On 28 October 2019, the French Competition Authority ("FCA") fined a group of road transport companies for having organised customer allocation practices among its members. Astre did not challenge the FCA's objections and applied for settlement.
| what you need to know - key takeaways |
- On 27 December 2018, the FCA published its procedural notice providing guidance on the application of the settlement procedure ("Notice") (see our previous newsletter article for more details).
- French settlement procedure has a wider scope than the European Commission process. For example, it also allows undertakings to negotiate the fine – not just a reduction – with the investigation services.
- However, there are specific conditions that need to be met before settlement can be agreed.
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In October 2017, following an investigation report from the Directorate General for Competition Policy, Consumer Affairs and Fraud Control (DGCCRF), the FCA decided to start ex officio proceedings regarding practices implemented in the road freight transport sector. Two years later, on 28 October 2019, it imposed on Astre, an association of small and medium-sized road hauliers, a €3.8 million fine for having implemented, for more than 20 years, a system of customer allocation by means of a non-compete clause introduced into several of its internal documents (namely its rules of procedure, bylaws and accession convention), as well as monitoring and sanction mechanisms. According to the non-compete clause, Astre's members undertook not to solicit referenced customers of other members nor to answer these clients' requests.
The FCA found that such practices had the object of preventing competition in the market in particular by restricting the commercial autonomy of Astre's members and reducing alternatives available to customers.
Astre did not challenge the FCA's objections and applied for settlement.
The case raises a few particularly interesting points related to the FCA settlement procedure:
- first, the FCA indicated that an undertaking applying for settlement must provide sufficient guarantees related to compliance with competition law, particularly by fixing a time-limit for the termination of anticompetitive practices identified by the FCA.
- second, the FCA specified that by signing the settlement arrangement, which includes a range of the fines incurred, an undertaking cannot afterwards challenge the level of the fine on the basis that it is unable to pay it, unless it is able to demonstrate that its financial position has deteriorated since the settlement arrangement.
With thanks to Marie Florent of Ashurst for her contribution.
