Flooring manufacturers fined €302 million by French competition authority

On 18 October 2017, the French Competition Authority ('FCA') fined three leading manufacturers of floor covering, Forbo, Gerflor and Tarkett, €302 million for operating a cartel that lasted for 23 years.

The cartelists were active in the manufacturing of PVC and linoleum floor covering. They had operated the cartel in conjunction with the relevant trade union (SFEC).

In March 2013, the FCA conducted dawn raids in the floor covering industry which revealed three different practices on the market for PVC and linoleum floor covering.

• Firstly, the FCA discovered that Forbo, Gerflor and Tarkett discussed minimum prices, price increases, sales policy and other sensitive information such as their trading volumes.
• Secondly, the FCA discovered that Forbo, Gerflor and Tarkett had exchanged confidential, recent and detailed information on their sales volumes and commercial forecasts. This information was exchanged through the SFEC, which was in charge of collecting the information and sharing it with manufacturers.
• Thirdly, Forbo, Gerflor, Tarkett and SFEC had agreed not to publish information relating to the environmental performance of the respective manufacturers' products, thus eliminating competition between those manufacturers on this performance parameter.

Throughout the relevant period, Forbo, Gerflor and Tarkett accounted for between 65 and 85 per cent of the relevant market. The FCA justified the size of the fine in light of the proportion of the market impacted by the practices and the seriousness of the infringements. However, the fines would have been even higher had the parties not made use of the settlement procedure and had Forbo and Tarkett not benefited from their respective leniency applications.

The FCA refused to grant an additional reduction in fines as a result of the cartelists' commitments to implement compliance programmes. The FCA considered that this kind of commitment was not relevant to the assessment of fines in cartel cases. This represents a clear change in policy, which will make it harder in the future for cartel participants to maximise the reduction of their fine through cooperation with the FCA.

This fine is the highest imposed by the FCA this year and is higher than the aggregate amount of sanctions imposed by the FCA in 2016.

With thanks to Coline Panhaleux of Ashurst for her contribution.

All articles in the November edition of the Competition newsletter

Balmoral appeal tanks in the CAT

CMA reverses provisional findings in mental health care merger

ECJ dismisses British Airways' air cargo fine appeal

Flooring manufacturers fined €302 million by French competition authority

Image is not everything - but Luxury watchmakers still permitted to operate selective repairer system

Liberty Global / Ziggo merger clearance decision annulled

Marine Harvest's acquisition of Morpol confirmed as 'gun jumping' by General Court

Show's over - CMA accepts commitments to protect fair competition

Wallpaper cartelists hung out to dry as court increases their fine on appeal