Paris Court of Appeal preserves presumption of innocence, but upholds fines imposed on chemical distributor Brenntag

On 3 December 2020, the Paris Court of Appeal ("Court") confirmed the fines imposed by the French Competition Authority ("FCA") in 2013 on the German chemical distributor Brenntag, and its former parent company Deutsche Bahn, of EUR 47 million and EUR 5.2 million respectively for participating in an anti-competitive agreement relating to the distribution of chemical commodities in France.  However, it modified its case-law in a way that will limit the FCA's ability in "hybrid" settlement cases to use facts not contested by settling parties against non-settling parties.

In 2013, the FCA fined several chemical distributors for participating in a single, complex and continuous anti-competitive agreement with a view to stabilising their market shares and increasing their margins through customer allocation and tariff coordination.  The FCA's decision, which originated from a leniency application filed in 2006, was followed by lengthy legal proceedings during which Brenntag challenged in particular the FCA's use of its investigative powers and the regularity of the documents brought by the whistle-blower, Solvadis, which contained defamatory statements about Brenntag's lawyer.

However, the significance of the Court's decision of 3 December 2020 is found in its departure from the so-called "Manpower" case law, a ruling of the French Supreme Court dated 29 March 2011, which had been applied by the FCA for approximately 10 years. According to Manpower, in cases where some undertakings decide not to contest the FCA's statement of objections in order to reach a settlement agreement, whilst other undertakings contest the statement of objections, the FCA is only required to demonstrate with respect to the latter undertakings that they participated in the infringement in question (i.e. the FCA does not have to demonstrate facts relating to the infringement that can be considered as established through the settlement procedure).

The FCA argued before the Court that – in accordance with the Manpower case law –  the classification of the infringement as a single, complex and continuous cartel could not be contested by Brenntag.  However, the Court's decision confirms that the presumption of innocence is a general principle of EU law, which precludes the FCA from adopting an approach that would deny the undertaking concerned the opportunity to exercise its rights of defence outside of the settlement procedure.

Despite the Court's important clarification on the application of the Manpower case law, the examination of the substantive merits of the FCA's decision led the Court to conclude that, first, the factual findings were sufficient to establish the existence of a single, complex and continuous infringement and, second, Brenntag in fact did participate in such an infringement.

The FCA is likely to appeal this decision before the French Supreme Court given the implications of the Court's judgment to future cases.  However, the Supreme Court may be persuaded by the inferior court's ruling and adopt a decision that serves to protect the rights of defence of parties under investigation in future cases.

With thanks to Adèle Azzi of Ashurst for her contribution.