Certain anticompetitive practices regularly damage the interests of the State, public services, local and regional public authorities and those of citizens and taxpayers.
The manipulation of public procurement contracts, or practices that have repercussions for the accounts of the French health insurance system, are considered particularly serious as they impact public resources.
The Autorité’s vigorous action, combined with the increasing number of actions for damages that are now flourishing downstream of its decisions, form a dissuasive combination that is growing in strength.
Overturning the normal operation of call for tender procedures by preventing price competition significantly disrupts the sector concerned and seriously undermines public economic order by generating additional costs for local and regional public authorities.
In line with its long-standing role in this field, the Autorité is combating this type of behaviour throughout France, and considers that deceiving a local and regional public authority which is fulfilling its mission in the public interest, is an even more serious matter. In 2022, it sanctioned two cartels of this type, one in the waste collection and management sector in Haute-Savoie and the other in the medical transport sector for Val d’Ariège and Pays d’Olmes hospitals. In both cases, the sanctioned practices contributed to the failure of an effective competitive bidding approach for the provision of public services, with a direct impact on local and regional public authority finances (and ultimately on taxpayers).
Following dawn raids and a report prepared by the local network of the Minister of the Economy sent by the Auvergne-Rhône-Alpes interregional competition investigation brigade, the Autorité handed out fines worth 1.5 million euros to four companies for distorting the call for tender procedures launched by various local and regional public authorities in Haute-Savoie over eight years for the collection and management of their waste. These practices, which involved 13 public procurement contracts worth a total of approximately 6 million euros, misled the contracting authority by submitting fictitiously competing bids. They therefore created an artificial partitioning of the market between the companies and neutralised the tendering process requested by the local authorities concerned, by encouraging price increases. The additional costs they generated weighed heavily on the budgets of these local and regional public authorities
(Decision 22-D-08 of 3 March 2022).
€1,5 M
Following an investigation conducted by the Interregional Competition Investigation Unit in Nouvelle Aquitaine into the sector of medical transport contracts for Val d’Ariège and Pays d’Olmes hospitals, several companies that had participated in a cartel accepted a settlement proposed by the DGCCRF. Only one refused a transaction. The DGCCRF then referred the case to the Autorité, which sanctioned the company. In this case, the companies had formed a consortium to reach an agreement on the prices offered to hospitals. The creation of this consortium made it impossible for hospitals to request alternative proposals and increase competition, even though this is the very purpose of public procurement. This cartel completely foreclosed competition and, for some contracts, raised the prices paid by hospitals compared to the previous period (Decision 22-D-04 of 2 February 2022).
In certain cases, the fight against abuses of a dominant position can also put an end to behaviour that has repercussions on public money.
In this respect, the healthcare sector is the subject of particular vigilance on the part of the Autorité, which has intervened on several occasions to sanction behaviour aimed at hindering the development of generic medicines, context of chronic deficits in the social accounts.
In the Autorité’s view, practices in the healthcare sector, where competition is already reduced by regulations designed to ensure the best possible service for the population while preserving the budgetary equilibrium of the health insurance system, are generally particularly serious. A reduced penetration of generic drugs greatly reduces competition and affects healthcare accounts, since it mechanically slows down price cuts (it is only when generic drugs arrive on the market that the price of the originator product is discounted by the health authorities).
In 2013, for example, the Autorité intervened to sanction a blocking strategy involving Subutex®, a medicinal product prescribed to treat opiate dependency (particularly heroin) in drug-addicted patients. At the time of the analysis, the market represented a significant item of expenditure for health insurance schemes. The lower penetration of generic drugs had had a substantial impact on public accounts, amounting to several million euros a year (Decision 13-D-21 of 18 December 2013).
In the same year, the Autorité sanctioned Sanofi for its strategy of disparaging Plavix® generic drugs, with the aim of limiting their market entry. This pharmaceutical industry blockbuster, used to prevent recurrences of serious cardiovascular disease, was, at the time of the practices, the number one reimbursement item for the French health insurance system (Decision 13-D-11 of 14 May 2013).
The Autorité also intervened to sanction a virtually absolute exclusionary conduct effect on Durogesic® competitors. By making it impossible to market competing generic speciality drugs, this led to a loss of earnings for generic drug laboratories and an additional price to be paid by patients (Decision 17-D-25 of 20 December 2017).
The fines imposed by the Autorité are administrative in nature; they are imposed to sanction behaviours that have created a disturbance to “economic public order”, and are recovered by the Public treasury. However, the damage caused to the economy is not the same as the harm suffered by the victims of these practices. These victims can now bring an action for damages after the Autorité has imposed a penalty.
The Ordinance of 9 March 2017 relating to actions for damages as a result of anticompetitive practices and its implementing decree favour actions for damages by victims of anticompetitive practices, notably by facilitating their access to evidence since they can directly rely on the decisions of the Autorité (or a review court) to establish the existence of the practice1. There has been a sharp increase in actions for damages before the national courts since these texts entered into force.
Among the victims of anticompetitive practices, many local and regional public authorities no longer hesitate to take this route and assert their right to compensation. Following the Autorité de la concurrence’s decision to sanction the “road signage cartel” (Decision 10-D-39 of 22 December 2010), several départements (Loire-Atlantique, Eure, Orne and Manche) decided to obtain compensation for the damage suffered.
For the record, for almost ten years, the sanctioned cartel had distorted virtually all public procurement contracts for road signage nationwide, to the detriment of the local and regional public authorities in charge of road and motorway management. They were awarded damages for the harm caused by this cartel, 41.1 million euros, 1 million euros and more than 2.2 million euros respectively for each of the last two départements2. At the time, the President of the Conseil Départemental de l’Eure, Pascal Lehongre, stated that “These agreements between signage companies distorted competition and were clearly concluded to the detriment of local and regional public authorities and therefore taxpayers. It was logical to seek and obtain compensation for this loss”3.
In addition, new forms of cooperation between the courts and the Autorité de la concurrence are gradually being introduced, particularly in the damage assessment phase. The provisions of the French Code of Administrative Justice (Code de justice administrative) relating to compensation litigation now stipulate that the Chairperson of the panel of judges may request the opinion of the Autorité de la concurrence on the assessment of the loss for which compensation is sought. The Autorité then has two months to submit its observations to the judge. Following the school bus transport case in Bas-Rhin, the Court of Strasbourg referred to the Autorité for an opinion. In 2021, following its observations, the judges ordered several of the companies involved in the cartel to pay the European Collectivity of Alsace €2 million euros4. The Autorité welcomes this constructive cooperation with the courts, which enables it to contribute to the process of helping victims obtain fair compensation for their losses.
In the healthcare sector, the French healthcare administration (Caisse Nationale d’Assurance Maladie, CNAM) brought an action for damages against practices that generated higher costs for the health insurance system. Following the Autorité’s decision to sanction Sanofi for hindering the market entry of the generic drugs of Plavix®, the CNAM brought an action for damages before the Paris Commercial Court (Tribunal de commerce de Paris), seeking compensation for the loss suffered as a result of the reduced penetration of generic drugs (estimated at 116 million euros by the plaintiff). Although the Court of First Instance dismissed CNAM’s action on the grounds that it was time-barred, Paris Court of Appeal overturned this judgment in February 2022 and ordered an expert appraisal of the damage suffered by CNAM5.
A number of public purchasers have launched another major action for damages in the wake of the Autorité’s decision to sanction a linoleum cartel.
For the record, in 2017 the Autorité dismantled the cartel of the three main resilient flooring manufacturers in France, namely Gerflor, Forbo and Tarkett. By 2022, more than 300 health and medical-social establishments (hospitals, care facilities for elderly people) filed an action for damages, claiming nearly 500 million euros. Crépy-en-Valois hospital, for example, estimated its total loss at 1.17 million euros. According to Dominique Browne, its Technical Services Manager, “This represents almost six years of investment for us. Six years of ongoing investment in repairs, vehicles, hospital equipment, beds, etc. This is extremely significant.”6
1 / Decisions taken by the Autorité de la concurrence to sanction anticompetitive practices that have not been the subject of an appeal or a decision by the appeal court constitute irrefutable presumptions.
2 / TA Caen, 6 April 2017; CAA Nantes, 16 March 2018; CAA Nantes, 27 April 2018; CAA Nantes, 5 March 2020: TA Rouen, February 2017.
3 / Normandinamik, CCI economic network, 18 July 2018.
4 / TA Strasbourg, 7 April 2021.
5 / CA Paris, 9 February 2022.
6 / L’oeil du 20h, JT France 2, 24 November 2022.
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