegis of the Permanent Representation of France to the EU, in the negotiations conducted by the Council of the European Union in the context of the French Presidency of the European Union, and was called upon in particular to provide technical expertise on issues of particular relevance to its expertise.

The Council and the Parliament reached a provisional political agreement on the draft regulation on 24 March 2021. The centre of gravity of this text will be European: the European Commission will have sole competence in implementing the powers provided for in the DMA (including the power to designate gatekeepers, update the list of obligations, conduct market investigations, impose fines, including fines up to the limit of 10% of the total worldwide turnover generated during the previous financial year, or 20% in cases of reoffending, etc.).

The national authorities responsible for enforcing the competition rules will nevertheless have to work in close coordination with the European Commission in order to support the latter in implementing the text and ensure that the DMA is smoothly coordinated with competition law.

The DMA therefore provides for the possibility for Member States to empower the national authorities responsible for enforcing the competition rules to conduct investigations into possible breaches of the obligations under the DMA and to transmit their findings to the Commission.

Cooperation and exchange of information between national competition authorities and the Commission will take place in particular through the European Competition Network (ECN), which has proven to be an extremely effective vehicle for cooperation and coordination over the last 20 years.

The complementarity between competition law and the DMA, which was a source of inspiration for drafting the text, will also constitute a guiding principle for the future. Competition law will remain at the forefront of ensuring open and fair digital markets, but it will also help make the DMA adaptable, for example by identifying new abusive practices that will make it possible, where appropriate, to update obligations listed in the DMA.

The DMA will be implemented within six months of its entry into force.

Managing cookies

A cookie is a file which does not allow the identification of the user of the Site, but which records information relating to the navigation of a computer on a site. The data thus obtained are intended to facilitate navigation on the site and are also intended to allow various measures of attendance.